In this article and in a successive series of following articles, we will present everything related to establishing companies and investing in the Kingdom of Saudi Arabia. In this article, we will specifically address the answer to the most prominent questions related to establishing companies in the Kingdom of Saudi Arabia for non-Saudis (foreigners).
Q1: What are the conditions for establishing foreign companies in Saudi Arabia?
A1: The following requirements are required for foreigners to establish a company in Saudi Arabia:
1. The investment activity for which a license is required must not be included in the list of activities excluded from foreign investment.
2. The technical specifications of the product and its production method must be in accordance with Saudi, Gulf, or international specifications.
3. The foreign investor requesting a license must not have had final rulings or decisions issued against him due to fundamental violations.
4. The foreign investor requesting a license must not have had previous judgments issued against him, including judgments for financial or commercial violations, whether inside or outside the Kingdom.
5. That the foreign investor requesting a license must adhere to the conditions, controls, declarations and undertakings attached to the investment license application form.
6. That granting a foreign investment license achieves the investment objectives and the objectives of the Ministry of Investment in Saudi Arabia.
Q2: What are the documents required to open a company in Saudi Arabia for foreigners?
The license application form must be filled out electronically through the Ministry of Investment website, with the following documents required to be completed in Arabic or translated into Arabic from an accredited office in the Kingdom:
1. A copy of the commercial register and articles of association of the establishment in its country, certified by the competent authorities and the Saudi embassy.
2. A copy of the trade name reservation from the Ministry of Commerce and Industry.
3. Articles of incorporation if the company is a limited liability company.
4. The company’s articles of incorporation and articles of association if it is a joint stock company.
5. The partners’ decision of their desire to invest in Saudi Arabia, indicating the number of partners, their names, the value of the capital, the ownership percentage of each partner, the main location of the facility, the nature of the activity, the appointment of the general manager and the definition of his powers, certified by the competent authorities in the foreign country and the Saudi embassy.
6. A copy of the passport of the General Director.
7. A copy of the national identity and family registry if one of the partners has Saudi Arabian citizenship, and a copy of the commercial registry to prove the profession or an extract from the civil status certificate.
8. Providing initial approval from the relevant ministries or bodies in the Kingdom if the activity requires the approval of a specific entity.
9. Submitting a detailed work plan that accurately shows the project’s ability to achieve investment objectives, including its contribution to increasing the Kingdom’s income, the jobs it will provide for citizens, how the project contributes to enhancing competition, improving services, diversifying the options for consumers, the strategic dimensions of the project on investment in the Kingdom, and the benefit it will bring. It will refer to the city that will be the center of the project and its affiliated region, and the employment and training plan includes estimating the number of employees and the percentage of Saudis among them in each department and administrative level, employee training and qualification programs, the number of branches planned to be opened, and an estimate of the costs of starting the activity and the necessary financing.
10. Submitting a budget for the facility requesting a license from outside the Kingdom for a period of no less than three years that shows the soundness of the facility’s financial position, approved by an accounting office and certified by the agency concerned with commercial activities and taxes in its country, and by the Saudi embassy.
11. Proving the financial ability to invest in proportion to the project capital and the share of each partner, and in proportion to the business plan submitted for the project.
12. The request to register a branch of a foreign company must include the start and end dates of the branch’s fiscal year.
Q3: What is the cost of establishing a company in the Kingdom of Saudi Arabia for foreigners?
A3: The cost of establishing a company in Saudi Arabia varies according to the form of the company, its commercial activity, and the amount of capital in it. The cost of establishing the company includes the application fees for establishing the company, fees for registering the trade name and trademark, and the commercial licenses required to start the project, etc. These fees vary according to the commercial activities. Therefore, there is no fixed cost for establishing companies in Saudi Arabia.