The good news is that the time taken for processing a business license in Saudi Arabia is cut down by almost 92 percent in an effort to boost new investments in the Kingdom. In additions, earlier companies had to submit around eight documents to get a license issued, but now they only have to give their financial statements and a certified commercial registration. As per a report, SAGIA would be now licensing projects falling under the new Foreign Investment Act, allowing even 100 percent foreign ownership in some sectors.
But if you are thinking of foreign company registration in Saudi Arabia, there are following three concerns you should take care of:
- Be ready with decent data about the economy of the region. Conduct an in-depth analysis especially in the sector you are aiming to work in. Study the market conditions, competitors and then establish a viable business setup with a proper forecast. Then decide if you will invest on your own or through a bank.
- As per the law, you must have an area partner where the UN agency is holding the bulk interest and also might take the management of the business in their hands. The native partner (company or private) does not contribute to the investment in the start-up. The native partner’s demands are under review in some states currently to promote foreign investments.
- After registering your business, you have to explain to the Ministry of Commerce that you possess considerable cash to start your venture. You have to specify add varies between the states (it’s typically between $10,000 or £6,500 and about $50,000 or £33,500) which is taken as a guarantee for liabilities; however, you can take out cash soon.
As this process can be financially risky, having native data is imperative. We recommend you to consult some experienced professional who could guide you regarding the registration process and save you from several possible risks. Exports and manufacturing sector square measure are especially supported in a big way by the government with regards to the acquiring of land to construct their manufacturing unit. If you set up your business in a trade zone, then it is also offered exemptions from prevalent import and export duties, building/property license fee, industrial and property tax and other restrictions applicable on transferring capital that is invested in the zone.
An option to setting up a new business in Saudi Arabia is to rather shop for a going concern, as that would be quite simpler because in that case, you don’t need to lodge your capital; all you need to do is to agree to a value and then transfer your business’ possession.
Local Chambers of Commerce would suggest you about start-ups and also for square measure as they are proficient at hand-picking sure-shot profitable new entrepreneurs to the region. Contact details for square measure are:
- Council of Saudi Chambers of Commerce and business, KSA – (PO Box 16683, Riyadh 11474)
- Eastern Province Chamber of Commerce, KSA – (PO Box 719, Dammam 31421)
- Federation of GCC Chambers, KSA – (PO Box 2198, Dammam 3145)
- Jeddah Chamber of Commerce and business, KSA – (PO Box 1264, port 21431)
- Riyadh Chamber of Commerce and business, KSA – (PO Box 596, Riyadh 11421)
Arabs are quite skilled at negotiations so we recommend you to be confident about the content of your written agreement. If square measure gaps exist, they could spot it, which can cause you problems. Mostly, the Arabs never say a ‘no’ to a business proposition on the spot; so you must listen carefully and observe well. In case their response is ‘Leave it with me’ or ‘I’ll suppose it’, then there is a chance that the venture’s chances are dim. The probable profits of setting up your own business in Saudi Arabia square measure are good; however, the truth remains that it isn’t meant for you if you are faint-hearted.
Registering a Company and Legal Liabilities
Saudi Arabia’s Company Law can be compared to any in western states. In this, the enterprises are usually operated as Nonpublic Chamber of Commerce, limited liability operations, or several sorts of concern. It is advised to take a native legal advice and steerage for registration process and formalities. If you are a foreigner, you could use a western country or Arab venture business company. After selecting, you need to get the advice of the Arab-British Chamber of Commerce, Geographical Region Association, the DTI, and your particular Embassy’s industrial department.
Western expatriates usually tend to take up senior positions getting top salaries and perks. But workforce from the India or some other countries at times takes up unskilled or semi-skilled and menial jobs and the square measure is paid accordingly. An influential sponsor or business leader could be a wise option to use with administration. The authorities are not hard unless they have a strong reason. You stand a bigger chance in the region if you stay polite and patient.
If you are looking for some professional support in starting your business or accounting services in Saudi Arabia, do contact us, and we will be glad to assist you.
