Company Formation in Saudi Arabia, Foreign Company Registration in Saudi Arabia
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Company Formation in Saudi Arabia

HOW IMC CAN HELP YOU REGISTER A BUSINESS IN SAUDI ARABIA?

IMC has the experience and expertise to advice customers on the suitable company type taking in to account the laws of the land and the unique customer’s needs. We have the experience having handled different industries and geographies across the world. We understand finance and the legal framework required to handle a company’s operations. We will advise on the percentage of shareholding allowed for foreigners, and the rights which go with that percentage and other such business matters. IMC has been operating in GCC for over 10 years. With a partnership in Saudi Arabia, IMC is closer to the customer with a better understanding of the Saudi ArabiaCompanyLaws and Practices.

LICENSING FOR SAUDI ARABIA COMPANY FORMATION

The Saudi Arabian General Investment Authority (SAGIA) is the foreign investment company registration license provider for the Kingdom.

FOREIGN INVESTMENT DURING SAUDI ARABIA COMPANY FORMATION

100% foreign investment allowed in service sector. However, trading and retail activities is reserved for Saudi National and Saudi owned entity only.

MINIMUM PAID UP CAPITAL – LLC

* SAGIA may prescribe additional requirements

  • Services: NA but recommended to maintain $0.13m
  • Industrial: SAR 1m ($0.27m)
  • Trading: SAR 20m ($5.33m)
  • Agriculture: SAR 25m ($6.67m)
  • Real estate: SAR 30m ($8m)

CORPORATE TAX ON SAUDI ARABIA COMPANY FORMATION

Service Company taxed @20%

Saudi Owned Local companies taxed @2%\ 

ACCOUNTING AND TAX

There is no personal income tax on income earned by individual and employees. However, there are three type of taxes levied on the Companies based on the shareholding structures:

  • (i) Corporate Tax: on all registered entities including companies or branch having foreign ownership.
  • (ii) Withholding tax : on entities making payment to non-residents, such as for rent, loyalties and management fees
  • (iii) Zakat (Islamic wealth tax): Zakat, a religious levy, is charged on the company’s Zakatbase at 2%. Saudi citizen investors (and citizens of the GCC countries, who are considered to be Saudi citizens for Saudi tax purposes) are liable for Zakat. 

Where a company is owned by both Saudi and non-Saudi interests, the portion of taxable income attributable to the non-Saudi interest is subject to Corporate tax, and the Saudi share goes into the basis on which Zakat is assessed.

 

Corporate Tax Rate for unlisted Company is 20%

 

Basis for Corporate Taxation:

  • Tax is on the net adjusted profits
  • The share of profits attributable to interests owned by non-Saudi / non-GCC nationals is subject to income tax.
  • The share of profits attributable to interests owned by Saudi / GCC nationals is subject to Zakat (religious levy).

 

Withholding tax rates

  • Rent ………………..……………………………………………… 5%
  • Royalty or proceeds …………………………………….…….. 15%
  • Management fees …………………………………………..…… 20%
  • Payments for airline tickets, air or maritime freight .………….. 5%
  • Payments for international telecommunications services …… 5%
Type Limited Liability Company (WLL)
Under Saudi Law, Foreigners Can own 100% (in certain activities) subject of FSI approval and manufacturing / trading requires local national participation
Share Capital SR 500,000
Director Minimum One
Shareholders Minimum Two
Memorandum & Article of Association Yes
Can the Entity hire Expatriate in Saudi Yes
Saudi Resident Secretary Required Yes
Statutory Audit Required Yes
How Long to open corporate Bank Account 4 Days
Timeframe for Incorporation 6 Months
Annual Return Must be Filed
Annual Tax Must be filed
Access to Saudi Double Tax Treaties Yes

Company Incorporation

Having decided on the type and structure, we can assist in every step of the way starting from drafting the incorporation documents, listing out the documents required to be filed, documents to be notarized and other formalities. We can advise on the licenses required for specific industries. If a local attorney or a CPA need to be hired, we will handle this. We will coordinate filing the applications, getting the name approved and all the steps required. We can also assist in opening the bank account for the company.

Links to company set up in Saudi Arabia

Doing business in Saudi Arabia download our eBook

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