Saudi Arabia company registration

DOING BUSINESS IN SAUDI ARABIA IN 2017

We are Since 2003,  PLC has been efficiently and effectively assisting our Clients with i) Saudi Arabia business registration ii) business licensing iii) Saudi Arabia business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions. 

Summary	100% SAGIA LLC	51% LLC	National LLC	Fast business setup solution	Commercial Agency Agreement
Also known as	دة مسؤولية ذات ش	دة مسؤولية ذات ش	N/A	N/A	تفاقية وكالة
Best use of company?	All products and services	All products and services	All products and services	Close a customer deal now	Manufacturing and export trading
How soon can you invoice Clients/sign sales contracts?	9 months	9 months	2 months	2 months	2 months
How soon can you hire staff?	9 months	9 months	2 months	2 months	2 months
How soon can you sign a lease agreement?	2 months	2 months	1 month	1 month	2 months
How long to supply company registration / tax numbers?	9 months	9 months	2 months	2 months	2 months
How long to supply corporate bank account numbers?	10 months	10 months	3 months	2 months	3 months
Corporate tax rate on annual net profits?	20%	20%	0%	20%	0%
Limited liability entity?	Yes	Yes	Yes	Yes	No

See full table

Government grants available?	Yes	Yes	Yes	Yes	Yes
Government approval required for foreign owners?	Yes	Yes	N/A	Yes	N/A
Resident director/partner/manager/ legal representative required?	No	Yes	Yes	Yes	Yes
Minimum paid up share capital?	At SAGIA's discretion	At SAGIA's discretion	US$50,000	minimum US$50,000	none
Can bid for Government contracts?	Yes	Yes	Yes	Yes	No
Corporate bank account location?	Emirates NDB	BNP Paribas	Alimna Bank	SAAB	Deutsche Bank
Can secure trade finance?	Yes	Yes	Yes	Yes	Yes
VAT payable on sales to local customers?	None	None	None	None	None
Average total business set up engagement costs?	US$75,190	US$75,190	US$56,540	US$128,453	US$16,200
Average total engagement period?	10 months	10 months	3 months	12 months	3 months
Accounting and tax considerations	100% SAGIA LLC	51% LLC	National LLC	Fast business setup solution	Commercial Agency Agreement
Statutory corporate tax payable?	20%	20%	0%	20%	0%
Annual Zakat rate payable by GCC residents only?	0%	2.5%	2.5%	2.5%	2.5%
Legally tax exempt if properly structured?	No	No	No	No	No
Group HQ tax incentives?	No	Yes, if KSA/GCC owned	Yes	Yes, if KSA/GCC owned	Yes
Must file an annual tax return?	Yes	Yes	Yes	Yes	Yes
Must file annual financial statements?	Yes	Yes	Yes	Yes	Yes
Must appoint an auditor?	No	No	No	No	No
Access to double taxation treaties?	Yes	Yes	Yes	Yes	No
Withholding tax on payments to foreign shareholders?	5%	5%	0%	5%	0%
Company registration	100% SAGIA LLC	51% LLC	National LLC	Fast business setup solution	Commercial Agency Agreement
Resident director/partner/manager/ legal representative required?	No	Yes	Yes	Yes	Yes
Minimum number of shareholders/partners?	2	2	1	1	1
Maximum shareholding for foreigners?	100%	49%	0%	At SAGIA's discretion	0%
Can be wholly foreign owned?	Yes	No	No	Yes	No
Sponsorship by a local citizen required?	No	Yes	Yes	No	Yes
Minimum statutory paid up share capital?	At SAGIA's discretion	At SAGIA's discretion	US$50,000	minimum US$50,000	none
Security deposit to be kept with Government?	No	No	No	No	No
Shelf companies available?	Yes	Yes	Yes	Yes	Yes
Time to incorporate a new entity?	9 months	9 months	2 months	2 months	2 months
Can easily convert to a PLC?	Yes	Yes	Yes	Yes	Yes
Public register of shareholders and directors?	Yes	Yes	Yes	Yes	Yes
Can have preference shareholders?	Yes	Yes	Yes	Yes	Yes
Business considerations	100% SAGIA LLC	51% LLC	National LLC	Fast business setup solution	Commercial Agency Agreement
Good entity for trademark registration?	Yes	Yes	Yes	Yes	No
Can secure an import and export license?	Yes	Yes	Yes	Yes	Yes

Our Client needs to travel to Saudi Arabia for business set up?	No
Temporary physical office solutions available?	Yes
You need a local resident as bank signatory?	Yes
The entity will likely be regulated by?	SAGIA and Ministry of Commerce and Investment
Minimum number of directors/managers?	1
Monthly VAT reporting to the Government?	No
Must sign an office lease agreement during incorporation?	Yes
Shareholders & directors documents to be attested/translated?	Yes
Each foreign director needs a personal income tax number?	No
Foreign director needs a residence visa?	No
Foreign bank signatories need a residence visa?	Yes
Maximum number of staff allowed?	No maximum number for any entity
Expatriate to local staff ratio?	2 - 1
Can secure residence visa for business owner?	Yes
Other useful information
What will be included in my customer sales invoice?	Click link
This country has signed free trade agreements?	Yes
This country is a member of WIPO/TRIPS?	Yes
This country is a member of the ICSID?	Yes
Average custom duties suffered?	5%
Government foreign investment approval required?	Yes
Average monthly office rental? (US$ per sq m)	35
Minimum statutory monthly US$ salary?	800
Average monthly US$ salary for local skilled employees?	1,580
US$ deposit interest rate? (1 year average)	2.89%
Overseas remittance currency controls?	None
Banking considerations
Multi-currency bank accounts available?	Yes
Corporate visa debit cards available?	Yes
Quality of e-banking platform?	Satisfactory
Crowd funding available in this country?	Yes

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Advantages and disadvantages

• Best uses for a Saudi Arabia company

• Business entities in Saudi Arabia

The Saudi company law recognizes four types of business entities: the limited liability company, the joint stock company (corporation), the partnership and the branch of a foreign company. To be shareholders, foreigners must however obtain a foreign capital investment license from the Saudi Arabian General Investment Authority (SAGIA), which in practice is seldom granted by this licensing authority. Consequently, we recommend our Clients to action the following alternatives: i) register a branch of a company incorporated in one of the countries members of the Gulf Cooperation Council, which are exempt from licensing requirements or ii) sign an agency agreement with a local partner.

The Saudi Arabia limited liability company - LLC (شركة ذات مسؤولية محدودة)

• The Saudi Arabia agency agreement company - (اتفاقية وكالة)

• The Saudi Arabia joint stock company - JSC (شركة)

• The Saudi Arabia limited partnership (شراكة محدودة)

• The Saudi Arabia GCC branch company (فرع لشركة أجنبية)

• Table of comparison between Saudi Arabia entities

Fees and timelines:

Fees

Saudi Arabia company incorporation costs in Year 1 amount to US$28,750 and annual company costs in Year 2 and thereafter amount to US$7,420. The average fee per Saudi Arabia company formation engagement is outlined in the table below. These fees include Saudi Arabia company incorporation, opening corporate bank accounts, and all government fees:

Different Saudi Arabia entity types	Cost	Draft invoice
SAGIA LLC	US$75,190
National LLC	US$56,540
Fast nominee solution	US$128,453
Agency agreement	US$16,200
Saudi Arabia free zone	US$87,627
Branch of a foreign company	US$54,380
Joint stock company	US$54,380
Limited partnership	US$54,380
Technical and Scientific Services Office (TSSO)	US$52,180
Temporary Commercial Registration (TCR)	US$49,280
Fast business setup solution + 6 months tax reporting	US$145,253
Saudi Arabia SAGIA LLC without travel	US$91,990

Other fee considerations

Timelines

The average Saudi Arabia company incorporation engagement period is 20 weeks as outlined below:

• Preparing a detailed project plan;

• Our Client confirms the corporate structure;
• Collecting due diligence from our Client.

• Our Client signs the corporate bank account opening forms;
• We prepare a business plan;
• We visits the bank for interview;
• The Bank Legal and Compliance Department review and approve the banking application;
• The Bank Front Office email corporate bank account numbers to our client.

• The Bank Operations Department mails the internet username and passwords to our Client;
• Some of our Clients’ request we activate the internet banking on their behalf.

• we confirms all Client due diligence is received;
• We couriers to our Client the complete original company and bank account documents;
• Our Client completes our web page feedback survey;