Business set up in Saudi Arabia

We support business set up in Saudi Arabia

Based in Dubai, UAE, we provide company establishment services for Saudi Arabia. We support not only company establishment in UAE but also company establishment in Saudi Arabia.

  • We have a wealth of real-life information and a track record in the Middle East at our local bases.
  • Based on our experience, we have a track record of establishing companies in Bahrain, Abu Dhabi, and Dubai, Qatar as well as our experience considering joint ventures in Saudi Arabia, and are familiar with local regulations and practices.
  • It is distributed to local sales etc. such as trade and agricultural business.
  • We understands professional Japanese mentality, logic, problem-solving methods, and backgrounds.

Comparison of establishment forms

In many cases, the choice of a branch office or LLC (locally incorporated company) depends on the degree of hope (in terms of business speed, responsibility, and accounting) of consolidation/separation from a Japanese company. Operating costs do not change that much, so in the case of business companies, LLCs (locally incorporated companies) are often chosen, but branch offices are also an option for cautious companies. A representative office does not currently exist in Saudi Arabia. Instead, there is TSO (Technical and Scientific Service Office), but this is not used in recent years. There are two reasons for this: (1) it is placed under an agency and is inflexible in-house, and (2) it is limited to technical support.

branchLLC (local subsidiary)
merit・Same accounting book (If the sales do not increase, the Japanese side can write it off as an expense)
・A certain amount of human support is possible on the Japanese side
・Limited liability (the liability of the local subsidiary of the parent company is limited to the capital, and there is no investor litigation risk)
・Local business activities are easy
Demerit・Unlimited liability (the Japanese side takes full responsibility for the local business responsibility)
・Because there is no decision-making power, the speed becomes slow and you lose competition with companies of other nationalities (contracts are basically based on Japan)
・Corporate No tax but subject to price transfer taxation
・It is necessary to generate cash on a self-supporting basis.
  • Company form: Only a foreign branch can be established.
  1. Limited Liability Company (LLC): Limited Liability Company → General.
  2. Limited Liability One-person Company: Limited Liability One-person Company
  3. Joint Stock Company (JSC): Co., Ltd. (public/non-public)
  4. Foreign Company Branch: Foreign Company Branch → General
  5. Technical Scientific Office (TSO): Something like a representative office (but under the agency’s jurisdiction) 
  • Location of establishment: Currently, it is still common to establish a company in the mainland.
  1. Mainland (Until now, Saudi Arabia has not been called the mainland, and this was the general term, but recently a few have come out, so I’m listing them for comparison.)
  2. Economic City → Currently 4 industries.
  3. Special Economic Zone → Six major sectors such as logistics, travel, marine, e-commerce/digital, pharmaceuticals, and automobiles.

*There is no difference that the mainland is still common.

  • License Types: Service, Industrial, Real Estate, Wholesale/Retail, Public Transportation Period, etc.
  • Business type: Select activities registered under each license.
  • Capital: Determined by activity. No branch required
  • Saudization: The Saudization (Saudi Employment Programme) is obliged to hire one for every three employees. A name lending service is also available.

Schedule

Company Type License  Corporate bank opening Working visa
MISA license 3 month 1 month 3 weeks

Document preparation, notarization in home country, and delivery time from home country are not included.

Required documents

Establishing a company in Saudi Arabia requires a parent company in Japan, etc., and here are the general documents for application.

  1. Full history certificate (company license) (more than 2 years old)
  2. Articles of Incorporation, Articles of Incorporation
  3. Audited financial statements for the last fiscal year (net profit must not be less than SAR 600,000 (approximately 160,000 USD))
  4. Power of Attorney for legal proceedings in Saudi Arabia (Form will be sent after conclusion of contract)
  5. Resolution of the board of directors for incorporation in Saudi Arabia (form sent after signing the contract)
  6. Passport copy of shareholder/GM (color copy for individuals)
  7. Copy of shareholder’s visa (if any)
  8. shareholder certificate

These documents must be translated into English and authenticated by an embassy in home country. After that, we will of course obtain Saudi Ministry of Foreign Affairs certification and Arabic legal translation notarization on the Saudi side. After receiving the contract, we will check the documents of the actual inspection, and we will review the submitted documents and confirm the contents for each company. Templates for newly created documents such as resolutions will be shared here. We also prepare local articles of incorporation for company establishment.

Our scope of work

Registration

・Acquisition of Saudi Ministry of Foreign Affairs certification for related documents and Arabic translation (optional)

Investment license from MISA (SAGIA)

・Ministerial resolution. 

・ Commercial registration (CR) by the Ministry of Commerce and Industry

・Registered as a member of the Chamber of Commerce.

・ Obtained a file number (file 700) from the Ministry of Labor.

– Registered with the General Organization for Social Insurance (GOSI).

– Registered with the Zakat Tax Authority (GAZT).

・Registration of office property title deed/office rental contract. *1

Acquisition of GM work visa Ikama. *2

・Completion of company registration with related ministries (Muqeem, Absher, Qiwa, Mudad).

・One corporate bank account.

*1 Acquisition of office rental contract is the customer’s preparation, but support is available as an option.

*2 In some cases, GMs are assigned or seconded from Japan, and in other cases, they are locally hired. For local hires, support can be provided as an optional service.

Our support related

・Support for registration, acquisition, and opening (excluding options, *1, *2) described in the above registration acquisition related.

・Project management in establishing a local base (confirmation of advance documents, confirmation of regulations, proxy application, confirmation of various conditions, answering questions,

 Acquisition of license, registration with various authorities, acquisition of GM visa, creation of company seal, acquisition of UAE registered mobile number)

Options: Please inquire about this separately.

・General manager recruitment support

Rental of offices, factories, etc.

Introduction to professionals related to accounting audits and tax affairs

Note

1) Saudization

There is a Saudi employment program, and there is an obligation to hire one person for every three employees, which varies depending on the form of each company and the type of license. We can also provide a name lending service, and we can also introduce recruitment agencies for hiring Saudis.

2) RHQ License

Recently, a policy called RHQ License (Regional Headquarters License) has been announced to attract Japanese companies to set up regional headquarters. This policy means that if you do business with the government, you will not be able to participate in bidding without this license. Target companies are

・A multinational corporate group that has two or more branches or subsidiaries in two or more countries other than the location of its head office and Saudi Arabia

As a condition for acquisition,

(1) Recruitment of 3 or more executives [CEO (Chief Executive Officer), CFO (Chief Financial Officer), etc.]

(2) Employment of 15 or more full-time employees

(3) Start business within 6 months after obtaining the license

And so on.

For details, please refer to the following links.

https://www.jetro.go.jp/biz/areareports/2022/d7770848ac4e044e.html

Cost

The above information is general information. In Saudi Arabia, there are regular price revisions by the government as well as differences in price ranges due to establishment and renewal, as well as company types and business types, so if you are considering it, please contact us.