How Foreigners Can Set Up a Business in Saudi Arabia

Jassim Karadan

Jassim Karadan

Senior Business Consultant

Step 1: Legal Framework on Foreigners

For foreigners who wish to start their business in Saudi Arabia, there is a legal framework governing investments. MISA is the Arabic term for Ministry of Investment of Saudi Arabia that oversees foreign business setups. So a foreign entrepreneur can fully own his business up to 100 percent provided he complies with the conditions established by MISA.

Key Factors to Consider​

Foreigners are required to apply for an investment license from MISA.

The business must be in a sector that are open to foreign investment.

Comply with Saudi Arabian General Investment Authority regulations.

Step 2: Select the Appropriate Business Structure

There is a variety of business structures that can be employed by the foreign investor in order to invest in Saudi Arabia. Some of the most common business structures include;

Limited Liability Company (LLC)

This is the most common form of business in which foreign investors engage. An LLC is required to have at least one shareholder and can have one or many owners.

Branch Office

A branch office can be used by foreign companies to carry out operations in Saudi Arabia while not establishing a new separate legal entity.

Joint Venture

A joint venture with a Saudi partner might be an attractive method of having access to the local market shared resources.

Step 3: Get an Investment License from MISA

Foreigners who are looking to invest in Saudi Arabia should have an investment license from the MISA to invest in the country legally. This license allows foreigners to establish and operate in Saudi. 

Processing Time:
MISA takes 30 business days to process applications assuming that documents are submitted correctly.

Step 4: Choosing a Business Location

The business location has a great impact on your success in Saudi Arabia. The city with the largest number of foreign investments is Riyadh, followed by Jeddah and Dammam. Industrial cities such as Jubail and Yanbu have also drawn manufacturing companies into the country.

Accessibility to your target market

Availability of Infrastructure

Accessibility to suppliers and clients

Step 5: Registration of the Company with Ministry of Commerce

With your investment license in pocket, you need to register your company with the Ministry of Commerce

This includes:
Article of Association-this expresses the structure and what the company is meant for and
Commercial Registration (CR)-this basically identifies your company with the law of Saudi Arabia.

Step 6: Open a Saudi Bank Account

Opening a business bank account is essential to keep your financial transactions sound. Foreigners should pay a visit to a local bank and provide all the documents which are as follows

Step 7: Apply for Visas and Work Permits

Most likely, you will have to bring employees from abroad or sponsor your visa, being a foreign business owner. Work permits and visas are managed by the Ministry of Human Resources and Social Development in Saudi Arabia.

Types of Visas:

Investor Visa

It will apply to overseas businessmen and investors.

Work Visa

For the employees whom you are engaging for work in your business

Step 8: Register for Taxes and VAT

In Saudi, corporate tax and VAT is collected from businesses. If your business is registered with a worth above a certain limit then you will have to obtain VAT registration from the Zakat, Tax, and Customs Authority. In 2024, VAT will be at 15%.

Step 9: Sources of Relevant Licenses and Permits

Depending on the type of industry you plan to operate, a license or other form of permit may be required. This will vary with the industry. In case you are setting up business in the construction, healthcare, and education sectors, you are expected to get approval from the various ministries for instance.

Step 10: Employee Hire and Management

There is Saudization, also known as Nitaqat, whereby there must be a percentage of Saudi nationals employed in your company. Make sure you know the labor law governing Saudi Arabia, including employee benefits, working hours, and conditions.

Step 11: MISA's Support Services

MISA offers a number of support services to foreign investors when setting up a business. The support services include:

Investment advisory services

Working with the local network

Support in official bureaucracy

Energy and Renewables

Investment in solar and wind energy projects.

Healthcare

Investment in hospital infrastructure and services.

Real Estate

It is a booming market that followed the housing plans made by the govt.

Opening a Business in Saudi for a Foreigner
With vision 2030 economic reforms and MISA led initiatives, Saudi Arabia today has opened doors to foreign investment. Based on the above steps, a foreign entrepreneur can successfully set up a business in this promising land of the Kingdom.

Follow the legal and regulatory framework; avail of MISA’s support services, and position your business for growth in one of the most dynamic economies in the Middle East.

Saudi offers the most unbelievable ends for entrepreneurs and businesses looking to tap into the thriving economy. After proper planning, market research, and support from experts like JK Management Consultancy, it would be very easy to convert any one of these business ideas to successfully operate at full capacity. From small beginnings to grand-scale operations, Saudi Arabia’s business-friendly environment is perfect for growth and innovation

Leave a Reply

Your email address will not be published. Required fields are marked *

Services

Get in touch with our experienced consultants

Scroll Banner
Get Experts Advice to Setup Your Business in KSA | UAE | UK
Mobile Banner
[wpforms id="1989"]