A Comprehensive Guide to Setting up a Business in Saudi Arabia
The Ministry of Investment in Saudi Arabia, formerly known as SAGIA (Saudi Arabian General Investment Authority), serves as the primary authority for foreign companies looking to expand into the Kingdom. If international companies wish to establish a presence in Saudi Arabia, they are required to obtain a foreign investment license from the Ministry of Investment and fulfill specific criteria. By obtaining the foreign investment license from the Ministry of Investment, international companies can proceed with their expansion plans and contribute to the growth and development of the Saudi Arabian economy.
What are the steps to register in Saudi Arabia under MISA?
Step 1 – Application for Ministry of Investment (MISA) License
To establish a company in the Kingdom of Saudi Arabia (KSA), foreign investors must obtain a license from the Ministry of Investment of Saudi Arabia (MISA), which serves as the foreign investor licensing authority. This license is the first step in the company incorporation process and is required for the company’s establishment in KSA.
The process of obtaining a license involves submitting an application to MISA, which typically takes 2-4 weeks to process. Once the license is issued, it must be renewed annually to ensure the company’s compliance with KSA’s regulations. This licensing requirement is an essential aspect of the KSA’s efforts to attract foreign investment and promote economic growth.
Step 2 –Commercial Registration with the Ministry of Commerce
The Ministry of Commerce (MoC) in KSA serves as the registrar for all companies. Once the MISA license has been successfully issued, the next step is to register the company with the Ministry of Commerce. As part of this registration process, the company needs to prepare the Articles of Association (AoA) in accordance with the Saudi Companies Law. The AoA should be drafted to comply with the regulations and must be signed in the presence of a public notary.
Upon approval and signing of the required documents, the commercial registration (CR) will be electronically issued. The CR serves as the company’s certificate of incorporation and local trade license. The issuance of the Commercial Registration usually takes 2-4 weeks, depending on the time required for external licensing approvals. It is important to note that the CR needs to be renewed annually.
Step 3 – Registration with the Chamber of Commerce (CoC)
The Chamber of Commerce (CoC) in KSA serves as a crucial platform for attesting and legalising all corporate and legal documents issued by companies. This step is essential in order to proceed with the subsequent post-licensing procedures and the issuance of employees’ visas. By utilizing the services provided by the Chamber of Commerce, companies can ensure the authenticity and validity of their documents, thereby complying with the necessary requirements for further administrative processes.
Step 4 – Registration with The Ministry of Labor
In order for a company to issue work permits and visas for non-Saudi national employees, it is mandatory to register with the Ministry of Labor (MoL). This registration process is essential for companies to comply with the rules and regulations set by the MoL. Once the registration is complete, the company becomes eligible to apply for work permits and visas for its non-Saudi employees. This is an important step in the hiring process and ensures that the company’s workforce is legally authorised to work in KSA.
Step 5 – Registration with General Organization for Social Insurance (GOSI)
To streamline the process and enhance clarity, the flow for registering and paying social insurance for employees in KSA can be modified as follows:
- KSA companies should register on the General Organization for Social Insurance (GOSI) platform before employing Saudi and non-Saudi nationals.
- During the registration process, the company will provide necessary details such as company name, address, contact information, and legal documentation.
- Once registered on the GOSI platform, the company can proceed to register each employee.
- All Saudi national employees should be registered as officers of the company through the portal.
- Non-Saudi national employees will also need to be registered individually, providing their relevant information.
Social Insurance Payments:
- After employee registration, the company is responsible for paying the social insurance contributions on a monthly basis.
- The company must calculate the total amount to be paid based on the number of registered employees and their respective salaries.
- The calculated amount should be submitted via the GOSI platform.
- The GOSI platform serves as a centralized system for managing social insurance registration and payments.
- Companies can access the platform using their registered credentials to perform various tasks, such as employee registration, payment submission, and accessing reports.
- The platform ensures secure and efficient handling of social insurance matters.
Step 6 – Registration with the Zakat Tax & Customs Authority (ZATCA)
Below, is the steps of registration and tax-related processes for companies in Saudi Arabia:
- All companies operating in Saudi Arabia must register with the Zakat, Tax, and Customs Authority (ZATCA).
- During the registration process, companies will provide necessary details such as company name, address, contact information, and legal documentation.
- Once registered with ZATCA, companies can fulfill their tax obligations, including withholding tax payments, VAT filing, and corporate income tax payments.
- Companies need to ensure compliance with the applicable tax laws and regulations of Saudi Arabia.
ZATCA Online Portal:
- ZATCA provides an online portal for registered companies to access and manage their tax-related activities.
- Companies can log in to the portal using their registered credentials to perform various tasks.
Withholding Tax Payments:
- Companies can use the ZATCA online portal to calculate and process withholding tax payments.
- The portal will provide guidance on the applicable rates and requirements for withholding tax payments.
- Companies are responsible for filing their VAT returns through the ZATCA online portal.
- The portal will provide the necessary forms and guidelines for accurate and timely VAT filing.
Corporate Income Tax Payments:
- Companies can use the ZATCA online portal to calculate and make corporate income tax payments.
- The portal will provide the relevant forms and instructions for submitting corporate income tax payments.
Customs Services and Import/Export Fees:
- The ZATCA online portal also serves as a platform for customs services and payment of import/export-related fees.
- Companies can use the portal to access customs-related information, submit required documents, and make payments for import/export-related fees.
By following the above steps, companies in Saudi Arabia can effectively register with ZATCA and utilise the online portal for processing tax payments, VAT filing, customs services, and payment of import/export-related fees.
Step 7 – Obtain & Register National Address
A physical office address is a mandatory requirement to register a business in KSA. Once established, the office address must be submitted and registered with Saudi Post (SPL) as the company’s correspondence address. The national address enables KSA companies to receive services such as e-commerce and postal services (Wasel).
Step 8 – Issue General Manager (GM) Visa & Iqama
To simplify the flow for obtaining the necessary visas and permits for General Manager in Saudi Arabia, the following modified flow can be implemented:
- Working Visa Application:
- The General Manager’s working visa is applied for from their country of origin.
- The working visa is issued as a one-time entry to Saudi Arabia.
- Entry to Saudi Arabia:
- Upon arrival in Saudi Arabia, the General Manager can enter the country using the issued working visa.
- Transfer to Exit and Re-entry Visa:
- After arrival, the working visa can be transferred to an exit and re-entry visa.
- This allows flexibility for the General Manager to exit and re-enter Saudi Arabia as needed.
- Residence Permit (Iqama):
- The General Manager’s residence permit, known as an Iqama, is obtained after arrival in Saudi Arabia.
- The Iqama serves as a legal document for their residency and employment in the country.
Step 9 – Register with Absher, Muqeem and QIWA portal
Each of these Government portals are required to manage and maintain the company’s operations including the employment activities, such as visa & Iqama issuance, renewal & cancellation.
Step 10 – Initiate bank account opening process
Once the foreign company has successfully completed the aforementioned steps, the next stage involves opening a corporate bank account in Saudi Arabia. This process typically takes an additional 2-4 weeks, which can vary based on the complexity of the company’s ownership structure and the Know Your Customer (KYC) requirements of the chosen bank.
How can Rosemont Partners help?
Rosemont Partners KSA is regularly assisting foreign companies with business registration in Saudi Arabia. We provide comprehensive support throughout the entire process, including licensing, drafting legal documents, registration with the relevant Ministries, and processing visas for employees
If you need support with registering a company, compliance or immigration matters, reach out to us today.