Company Incorporation in Saudi Arabia

Saudi Arabia, officially the Kingdom of Saudi Arabia, is a country on the Arabian Peninsula in Western Asia. The second largest in the Arab world, but with the largest economy though. The country has become the world’s 2nd largest oil producer, and the world’s largest oil exporter, controlling the world’s 2nd largest oil reserves and the 4th largest gas reserves. Saudi Arabia is considered both a regional and middle power.

These are some of the structures in Saudi Arabia;
1. Limited liability company (LLC)
2. Branch
3. Representative
4. Sole trader

Limited liability company (LLC)
An LLC is the most common form, and a particularly popular vehicle when entering into joint ventures with Saudi partners. The minimum capital investment required to establish an LLC is SR 500,000 and must have between 2 and 50 shareholders. Both natural persons and corporate entities may be shareholders.

• Minimum share capital – USD 26,000
• At least one shareholder is required
• 1 director is required to start a business
• Resident director – No
• Timeframe – ± 2 months
• Corporate tax rate – 20%
• VAT rates – Standard rate is 5%. There are no reduced VAT rates.
• Full foreign ownership – Yes, it is allowed.
• Double tax treaties – Yes approx. 55 double tax treaties
• Tax exemptions – Non-resident companies and investors are not liable for Zakat
• Tax incentives – Investors who open a company in the regions of Ha’il, Jazan, Najran, Al-Baha, Al-Jouf, and the northern territory benefit from tax concessions.

Branch
Foreign companies may register a wholly foreign-owned Saudi branch office, provided that they obtain the requisite license. The branch may engage in commercial activity within the scope of its licenses. Although not a locally incorporated entity, a foreign company branch in Saudi Arabia is required to deposit an amount equivalent to the capital required for an LLC. Branch office registration follows the same general procedure as the registration of an LLC, except that there are no Articles of Association to be approved. 

Why Saudi Arabia?
• Tax benefits
• Welcoming environment
• Innovation
• Broad economy
• Safety, security, and standard of living