Saudi Arabia’s economy is not only one of the largest in the region, but it’s also the second fastest-growing economy in the world – behind only India. Continued diversification efforts have seen the country’s non-oil revenues reach double digit growth in recent years, with more predicted on the horizon.
So, if you’re thinking of starting a business in the Middle East, here’s why the Kingdom of Saudi Arabia could be the ideal location.
Overview of the business landscape in Saudi Arabia
Like many other countries in this part of the world, oil-related industries account for much of Saudi Arabia’s economic output. With 17% of the world’s petroleum within its territories, the precious resource generates over USD 400bn in revenues every year.
However, Saudi’s rulers have successfully rolled out numerous initiatives in recent years to diversify the economy and put the country on a steady footing for the long term.
While oil revenues still account for around 40% of the country’s GDP, non-oil activities have increased significantly in recent years. Numerous other industries comprise the rest of Saudi Arabia’s vast economy, with notable sectors including fertiliser production, plastic and metal manufacturing, and shipbuilding.
Another of the country’s largest industries is construction. It is estimated that the country’s construction output will hit over USD 180bn by 2029 – up 28% over the previous five years.
Types of legal entities in Saudi Arabia
Foreign entrepreneurs are permitted to form several legal entities when starting a business in Saudi Arabia. These include a subsidiary of a foreign company, a Limited Liability Company (LLC) and a Joint Stock Company (JSC).
These entities and more can be set up under different license types. As a general rule of thumb, foreign investors are permitted to operate under a services, industrial and agricultural license and retain 100% ownership without conditions.
Foreign businesspeople are also allowed to operate under real estate, trading, mining and professional licenses, among many others, but they may be required to work with a local sponsor or company agent.
The entity and license type that’s right for you will depend on your intended activities. The team at Creative Zone will advise on the most suitable pathway for your business after an initial consultation.
Business Setup in Saudi Arabia: Step-by-step
When you work with the team at Creative Zone, we will help you establish your Saudi Arabia business in just four simple steps.
Step 1 – Choose your business structure
First things first, you will need to outline your intended activities and the industry in which you need to work. This will determine whether it is best to set up in mainland Saudi Arabia or a special economic zone, as well as the license type and company structure that you require.
Step 2 – Trade name registration
With your structure and required license determined, it is time to choose a company name. At this stage, you must be sure to choose one that is not too similar to any other business. It must also be free of any words or phrases likely to cause offence.
Step 3 – License application and approvals
You are now ready to apply for your license and approvals from the Ministry of Investment Saudi Arabia (MISA). As well as your completed application form, you will need to submit all supporting documentation.
At this stage, you must also get your Articles of Association notarized and register with the relevant government departments for taxation, insurance and employment.
Step 4 – Receive license and open bank account
Once your commercial license has been issued, you can open a Saudi Arabian bank account to make and receive payments.
Licenses are usually issued within two to four weeks, depending on your business activity.
Documents required to set up a business in Saudi Arabia
When starting a business in Saudi Arabia, you will be required to submit numerous documents at various stages of your application. These include:
- Board Resolution
- Certificate of Incorporation
- Investment License Application Form
- Articles of Association
- Passport Copies for All Shareholders
- Proof of Address
- Proof of ID
Benefits of starting a business in Saudi Arabia
As well as a large and growing economy, there are many more compelling reasons to set up in Saudi Arabia.
For one, the country has an incredibly low crime rate and regularly ranks among the safest countries in the world. It recently topped the list of the most secure countries in the G20, beating South Korea, the US and many EU countries.
Saudi Arabia also performs well on the global stage in terms of both education and healthcare.
Expatriate compounds provide high standards of living and offer a great buffer against the initial culture shock that some experience when moving to such a conservative country.
Foreigners doing business out here also benefit from minimal income and sales tax liability, as well as a great support network, particularly for non-oil-related businesses. The country’s rulers are offering billions of dollars in support to businesses across a wide range of industries to create a broad, strong and futureproof economy outside of oil production.
Why Work with Creative Zone?
Every business wishing to trade in Saudi Arabia must be correctly licensed. And while the company formation process is designed with simplicity in mind, it can be daunting if you are new to working in the country.
That’s where Creative Zone can help. We have a long and successful history of helping investors start new lives here in the Middle East. Our dedicated team are well-versed in the region’s business and real estate markets, as well as the complexities of the immigration process.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in Saudi Arabia, Creative Zone is your ideal starting point.
Get in touch today to set up your business in Saudi Arabia.
