Business Setup in Saudi Arabia, one of the largest business hub among GCC countries, is the best option to grow your business power or enhance your business. And you all may be confused about the procedures and the steps for KSA business setup – SAGIA. So many question may disturb you if you start to plan for it. Here is the solution for this. Go through the frequently asked questions for business setup in KSA.
KSA Business Setup FAQs
How can I start a business in SAGIA Saudi Arabia?
You can establish your branch company in SAGIA (KSA Business Setup) if you already have an established existing company or Sole Establishment which is not less than one year old.
What will be the legal type of my company?
The legal type of the company is of your choice and it can be of any existing legal form, it is to be reiterated that the setup procedure and the requirement of the Services Providers Establishments is more straightforward and easier comparing to the Trading activity.
What if my business will be into trade or consultations activity?
Consultancy Activity: – Even though the consultancy activities have been specially designated for Saudi nationals, there are some other activities similar to consultations that will be offered to non-Saudi nationals to perform their intended consultancy activity.
Trading Activity: – With regard to the trading activity, the corporate regulations in Saudi necessitate the business owners to show their proof of capital of 30 million in one of the Saudi banks and it can be utilized in trading. Also the regulation necessitates providing three (existing) branch licenses from three different regions.
What option will I have if I am not able show the proof of capital?
Representative office does not demand capital proof. Therefore you can setup a representative office which requires the business owner to trade their goods through a distributor. Business link will also provide you the distribution service.
What should I do if I want to do trading activity in KSA but in minimum cost?
This type of legal entities is possible when the partners on the trade license are two or more foreign companies or foreign company with Saudi national or Saudi national with GCC national individual or corporate entity.
What will be my guaranteed legal documents in this entity?
The entity type will be LLC. The KSA license regulation requires the name of the local to be mentioned in the license as 100% shareholder and the actual investor as a manager. Once the manger becomes the KSA residence upon getting his residence visa stamped on the passport, he will get the entitlement to run the business including bank account transactions. The rights of the actual business owners can be protected through a side agreement where it will be mentioned that the company is owned by the (actual investor) and local will be act as a service provider with yearly fee.
Can I do business all over KSA with SAGIA license?
Yes, it’s possible
Can I start industrial license in KSA?
Yes, it will remain same as the above legal entity (Branch of Foreign company). For the industrial license, industrial land or warehouse should be rented-out to meet the business location requirement. Industrial license will require additional approval from different government entity like municipality, civil defense, police, etc. … Business Link team will handle all the SAGIA approvals on your behalf.
How to start industrial business in KSA?
The person who intends to obtain an Industrial license must be a holder of already existing license which is not less than a year old. By complying with this first requirement of holding an existing license it is required to register the industrial license in the ministry of Economy following the necessary approval from SAGIA .
After the registration in the Ministry of Economy, the owner will choose his preferred location to have his factory built, whether it can be a land or warehouse . This process require numerous approval , from Municipality, Civil defiance and police to ensure the product manufacturing process .
You can choose either to import your raw materials from out- side KSA after taking approval of ministry of economic to import Or you can buy from local market if available. Once the final product is ready to trade , you can start distributing them in KSA Market through a local distributers.
The company should be occupied by 20% Saudi national When it comes manpower. This rule applies to other activities as well.
At the time of license renewal from SAGIA the business evaluation report from Municipality and ministry of economic is needed to ensure that your operation up to the government requirements .
Business link can assist you throughout the KSA business setup including hiring your candidates , find warehouse, staff accommodation, transportation Etc…
Do I need commercial office to register my company in KSA?
Yes, it’s mandatory. We can provide you with numerous option to have this requirement fulfilled. We have virtual office, actual office, business center, etc. so that we can offer you as per your requirement. We also provide P.O. Box no for bank account opening requirements.
Can I start a fresh entity – establishment in KSA?
No, foreign investors can enter KSA market only by establishing branch of there existing business or they should come under GCC or Saudi national sponsorship.
How to start LLC Company in KSA?
This type of legal entities is possible when the partners on the trade license are two or more foreign companies or foreign company with Saudi national or Saudi national with GCC national individual or corporate entity.
How long is take to get SAGIA approval?
It will take up to 10 to 15 working days to complete all the formalities from the day we receive all the required original document.
What are the documents required to open a branch in KSA?
Please note that all the below documents must be translated into Arabic and attested from the Ministry of Foreign Affairs and Saudi Consulate.
- Company registration certificate (License)
- Memorandum of association
- One Year audit report
- Shareholders passports copy plus national ID
- Board of directors
- Appointed Manager passport copy
- Power of attorney to business link team in KSA
What will be the cost involved to do the formalities?
The cost of the business setup is as follows: (cost is in SAR payable 100 % in advance)
| MOFA Documents attestation | 1,000/- SAR |
| SAGIA LICENSE FEE | 12,000/- SAR |
| Commercial certificate | 6,000/- SAR |
| Office & P.O.BOX | 6,000/-SAR |
| Business Link Services charges | 19,000/-SAR |
| Total | 44,000/-SAR |
What will be Business Link team’s scope of work included in this offer?
- Provide the legal advices and answer all client’s enquiries during the process.
- Ensure the correct legal type and business activity according to the information provided by the client.
- Ensure all documents provided to SAGIA are in order and notarized.
- Apply for SAGIA approval.
- Draft articles of association for LLC Company.
- Notaries article of association for LLC Company.
- Provide local address plus P.O.BOX.
- Provide all original documents to SAGIA for final license.
- Pay all fee to get final business license.
- Get Commercial Registration Certificate.
- Get Chamber of Commerce Certificate.
- Register the company in Ministry of Labor.
- Register the company with Tax Authority (Zakat).
- Register the company social insurance (GOSI).
- Assist in opening Bank Account.
- If company activity needs special approval, extra fee will be applicable
What other services can be provided by Business Link in KSA?
- Legal advice to cover all business operation needs.
- Activity special approval assistance.
- Appointed manager residence visa process.
- Finding office location as per client requirements.
- Do KSA national recruitment (active or non-active).
- Visa transfer for local requirement.
- Outside country visa process.
- Assist in employee’s bank account opening.
- Find staff accommodation.
- Provide transportations assistance if required
- Meet and assist services from Riyadh airport to local hotels.
- Book keeping and Tax filling end of the year.
- Company VAT registration.
- License yearly renewal.
- Employment visas yearly renewal.
- Documents attestation and notarization.
- Family and nanny visas processing.
What will be the visa cost of residence visa and how it works?
There are two types of residence visas in KSA
- Transferable visa if the candidate is locally hired and not exited 3 times of visa transfer, the cost of it will be depending on how many times he has transferred his visa (1st time 2000K, 2nd time 4000K, 3rd time 6000K)
- Overseas recruitment cost 12,000K (government fee)
- Family and nanny visa cost 12,000K (government fee)
How can I pay my staff salaries?
- If the number of the employees in the company is less than 5, you may pay via cash or bank cheque.
- If the number of the employees in the company is more than 5, you may pay via bank transfer from company account to employee account to reflect in WPS (Workers Protection System) portal.
What will be my yearly operation cost?
- Office rent ,if applicable fit out plus transportation.
- Operation cost.
- Staff benefits as per the offer letter and labor law.
- Social insurance of each staff must be paid monthly 22% for Saudi locals 2% for expertise out of gross salary.
- VAT – Every three months if your company is registered.
- End of the year company net profit tax 20%.
- License renewal 65000K SAR.
At Business Link we are providing complete guidance for business setup in Saudi Arabia without any delay. You can get a free consultation from our consultants that gives you a clear understanding about the procedures and cost of setting up a company. Please feel free to contact us.
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