Saudi Arabia is rapidly becoming a global business hub, offering lucrative opportunities to foreign investors. With its robust infrastructure, growing economy, and business-friendly policies, starting a business in Saudi Arabia can be a profitable venture.
While it is possible to carry out the necessary procedures for establishing the business all by yourself, enlisting the help of a consultant can significantly simplify the process and make it more efficient.
In this blog, we will explore the process of setting up a business for foreigners, highlighting the unique aspects of business registration for non-GCC citizens compared to GCC nationals, and detailing the steps to obtain the necessary permits and licenses.
- Identifying the Type of MISA License
The Ministry of Investment of Saudi Arabia (MISA) regulates the entry of foreign investors into the Saudi market. Depending on your business activities, you need to identify the appropriate MISA license. Common categories include:
- Service License: For consulting, IT, or professional services.
- Trading License: For retail or wholesale businesses.
- Industrial License: For manufacturing or production-related businesses.
Proper identification of the license type ensures smooth processing later.
DuVolks can help you with this process, ensuring that all necessary paperwork is accurately completed and submitted to the relevant authorities, making the whole process smoother.
To learn more about this get in touch with us
- Selecting Business Activities
Clearly define the scope of your business operations. This is crucial as the permitted activities must align with your MISA license. Be specific about what your business will offer, as only the approved activities can be legally conducted.
- Preparation of Foreign Entity Documents
You’ll need to prepare and compile documents for your foreign entity, including:
- Company registration certificates.
- Board resolution for investment in Saudi Arabia.
- Details of authorised signatories.
Ensure these documents are accurate and complete to avoid delays.
- Legalisation of Foreign Entity Documents
All foreign documents must be legalised for acceptance in Saudi Arabia. This involves:
- Attestation by relevant authorities in your home country.
- Certification by the Saudi embassy in your country.
This step authenticates your documents for use in Saudi Arabia.
- Obtaining an Investment License from MISA
Submit the legalised documents to MISA and apply for an investment license. This license is mandatory for foreign investors to operate legally in the country. The process involves thorough scrutiny of your application, so ensure all details are accurate.
- Trade Name Reservation
Choose a unique trade name for your business that complies with Saudi regulations. Submit your choice to the Ministry of Commerce for reservation. Avoid names that may conflict with cultural or legal norms.
- Drafting and Publishing Articles of Association (AoA)
Draft the Articles of Association (AoA) for your business in line with Saudi regulations. The AoA outlines:
- Ownership structure.
- Responsibilities of stakeholders.
- Operational guidelines.
After approval, the AoA must be published as per legal requirements.
- Issuance of Commercial Register (CR)
The Commercial Register (CR) is a critical legal document required to operate your business. Register your company with the Ministry of Commerce to obtain the CR. This document officially establishes your business entity in Saudi Arabia.
- Applying for General Manager (GM) Visa or Transferring GM Sponsorship
Appoint a General Manager (GM) for your business. If the GM is a foreigner, you’ll need to apply for a GM visa. Alternatively, if the GM is already in Saudi Arabia, transfer their sponsorship to your company.
At DuVolks, we process the GM/CEO visa faster than competitors, ensuring a seamless and efficient experience for your business.
- Issuing an Iqama (Residence Permit) for the GM
The Iqama, or residence permit, is essential for the General Manager (GM) to live and work legally in Saudi Arabia. It allows the GM to perform their duties, access essential services like banking and healthcare, and ensures compliance with local laws.
The process involves obtaining a work visa, completing a medical examination, submitting necessary documents, providing biometric data, and paying relevant fees. Once issued, the Iqama serves as proof of legal residency and must be renewed periodically to avoid penalties.
- Registering the GM with the Chamber of Commerce
Registering the General Manager (GM) with the local Chamber of Commerce is essential for conducting official business activities in Saudi Arabia. This process involves submitting key documents such as the company’s commercial registration, the GM’s Iqama or work visa, and an authorisation letter from the company.
Once registered, the GM gains the authority to represent the company in legal matters, sign contracts, and engage in business transactions, ensuring compliance with local regulations and affirming the company’s legitimacy within the business community.
- Activation of Government Portals
Activate accounts on necessary government portals, including:
- GOSI (General Organization for Social Insurance): For employee insurance.
- ZATCA (Zakat, Tax and Customs Authority): For tax compliance.
These portals streamline interactions with government agencies.
- Renting an Office or Outlet
Secure a physical location for your business. Whether it’s an office, warehouse, or retail outlet, having a registered address is mandatory for business registration.
- Registering a National Address
Register your office or outlet with the Saudi postal system to get a national address. This is required for legal correspondence and official communication.
- Opening a Bank Account
Open a corporate bank account in a Saudi bank for financial transactions. You will need the CR, AoA, and other business documents for this step.
- Issuing a Municipality Commercial License
Finally, obtain a commercial license from the local municipality to start operations. This license ensures your business complies with local zoning and regulatory standards.
Key Takeaways
Starting a business in Saudi Arabia as a foreigner involves multiple legal and regulatory steps. Each stage requires careful attention to detail, from obtaining a MISA license to opening a bank account. At DuVolks, we make starting a business easy – we guide you through every step of the setup process, from paperwork to permits. From registration to compliance, we take care of every detail of setting up your business so you can start strong and stay focused.
