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Frequently Asked Questions about Saudi Arabia

The following are some of the most frequently asked questions about Saudi Arabia Company Incorporation:

How long does it take to incorporate a Saudi Arabia company?

What are the main advantages of establishing a Saudi company?

How many directors/shareholders are required for a Saudi company?

Does the director have to be resident in the Kingdom?

Are there any nationality requirements for the shareholders of a Saudi company?

Is a Saudi company subject to an annual audit?

Is a Saudi company legally required to have a physical office in the Kingdom?

Is Saudi Arabia company formation expensive to set up?

Am I required to visit Saudi Arabia to set up a company?

What are the minimum capital requirements for a Saudi Arabia company?

Does this capital have to be paid up prior to incorporation?

How long does it take to incorporate a Saudi Arabia company?
Setting up a company in Saudi Arabia is less time consuming thanks to changes to the registration process. To illustrate this, Saudi Arabia has jumped from 76th to 13th place in the World Bank's Doing Business Survey in the past 4 years. The entire process of incorporation will take approximately one month.

What are the main advantages of establishing a Saudi company?
A Saudi company is able to obtain government licenses, open corporate bank accounts and hire expatriate staff, bid on local contracts, issue sales invoices and purchase goods and services from local suppliers.
Saudi Arabia also has the largest financial market in the Middle East, low cost energy, facilities and business services.

How many directors/shareholders are required for a Saudi company?
A minimum of two directors and shareholders are required and a maximum of 50 shareholders are allowed.

Does the director have to be resident in the Kingdom?
No. There is no residency requirement.

Are there any nationality requirements for the shareholders of a Saudi company? 
No. Unlike the legislation of other GCC states, Saudi law does not restrict the level of foreign participation allowed in Saudi LLCs. Companies which are owned by foreigners may also be registered in the Commercial Register. An LLC may have one or more managers and there is no requirement for the managers to be Saudi nationals either.

Is a Saudi company subject to an annual audit?
In accordance with Saudi Arabian company law, a Saudi LLC is required to submit an annual tax return and financial statement.

Is a Saudi company legally required to have a physical office in the Kingdom?
Yes. showing a tenancy agreement is a legal part of the company incorporation process. However, some clients are uncomfortable with or unable to find office premises at this early stage of an engagement. Consequently, Healy Consultants offers the use of our Saudi Arabia office premises to fulfill this requirement.

Is Saudi Arabia company formation expensive to set up? 
The government charge company registration fees for publishing the Articles of Association (5,000 to 10,000 SR) registration with the Ministry of Commerce and Industry (6,000 SR for 5 years of registration), and fee for registering with the Chamber of Commerce (2,100 SR). On average this amounts to the equivalent of US$4,100. On top of this will be lawyer fees, if an attorney is required to set up the business on behalf of the partners.

Am I required to visit Saudi Arabia to set up a company?
No. Healy Consultants can legally set up a company without you needing to travel to the Kingdom. However if you wish, business visas are available for prospective entrepreneurs.

What are the minimum capital requirements for a Saudi Arabia Company?
The minimum capital requirement for formation of a Limited Liability Company (LLC) in Saudi Arabia varies depending on the business sector of the company. For example, a company involved in agriculture requires SR25,000,000 (approximately US$6.67million), while a contracting company requires SR500,000 (approximately US$133,000).

Does this capital have to be paid up prior to incorporation?
Yes. It will be deposited into an ESCROW bank account. The bank will issue a certificate confirming the deposit, and this certificate is one of the documents required for company incorporation. The certificate should also include an undertaking from the bank to retain the amount until after full commercial registration.

Contact Us

For more information on any of our Saudi Arabia corporate services, email email@healyconsultants.com or telephone us at (+65) 6735 0120.

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