SAGIA license for foreign company registration
Non-Saudi and non-GCC nationals/companies (thereafter referred to as foreign investors) looking to register a legal entity in the Kingdom of Saudi Arabia (KSA) require a foreign business license issued by the Saudi Arabian General Investment Authority (SAGIA).
If approved by SAGIA, this investment license will enable our Client to legally serve the local market without the involvement of a local Saudi national. Consequently SAGIA registration is Healy Consultants Group recommended strategy and also the first preference for most of our Clients.
Although SAGIA has made efforts to expedite their review and approval process, it is still challenging, expensive and time consuming to secure a foreign investment license from this Authority.
- The estimated timeframe to secure a SAGIA foreign investment license is 9 months. After SAGIA foreign investment is secured, our Client can i) sign contracts and ii) issue invoices and iii) hiring employees. That said, only after 12 to 13 months will our Client be able to iv) be appointed as bank signatory to the bank account and therefore v) make and receive payments in their Saudi corporate bank account and therefore be fully operational;
- Refer to the summary of the SAGIA registration steps below. For a more detailed step by step, refer to the KSA incorporation steps webpage;
No. Steps Timeframe 1. Preparation of documents, including the investment and Saudization plan. 1 month 2. SAGIA pre-approval application. 2 months 3. Company registration – securing the CR. 3 months 4. Corporate bank account opening and deposit of capital. 2 months 5. Issuance of SAGIA foreign investment license. 1 month 6. Securing an Iqama. 2 months 7. Converting capital account to an operational bank account. 2 months 8. TOTAL estimated timeframe 13 months
- For Clients that cannot wait for 13 months to be fully operational, Healy Consultants Group recommends a Saudi fast nominee solution (click here); With this strategy, our Client will be able to be fully operational in 3 months.
Paid up share capital requirements
- Companies looking to secure a foreign investment license in Saudi Arabia have paid up share capital requirements (see capital levels below);
- The paid up share capital must be deposited into a Saudi corporate bank account before the foreign investment license is issued by SAGIA;
- To those Clients that cannot afford depositing the paid up share capital, Healy Consultants Group recommends our Client proceeds to i) register a Commercial Agency Agreement or ii) choose to register an entity in Dubai or other Middle East country;
- Paid up share capital levels are as follows:
Type of license
Required paid up share capital
US$7.2M (SAR27M) & a 25% Saudi national.
US$8M (SAR30M) to benefit from fully foreign ownership.
Increase investment to SAR200M within 2 years from company registration.
US$267,000 to US$1,334,000 (SAR1 to 5M).
SAGIA will fix the exact paid up share capital during the pre-approval process, after reviewing the 10 year investment and Saudization plans.
If our Client plans to manufacture and install the same in Saudi, then our Client may apply for a service license instead
This amount includes not only the paid up share capital requirements but also the value of the land owed (if any).
Business activities closed to foreign investorsNote: the CPC codes mentioned below can be found here;
- Oil exploration, drilling and production, except the services related to mining sector listed at CPC5115 and CPC883;
- Manufacturing of military equipment, devices and uniforms;
- Manufacturing of civilian explosives.
- Catering to military sectors;
- Security and detective services;
- Real estate investment in Makkah and Madina;
- Tourist orientation and guidance services related to Hajj and Umrah;
- Recruitment and employment services including local recruitment offices;
- Printing and publishing. Except the following activities:
- Pre-printing services internationally classified as CPC 88442;
- Printing Presses internationally classified as CPC 88442;
- Drawing and calligraphy internationally classified as CPC 87501;
- Photography internationally classified as CPC 875;
- Radio and Television Broadcasting Studios internationally classified as CPC 96114;
- Foreign Media Offices and Correspondents internationally classified as CPC 962;
- Promotion and Advertising internationally classified as CPC 871;
- Public Relations internationally classified as CPC 86506;
- Publication internationally classified as CPC 88442;
- Press Services internationally classified as CPC 88442;
- Production, selling and renting of computer software internationally classified as CPC 88;
- Media consultancies and studies internationally classified as CPC 853;
- Typing and copying internationally classified as CPC 87505 and CPC 87904;
- Motion picture and video tape distribution services internationally classified as CPC 96113;
- Commission agents internationally classified at ( CPC 621). –Audiovisual and media services;
- Land transportation services, excluding the intra-city passenger transport by trains;
- Services provided by midwives, nurses, physical therapy services and quasi-doctoral.
Investment and Saudization plan
- Before Healy Consultants Group submits the pre-approval application to SAGIA, Healy Consultants Group will assist our Client to prepare i) an investment and Saudization plan and ii) an accurate complete pre-registration application to the Authority. This registration package is a key component of the licensing process;
- The investment and Saudization plan is one of the most important documents for SAGIA. This document must contain i) a description of the business activities to conduct in Saudi Arabia ii) the professional experience our Client has in other countries, including other subsidiaries iii) the nature and size of the investment activity in KSA iv) 10 year financial projection v) Manpower requirements, training provided and Saudization levels and vi) benefits and advantages of the proposed business activity to the Saudi economy, including the social impact towards the development of Saudi Arabia;
- SAGIA prioritizes the registration of large entities. Therefore the bigger our Client is and the more our Client contributes to the Saudi economy, the higher the chances of a foreign business license approval. The lower the probability SAGIA will request i) a paid up share capital level higher than the one stated above and ii) the appointment of a local joint venture partner.
Healy Consultants Group feesSAGIA LLC total set up cost amounts to US$76,390 on average per engagement. To view the breakdown of our fees, please refer to our SAGIA LLC invoice (click here).