Saudi Arabia is one among the foremost populous and richest nations within the Middle East, the guts of Islamic and Arab world. It’s divided into 13 regions with 13 regional capitals, which has different status as municipality headed by mayors and therefore the governorates are further subdivided into sub-governorates.
The Kingdoms commitment is to diversify its economy and expand the private sector, improving its competitiveness for building the vibrant society, which can represent the country’s roadmap to a flourishing future.
Over a few years now, the country has developed into a perfect hub for emerging businesses by attracting the investors from across the world. It encourages small and medium sized business to flourish into the country’s ecosystem. Business setup in Saudi Arabia is now far more upfront, thanks to the big reforms in government policies. Additionally, it’s considered vision towards economic process and vibrant society makes it one among the projecting venture destinations. The situation is an important factor because it acts as a connecting link between global trade routes.
Types of company formation in Saudi are:
Single Member indebtedness Company (SMLLC)
Single Member indebtedness Company (SMLLC) may be an indebtedness company, which will have a sole owner, and therefore the owners of the formation are termed as members.
Joint Stock Company (JSC)
A Joint Stock Company (JSC) consists of capital that’s divided into shares of equal value. Shareholders, who are allowed to shop for, transfer and sell their respective shares without affecting the existence of the corporate who own the shares.
Limited Liability Company (LLC)
Limited Liability Company (LLC) is the most ordinarily used business entity in KSA, which allows indebtedness for owners under the company’s debt.
Foreign Company Branch
A Foreign Company Branch may be a company that operates within the jurisdiction through a branch, agency, office or other business forms. The branch of a far off company can represent and conduct business activities in Saudi Arabia. However, it should suits the local law and regulations, which involves using the Arabic for company paper, publications and documents.
SAGIA / MISA
SAGIA or Saudi Arabian General Investment Authority, which is run by the government of Saudi Arabia, which deals with the foreign investment license. The Primary aim of this type of formation is to ease the process of setting up business in Saudi and it helps the business owners to grab advantage of foreign investment with 100% ownership.
Free Trade Zone in Saudi
These economic cities offer benefits for emerging ventures that include low tax rates, tax exemption on custom duties, exposure to the international market and global connectivity.
Jazan Economic City
The Jazan Economic City is a trade zone with an attention on industrial and energy industries. It emphases on critical areas like heavy industries, human capital and lifestyle. There are a spread of business opportunities within the Jazan Economic City that has trading, industrial services, technology, education and employment opportunities.
Prince Abdulaziz Bin Mousaed Economic City
The Prince Abdulaziz Bin Mousaed Economic City is found within the northern a part of Saudi Arabia. A proposed economic city is planned to specialize in five significant sections to satisfy the wants of the investors from different economic industries and sectors.
King Abdullah Economic City
King Abdullah Economic City is situated along the Red Sea coast at a distance of 100 KM from Jeddah. The economic city has functional connectivity with surrounding cities like Mecca and Medina. It’s a neighborhood of Saudi Arabia designed to make the dominion one among the simplest investment destinations.
Tax Scenario in Saudi Arabia
The Department of Zakat and tax is liable for the implementation and regulation of tax laws in Saudi Arabia. There are two components of taxation – tax and Zakat. Tax may be applicable for foreign nationals whereas Zakat is a religious levy applicable for KSA (or) GCC nationals. After company registration in Saudi Arabia, the corporate has to register with DZIT (Department of Zakat and Income Tax) to conduct business in Saudi Arabia legally. The subsequent list consists of personals who qualify to pay income tax:
- A non-resident one that does business activities in KSA
- Non-resident investors
- Resident companies with non-KSA shareholding
- Individuals who conduct business activities within the oil and petroleum sector.
Benefits of opening a corporation in Saudi Arabia
- Saudi Arabia provides a business-friendly environment, which is suitable for little businesses and corporations similar.
- The numerous reforms done by the country within the previous couple of years has made starting a business more convenient.
- The administration provides tax support within the sort of tax exemptions and eliminating custom duties on selected goods and materials.
- Businesses have access to a growing market of potential clients.
- Office spaces are available with excellent amenities.
- Also, financial incentives are available for projects and ventures that support the country’s economic process.
If you are looking for Saudi company formation, our team of professionals will help you to get the license for your business. We believe in transparency and help our clients with best solutions for all their business requirements.
This blog is written by Ms. Manali Chandegala, Partner Relation Executive at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. If you are looking for any consultancy related to setting up a business in Saudi, then please contact us at +971 4 4542366 or email us at info[at]flyingcolour[dot]com.
*Please Note: This article was published on 30th Nov, 2020. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.