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How to Set Up Office in KSA?

Business
GCC
KSA

20 May 2024

The Middle East, with its unique location bridging three continents and housing 22 diverse economies across roughly 15 million square kilometers, remains a pivotal hub for corporate expansion. In order to attract foreign business, the Gulf states have been steadily liberalizing their national economies and enhancing their overall business surroundings.

KSA, in particular, saw government authorities steadily removing barriers to foreign investment and fostering collaborations between public and private sectors, especially in advancing science and technology education. In recent times, Saudi Arabia has also launched specialized economic zones dedicated to emerging sectors like renewable energy, cloud computing, logistics, and the digital economy. To attract direct foreign investments, the Kingdom has introduced incentives such as tax deductions (or even tax waivers) and streamlined visa processes. All policies appealing to foreign investors are part of a bigger project – the Saudi Strategy Vision 2030, which intends to diversify the economy away from oil. So far, the reforms introduced have generated $1 trillion in new projects that have created 555,000 new jobs over the last four years alone.

In total, the Saudi Vision 2030 aspires to invest at least $40 billion annually in the domestic economy through 2025, creating 1.8 million jobs as part of a five-year strategic roadmap. The Kingdom’s efforts to promote Riyadh as a premier commercial and startup hub in the MENA region are well underway – proving that the region can indeed move away from being dependent on oil and gas exports. All of these efforts have already started attracting a wave of multinational firms and global investors, all of whom are interested in establishing regional headquarters in the Kingdom.

5 Reasons Why It Is Worth Expanding Your Business to KSA

Taxes – If relocating an existing endeavor or starting a new business in a new place, you need to be sure that it works for you financially. For many entrepreneurs, that means ensuring tax efficiency. Saudi Arabia certainly scores highly in this regard. Foreign investors have minimal liability for personal income tax, while corporate tax sits at 15%. What’s more, while Saudi Arabia does apply VAT, many goods and services are exempt and thus subject to a zero rate.

Welcoming Culture – The government of KSA is committed to looking outwards, welcoming both foreign travelers and investments – all to drive a cosmopolitan future for the Kingdom. Entrepreneurs will also find it easy to do business here. So much so, that Saudi Arabia ranks 62nd out of 190 countries in the World Bank’s Doing Business Index.

Innovation – Saudi Arabia is keen to position itself as a global technology hub of the future. To achieve this, it recently outlined a series of initiatives worth over USD 1bn.

Broad Economy – Much like the UAE, KSA is keen to diversify its economy away from oil and gas. And this diversification is set to take place at a lightning pace. The government is offering billions of dollars in support to businesses across a wide range of industries to create a broad, strong, and future-proof economy.

Safety, Security, and Standard of Living – According to the latest Gallup Law and Order Report from 2024 and associated polls, 90% of people in Saudi feel very safe while walking alone. The country offers a high standard of healthcare and education too, which is a great bonus while relocating with the family.

Incorporation Guide

How to set up office in KSA? First of all, do not be afraid to search for local support – they got you covered! Those business support companies in KSA, with their on-site operations and expertise, can efficiently handle all the necessary paperwork with governmental entities on your behalf – ensuring a successful outcome in no time!

However, if you wish, you can approach the registration process yourself. It is not rocket science to expand your business to Saudi Arabia, but you need to collect a list of specific documents to support your application. Below you will find a list of ones that you absolutely need before applying for any license or registering a company in KSA:

A) CR and Trade License
B) Audited financial statement for the last fiscal year
C) Memorandum of Association (MoA) or Articles of Association (AoA)
D) Notarized PoA from a public notary

If you have already prepared all of them, then you are halfway there! The next batch of documents that you will need are:

A) MISA License – 1 Year – there are different codes of activities the company is allowed to do according to the license and the chosen code. For example, sales and marketing advisory code is allowed to do activities within the industry only
B) Name Reservation
C) Drafting and Attesting the local Articles of Association (AoA)
D) Issuance of Commercial Registration (CR)
E) Registration with the Chamber of Commerce (CoC)
F) Registration with The Ministry of Labor
G) Registration with General Organization for Social Insurance (GOSI)
H) Registration for the National Address
I) Registration with General Authority of Zakat and Tax (GAZT) and VAT Registration
J) Company Seal
K) Issuance of the GM (General Manager) Visa
L) Registration with Muqeem portal
M) Registration with Absher portal
N) Registration with Qiwa portal
O) Assistance in bank account opening – this point is very helpful, especially for those who are not Arabic speakers.

Partnering with a specialized company that assists in establishing businesses in Saudi Arabia ensures not only a swift and accurate setup process but also provides invaluable guidance on selecting the appropriate activity code tailored to your business’s nature. Additionally, they will thoroughly explain all regulations associated with Saudization.

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