A foreign investor may conduct business in KSA by establishing one of the following company structures
· Limited Liability Company
· Joint Stock Company
· Technical Scientific Services Offices
· Temporary Commercial Registration
· Informal arrangements may include distributorships, agencies and franchises.
Foreign investors (other than KSA or GCC nationals) can usually own up to 100% of the capital but exceptions do exist and there are restrictions on the type of business activity the company can engage in. Capital amounts and shareholding requirements differ depending on the type of company and the proposed activities it intends to undertake.
The key document required for investment by foreign interests in Saudi Arabia is an investment license from Saudi Arabia General Investment Authority(SAGIA). For a license application in connection with the setting up of Saudi Arabia limited liability company, the following documents must be submitted:
1. A completed standard license application form signed by each applicant, which must include an authenticated declaration that the applicants have reviewed the foreign investment regulation and its implementing rules.
2. An authenticated resolution of the applicant’s board of directors to incorporate a limited liability company in Saudi Arabia.
3. An authenticated copy of the applicants certificate of incorporation and articles of association.
4. An authenticated copy of the applicant’s balance sheet for a period of two years preceding the year of application
5. A complete copy of the company’s proposed manager’s passport, including the empty pages, as well as four passport size photographs.
Although obtaining an investment license is the most crucial requirement for the establishment of a Saudi company with foreign shareholders, it is only the first step in the formal setting up of the business. the following are the key steps in the post-licensing procedures required to set up a Saudi Arabian limited liability company with foreign shareholders:
1. Once the investment license has been obtained from SAGIA the shareholders must seek the approval of the company’s draft articles of association from the Ministry of Commerce and Industry, in connection with which the following must be submitted:
(a) SAGIA investment license
(b) Several copies of the company’s draft articles of association.
(c) a copy of the certificate of incorporation and articles of association of each shareholder
(d) The Ministry of Commerce and Investment certificate approving the choice of name for the company.
2. Once the Ministry of Commerce and Investment has approved the draft articles of association, the shareholders or their authorized representatives have to execute the articles of association before notary public, for which the following must be submitted:
(a) The letter from the Ministry of Commerce and Investment Directorate of companies addressed to the notary public authorizing the notarization of the articles of association.
(b)The original articles of association as approved by the ministry of commerce and industry directorate of companies and signed by the shareholders or their representatives.
(C) a copy of the certificate of incorporation and articles of association of each shareholder.
(d) An authenticated power of attorney authorizing the representative of each shareholder to sing the articles of association.
(e) A copy of the SAGIA investment license.
(f) A copy of each of the identification cards of the two witnesses present.
3. The next step is the publication of the summary of the articles of association in the official gazette.
4. Thereafter, the shareholders or their authorized representatives have to open an account with Saudi Arabian bank, in which the company’s capital must be deposited.
5. The final step of the registration process is to obtain the commercial registration (CR) certificate, for which the following documents must be submitted to the ministry of commerce and industry.
(a) An authenticated board resolution from the shareholders appointing their respective board members.
(b) Two notarized copies of the articles of association.
(C) copies of the receipt of fees for publication of the summary of the articles of association the official gazette, or the commercial newspaper, as appropriate.
(d)The bank certificate confirming payment of the capital
(e) A copy of the SAGIA investment license.