The economy of the country is in full swing. This oppens up new possibilities for a commercial registration in Saudi Arabia. Likewise, the national government has allowed opportunities for foreigners to establish their businesses in the nation. On the other hand, if you already own a business, it is easy to renew your business registration online or in person.
In this article, you will find the steps you need to follow for the business registration of your company in Saudi Arabia. Discover everything about the renewal process of said registration, and the existing commercial structures. Let us see:
1. What are the basic requirements for a business registration?
There are several prerequisites for a Saudi Commercial Registration that you must have prepared. These requirements consist of:
- An investment share capital whose minimum amount must be Saudi Riyal (SAR) 5,000,000.
- The minimum number of shareholders is 2 and a company can have a maximum of 50.
- Limited Liability Companies in Saudi Arabia must appoint an auditor.
- An application for company incorporation must be submitted to SAGIA, with the respective documentation.
- Hire labor through a permit that must be requested from the Ministry of Labor with the necessary documents.
- Companies looking to establish their operations in Saudi Arabia must obtain Zakat. In addition, you must obtain an income tax certificate from the Ministry of Finance.
2. Process to Register your Commercial Business in Saudi Arabia.
To carry out a commercial registration in the country, you must follow a series of legally established steps. These are described below:
2.1 Establish an office in Saudi Arabia
One of the essential requirements before being able to register is to have an office in Saudi Arabia. However, since you do not yet have your license at this stage, you cannot buy a property, although you can rent an office. Consider this within the budget for a commercial registration fees in Saudi Arabia.
2.2 Submit the Articles of Association
You then need to file the Articles of Association of your company with the Saudi Arabian Ministry of Commerce. In this case, these articles are the internal rules that the company establishes to be followed. Also, for you to properly draft the Articles of Association (AoA) you can hire a business attorney.
The process of submitting these articles and their subsequent approval can take approximately 2 days. Thus, once you have received approval from the Ministry, the founders of the business must sign the AoAs. This must be done before a notary public to obtain a commercial registration certificate (CR) in the country.
Once this process has been carried out, you must publish the name of the company and the articles in the newspaper. Also, in the same way, as with the submission and acceptance process, this procedure can take about 2 days.
2.3 Deposit the capital of the company
The next step before obtaining your commercial registration in Saudi Arabia is to make the capital deposit. Also, from that moment you should expect to receive the certificate, which can take about three days.
2.4 Cover commercial registration fees in Saudi Arabia
After you have fully complied with the above requirements, you must pay the fees that correspond to the registration. In this case, the fee for the business registration certificate (or CR) is about SR 6,000 per year.
2.5 Return to the mercantile registry
The return to the commercial register is in case the company in question needs to make changes to the information. Therefore, these modifications must be made within less than one month from the date of request.
2.6 Compliance with mandatory processes
A business must meet a variety of requirements after it has obtained the Business Registration (CR) certificate. In this way, you will be able to legally start a business in Saudi Arabia. Also, all these procedures can be completed at the Saudi Arabian General Investment Authority (SAGIA) simply.
In this way, you can check your commercial registration in Saudi Arabia to determine that you are complying with what is necessary.
2.7 Register the company in the Chamber of Commerce
All companies that have registered must submit a Certificate of Membership in the Chamber of Commerce and Industry. In addition, this process must be carried out within 30 days from the date of registration in the Mercantile Registry. As with other processes, you will need to pay a business registration fee of SAR 2000.
2.8 Register the business in the Zakat and Income Tax department
All companies wishing to establish themselves in the country must register with the General Authority for Zakat and Tax (GAZT). In this way, they will be able to obtain a file number, in addition to obtaining the certificate to start commercial operations. To register in this instance, follow these steps:
2.8.1 Register for a Tax Identification Number
The first step is to obtain the Tax Identification Number (TIN) on the GAZT website. To do this, you must do the following:
- Register on the official website of the General Zakat and Tax Authority following the established parameters.
- After you have completed the above process, the TIN will be available to you.
2.8.2 Re-enter the GAZT portal
After obtaining the TIN, re-enter the GAZT portal so you can start the registration process. To do this, use the username and password that you created in the previous step. In addition, you will receive a code on your phone so that you can authenticate the earlier registration.
2.8.3 Select VAT registration
The next thing to process your commercial registration in Saudi Arabia is to select from this point the option “Register for Value Added Tax (VAT)”.
2.8.4 Complete the details and the necessary documentation
This step includes giving detailed information regarding your business, as well as uploading the necessary documents. In this case, you must include the specified details which include:
- Taxpayer details.
- Financial details of the company.
- Financial representative.
Next, you will know the details of each of the mentioned steps.
- In the case of the taxpayer details section, the details of the TIN and the Commercial Registry will be filled in automatically. In addition, you must complete information related to the import or export of goods or services. An IBAN so that it can be associated with the VAT account of your company.
Likewise, you must enter the date on which the company became eligible for Value Added Tax.
- Regarding the financial details of the company, these will serve for the evaluation of eligibility for VAT. In addition, you will need to enter data such as current and projected taxable sales and expenses. Then, you must attach the requested documents such as income statements, customs reports, etc.
If you do not provide this evidence, you could receive an audit to verify what you declared.
- Finally, the option of a financial representative is only for those who do not reside in Saudi Arabia. For a commercial registration in Saudi Arabia, residents can skip this part of the registration. However, non-residents must provide the necessary information from their tax representative.
Details include:
- Tax Identification Number (TIN), if you have one.
- ID number
- Telephone.
- Email.
2.8.5 Declaration of the authenticity of the information
The next and final step in registration is to declare that the information provided is authentic. Additionally, the taxpayer must provide their full name, ID number, and their position in the company. This way, you will get an application number and a receipt that you can download.
2.9 Registration in the General Organization of Social Security
Both employers and workers must register with GOSI (General Organization of Social Insurance). In this way, you can meet this vital requirement for a Saudi Commercial Registration.
2.10 Municipal Registry and in the Labor Office
Companies wishing to establish themselves in Saudi Arabia must obtain a municipal license before the next registration. Then, you must make the corresponding registration in the Labor Office to be able to hire personnel.
2.11 Commercial registration renewal in Saudi Arabia
To renew the commercial registration of your company in case it has expired, you can do it online. Also, this service is available in both Arabic and English so you can do it comfortably. To do this, you must enter the web portal of the Ministry of Commerce and pay the necessary fees.
These have a fixed cost, in addition to other variables depending on the type of activity of the commercial registry. However, you can choose to renew directly at any of the offices of the Ministry.
3. What are the types of business structures?
In Saudi Arabia, there are several business structures that you can choose from to establish your business entity in the country. These structures can be:
3.1 Limited Liability Company (LLC)
LLCs in the country must have a minimum number of partners of 2 and a maximum of up to 50. Similarly, they only have the responsibility under the social capital invested in the company. Also, the minimum capital of a Limited Liability Company must be a minimum of SAR 5,00,000.
3.2 Branch of a foreign company
Another type of structure that a foreign company can establish is a company branch. However, this can only be done after the explicit approval of the Minister of Trade and Agriculture. You can contact our team to discover how to establish this type of commercial structure in the country.
3.3 Commercial agency
In this case, a foreign business must choose a local commercial agent to market its services or products in KSA. In this case, also this type of commercial organization is controlled by the Ministry of Commerce and Industry.
3.4 Join-Stock Companies (JSC)
JSCs must have at least 5 shareholders to be able to start a commercial registration in Saudi Arabia. Furthermore, these shareholders are only liable to the extent of their participation in the Capital Stock of the company. Likewise, in the case of JSCs, said capital varies according to the nature of the company.
3.5 Representative offices
In the latter case, foreign companies can establish a technical and scientific office to provide such support. Thus, they will assist their parent company in terms of market research and research, among others. Likewise, here they will also need the approval of the Ministry of Commerce and Industry to obtain the corresponding license.
4. How can we help you?
The procedure for a commercial registration in the country can be complicated if you are a foreigner. However, by following the steps outlined in this article, you can easily achieve it. In addition, the process for a commercial registration renewal in Saudi Arabia is also simple, as you can do it online. If you wish to receive further assistance from our agency, we are always ready to help.
In our company, we can provide you with the necessary help to comply with this process without delay and easily. Company Formation Saudi continues to offer solutions for investors and company owners across the KSA.
Among our agency’s tailor-made services, you can find:
Do you wish to know more about the process for a commercial registration in Saudi Arabia? Do not wait and contact us at contact@companyformationsaudi.com.