Saudi Arabia is willing to grow the private sector up to 65 percent of total GDP by 2030. No wonder the government has taken some ambitious measures to extend the private sector activities within the region in last few years. Both domestic and foreign private companies are getting more benefits and facilities than ever before while operating in the Kingdom.
With new positive regulatory changes, now foreigners can own 100 per cent of their companies, unlike years before 2018. Before that they had to secure local partners as major shareholders of the business.
The Saudi Arabian General Investment Authority (SAGIA) has also boosted the business license processing time. Now it just takes four hours for a license to get processed compared to the previous timespan of fifty three hours. On top of that, now companies only have to show their certified commercial registration and financial statements to get licensed, instead of eight documents to the investment authority.
The National has created a concise of setting up businesses in Saudi Arabia, in just five steps:
- Diligence: Before finally deciding to make investments in a business, the companies need to do their due diligence. They need to speak with local firms, lawyers and foreign companies to know about the operations in Saudi Arabia and the culture of the Saudi market. This will give a better idea on what area of the market should be targeted and what actions are needed to comply with restrictions and regulations.
- Incorporation: As it is already said earlier, SAGIA is the government entity that deals with investment licenses for foreign-owned organizations. Also, entrepreneur licenses are issued by SAGIA as well. You can apply for any of these both online or offline. From the Chamber of Commerce, the businesses need to issue a commercial registration and certification for further activities. A registered address is needed for this. Once licensing is done, the companies are able to set up their bank accounts and allocate sponsor shareholders.
- Setting-up Office: Once the formalities are done, an office space is mandatory. The office space is not just for carrying out the activities of the company, but also it is needed for registering your address that will help to obtain municipality license.
- Municipality License: The municipality license is issued by the Ministry of Labor and GOSI (General Organization for Social Insurance). If you register the address with the ministry, then your national postal service registration, Wasel Commercial Service, will automatically be activated.
- Recruitment: Now everything is done, and you are able to start hiring personnel for the business. Obtaining visas from the Ministry of Labor might take a few weeks, and you should also abide by the kingdom’s Saudization policy. In certain zones, employment ratio of Saudi nationals to foreign expatriates has a bare minimum. Make sure you don’t exceed that.