FREQUENTLY ASKED QUESTIONS

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Why should businesses consider expanding to Saudi Arabia?

Saudi Arabia is actively inviting international companies to establish a presence and their headquarters in the Kingdom with offers of several incentives for foreign investors. With a GDP of USD 1 trillion and a rapidly growing economy, Saudi Arabia presents one of the fastest-growing markets among the G20 nations. The country's strategic location, well-developed infrastructure, and large consumer base make it an attractive destination for businesses seeking to expand.

What entities can you set up when venturing into Saudi Arabia?

When venturing into Saudi Arabia, you can choose from the following corporate structures:

  1. Limited Liability Company (LLC)
  2. Limited Liability One-person Company
  3. Joint Stock Company (JSC)
  4. Foreign Company Branch
What is Paid-up Capital, and how does it apply to a Limited Liability Company (LLC)?

Paid-up Capital refers to the amount of money that a company has received by selling its shares or stock directly to its investors. In Saudi Arabia, foreign LLCs must have a minimum share capital of SAR 50,000, as recommended by the Ministry of Investment. Although this capital does not necessarily need to be deposited in a local bank, it can be considered as working capital on the company's balance sheet. However, it's worth noting that specific minimum capital requirements may apply to certain activities.

How does the Ministry of Investment issue licenses for businesses in Saudi Arabia?

The Ministry of Investment (MISA) is responsible for granting new investment licenses and processing requests to amend existing licenses. To conduct business in the Kingdom, an entity must acquire a license from MISA. Several essential licenses are issued by MISA, including Services Licenses and Entrepreneur Licenses.

What documents are required for obtaining a Services License?

In order to acquire a Services License, you must submit the following documents:

- Commercial registration of the shareholder company that is attested by the Saudi Embassy or copies of national identity cards.

- Financial statements of the foreign company for the previous financial year that are attested by the Saudi Embassy.

What are the rules and restrictions associated with a Services License?

Some rules and restrictions for a Services License include ensuring consistency between the total percentage of Saudi shareholders and the capital, with specific financial limits set by MISA. Premium residence holders may be exempted from specific document requirements. Additionally, activities related to construction may have specific limitations.

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