Company Formation Services in Saudi Arabia
Over the years, Saudi Arabia has developed itself as one of the premier global destinations for trade and business and has successfully attracted investors across the globe. Also, it has provided visible support for company formation services and has ensured that clients do not face any hassles in their professional sphere of life. The company formation services in Saudi Arabia has acted as a helping hand for various clients in setting up their business or enterprise.
If you are not having the proper guidance from a professional services firm, Saudi Arabia company formation will be challenging and complex due to strict regulations and legal formalities existing in the country. We will provide you with a detailed report about company formation in the Kingdom of Saudi Arabia. Saudi Arabia now invites investment from foreign countries. Company formation rules may change as per the prevailing economic situations in the country.
Assurance on Reliability and Quality
Established in 1998, Helpline Group has achieved widespread presence across the world in the past ~25 years. With its head office located in Dubai, we serve our customers from across the world through out global offices and partner networks.
Foreign Investment Policy
Saudi Arabia has a very favourable foreign investment policy regulations in the Middle East. As part of the foreign investment policy in 2000, foreign investors in the country should obtain a foreign capital investment license. It is possible for licensed companies to enjoy all the privileges of a Saudi Owned company in the country. It means, such companies can freehold properties and real estate or carry out all the activities that they are licensed to do. There are also benefits of saving from double taxation since Saudi has incorporated an anti-double taxation treaty. For more information on setting up a business in the Kingdom of Saudi Arabia, please consult the following sections or contact Helpline Group.
Legal Structures of the Company
The Kingdom of Saudi Arabia has different company structures on offer. One must understand the basic difference between these structure models and types in Saudi Arabia, and make the best decision based on the ownership needs, requirements and conditions. Helpline Group can guide you through this process and help you choose the most suitable company structure in Saudi Arabia Company Formation.
- General Partnership & Limited Partnership Company
- Partnership Limited by Shares
- Limited Liability Company & Cooperative Company
- Variable Capital Company
- Joint Stock Company
- Cooperative Company
General Partnership & Limited Partnership Company
Also known as a group of company, a general partnership company in Saudi Arabia must need more than two partners in the management. All partners have unlimited liability in a general partnership where their liabilities are extended towards their personal wealth. On the other hand, a limited liability company consisting of general and limited partners. While general partners in a limited partnership have unlimited liability, limited partners have limited liability to the extent of their capital contribution. Helpline Group can guide you through necessary activities of setting up a general or limited partnership company in the Kingdom of Saudi Arabia.
Limited Liability Company
A limited liability company in Saudi Arabia can be formed with a minimum of two directors in the business. An LLC is considered as a private entity and have legal recognition. Shareholders in an LLC only have limited liability to the extent of their contributions to the capital. Requirements in the form of auditing, annual general meetings and filing of accounts are mandatory for LLCs as per the requirements of the law in Saudi Arabia. However, LLCs are not allowed to operate in the banking, insurance, and savings sectors. There are additional provisions of extending the LLC business to a joint stock company or a cooperative as per the business requirement. Helpline Group can guide you through necessary activities of setting up a Limited Liability Company in the Kingdom of Saudi Arabia.
Variable Capital Company
A Variable Capital Company in Saudi Arabia can be formed through a Memorandum of Association for the organisation, which dictates the amount of capital required, partners’ activities and roles and so on. It is possible to incorporate new partners or shareholders in a variable capital company ver easily and the business may increase or decrease its capital requirements as per business requirements. Helpline Group can guide you through necessary activities of setting up a Variable Capital Company in the Kingdom of Saudi Arabia.
Joint Stock Company
A joint stock company is a corporation between five or more investors. Financial obligations and liabilities of partners are limited to the extent of their contributions and participation in investment. It is possible to integrate a joint stock company through the acceptance of the Reverend of Industry or upon the issuance of a Royal Decree. Helpline Group can guide you through necessary activities of setting up a Joint Stock Company in the Kingdom of Saudi Arabia.
It is possible for a joint stock company or a limited liability company to be integrated as a cooperative company for business goals and needs. Most cooperative companies are an association between different parties, including companies. Investment in cooperative companies are variable and are separated into stocks of equivalent value per share. Helpline Group can guide you through necessary activities of setting up a Cooperative Company in the Kingdom of Saudi Arabia.
Other Factors You Should Consider for Bahrain Business Formation
There are different rules and regulations concerning legal requirements in Saudi Arabia. The Capital Market Law governs most of these activities. Major regulations concerning the formation of a business, engaging in business activities, management of import and export and such must be managed as per the legal requirements existing in the country. Helpline Group can help you achieve all these requirements and compliance as per the legal needs existing in the Kingdom of Saudi Arabia.
As per the central government policies, and royal decrees in the Kingdom of Saudi Arabia’s tax system and the ministerial decisions and circulars of the Department of Zakat and Income Tax (DZIT) of the Ministry of Finance and National Economy, all businesses must follow existing policies concerning taxation at corporate and individual levels. Contact Helpline Group for guidance on taxation requirements and conditions.
The Income Tax
The income tax rate in the Kingdom of Saudi Arabia is 20% for all taxpayers. As per the NGIT tax rates, tax rates range from a minimum of 30% for an internal rate of return of 8% to a maximum of 85% for internal rates of return of 20% and above. A tax rate of 85% is applicable to the taxable income from activities of oil or other hydrocarbon production processes in the Kingdom of Saudi Arabia.
Known as the Islamic tax, Zakat levied on Saudi Arabian and GCC natural persons, at the rate of 2.5%.
Withholding tax is applicable to all payments made to non-residents by a resident or a permanent establishment of a nonresident, that are from a source in the Kingdom. 5% of all rents, 15% of royalties, 20% of management fees, and 5% payments to air ticket and such are levied as withholding tax in the Kingdom of Saudi Arabia.