The Ultimate Guide to Saudi Arabian LLC Company Formation

 

Expanding your business or starting a new venture in Saudi Arabia offers incredible opportunities, especially with the country’s focus on economic diversification and business-friendly reforms under Vision 2030. One of the most popular ways to establish a business in the Kingdom is through a Limited Liability Company (LLC). At Capital International Group Saudi, we specialize in helping investors navigate the process of forming an LLC in Saudi Arabia.

In this guide, we’ll walk you through everything you need to know about setting up an LLC in Saudi Arabia.

1. Why Choose an LLC in Saudi Arabia?

An LLC is the most common business structure chosen by foreign investors and local entrepreneurs alike due to its flexibility and limited liability protection. Key advantages of forming an LLC include:

· Limited Liability: Shareholders are only liable to the extent of their share capital, reducing personal risk.

· Ease of Management: An LLC requires fewer formalities compared to other business structures.

· Foreign Ownership: Foreign investors can own up to 100% of the company in many sectors, subject to Saudi Arabian General Investment Authority (SAGIA) approval.

· Suitable for a Range of Business Activities: LLCs can engage in a wide array of business sectors, including technology, healthcare, and construction.

2. Key Requirements for LLC Formation in Saudi Arabia

To form an LLC in Saudi Arabia, certain legal and procedural requirements must be met. Here’s a breakdown of the essentials:

· Minimum Capital Requirement: While there is no general minimum capital requirement for most sectors, certain industries like insurance and finance may have specific capital mandates.

· Number of Shareholders: An LLC requires a minimum of two shareholders, but it can have up to 50 shareholders.

· Director Requirements: An LLC in Saudi Arabia must appoint at least one director. The director does not have to be a Saudi national.

· Business Activity Approval: You must choose a business activity that is permissible for foreign investment under Saudi law, as certain sectors are restricted.

3. Steps to Form an LLC in Saudi Arabia

Forming an LLC in Saudi Arabia involves several critical steps. Here’s how Capital International Group Saudi can guide you through the process:

Step 1: Register with SAGIA (Ministry of Investment)

The first step in setting up an LLC is obtaining approval from the Saudi Arabian General Investment Authority (SAGIA), now known as the Ministry of Investment (MISA). This allows foreign investors to do business in the Kingdom.

Documents required for SAGIA approval include:

· Passport copies of shareholders

· Articles of Association (AOA)

· Shareholder resolution from the parent company (for branches)

· Power of attorney

Capital International Group Saudi will ensure your documentation is accurate and complete to avoid any delays.

Step 2: Drafting Articles of Association (AOA)

The Articles of Association (AOA) is the legal document that outlines the structure, governance, and regulations of your LLC. This document must be submitted to the Saudi Ministry of Commerce for registration.

Capital International Group Saudi offers expert legal drafting services to help ensure your AOA meets the required standards.

Step 3: Notarization

Once the AOA is drafted and approved, it must be notarized in front of a public notary. We assist with scheduling the notarization and handling all necessary legal procedures.

Step 4: Opening a Corporate Bank Account

After notarizing your AOA, the next step is to open a corporate bank account in Saudi Arabia. The deposited capital will reflect your commitment to the business and must be in line with the declared share capital.

We work closely with local banks to ensure a smooth process in setting up your corporate account.

Step 5: Registering with the Chamber of Commerce

Once your LLC is established, it is mandatory to register with the Saudi Chamber of Commerce. This registration provides your business with an official status in the Kingdom and allows you to access a range of services, including visa facilitation and networking events.

Step 6: Obtaining Licenses & Visas

Depending on your business activity, you may need additional licenses from specific government ministries or regulatory bodies. For example, a construction LLC might need approval from the Ministry of Municipal Affairs.

Additionally, you’ll need to secure work visas for foreign employees. Capital International Group Saudi assists with visa processing, ensuring compliance with Saudi labor laws.

4. Cost of Setting Up an LLC in Saudi Arabia

The cost of forming an LLC can vary depending on the nature of the business and the required approvals. Typically, the costs include:

· SAGIA License Fees

· Chamber of Commerce Registration Fees

· Notarization Fees

· Bank Account Setup and Share Capital Deposit

For a more tailored breakdown of costs, we at Capital International Group Saudi provide a transparent quote based on your specific business requirements.

5. Compliance & Ongoing Obligations

Once your LLC is operational, you must meet several ongoing obligations:

· Annual Audits: All LLCs in Saudi Arabia must submit audited financial statements.

· Zakat and Tax Filings: Foreign-owned companies are subject to corporate tax, while Saudi-owned entities pay Zakat, an Islamic wealth tax.

· Visa Renewals: Work visas and residency permits (Iqama) must be renewed regularly for foreign employees.

We offer ongoing compliance services to keep your LLC in good standing and ensure smooth operations year-round.

6. Advantages of Partnering with Capital International Group Saudi

Setting up an LLC in Saudi Arabia can be a complex process, especially for foreign investors unfamiliar with the local laws and procedures. Here’s how Capital International Group Saudi can simplify the process:

· End-to-End Service: From obtaining SAGIA approval to handling post-setup requirements like visa processing and compliance, we offer comprehensive services tailored to your needs.

· Local Expertise: Our team of legal and business consultants has in-depth knowledge of Saudi laws and regulations, ensuring a hassle-free setup.

· Dedicated Support: We provide ongoing support to help your business grow, including guidance on navigating the Saudi market and expanding your operations.

Conclusion

Forming a Limited Liability Company (LLC) in Saudi Arabia is an excellent way to tap into the Kingdom’s growing economy. With the right guidance, you can navigate the process smoothly and efficiently. At Capital International Group Saudi, we are committed to helping investors like you succeed in establishing and growing your business in the Kingdom.

Contact us today to get started on your Saudi Arabian LLC formation journey!