Establishing a company in another country seems to be hell, but in reality, it is not so troublesome, which is felt here. Saudi Arabia has relaxed measures that are required in doing business or establishing a business. It is, therefore, quite easy to open company in Saudi Arabia, armed with the right information, and be sure to reap from a growing market. You can go through all the easy steps that you are supposed to take to achieve this, as explained in this article. Let’s get started!
Why open a company in Saudi Arabia?
The economy of Saudi Arabia occupies leading positions throughout the Middle East due to its large market, well-developed infrastructure, and encouraging environment for business. Besides this, it has several policies favouring foreign investors. Opening a company in Saudi
Arabia will open wide horizons for business opportunities and the chance to extend to other markets too.
Types of Businesses Available in Saudi Arabia
- LLC: This is a favourite among small and medium-scale enterprises wherein the owner will answer for the amount he or she has invested in the business.
- Joint Stock Company: Suitable for bigger organizations, many shareholders are expected in the company.
- Branch Office: Another opportunity that Saudi Arabia offers is the branch office where the foreign company can register under the name of the company currently in existence.
Both forms of companies have their legal requisites, and hence it would be a very intelligent move to decide which type of company you want to set up based on your business strategy.
Step 2: Choose Your Business Operation
The second step towards opening your company is to choose what type of business you want to enter into. Within the Kingdom, there are different types of activities allowed, from trading and production to consulting and IT services.
It is also necessary to conduct a market analysis to know what is in demand in Saudi Arabia. This will enable one to understand the competition and who one’s potential customers are.
Step 3: Reserving Your Company Name
Once you are done with the business activity and selection process, you should give your company a name. It has to be a unique name, one that would correspond to the kind of business; everything had to be perfect. In the Kingdom of Saudi Arabia, it shall be known as a trade name and shall be filed with the Ministry of Commerce and Investment for its approval.
In naming the company, it has to obey some of the rules, such as: using some of the prohibited phrases or words while referring to any link with the government, even if the words are unpleasant. You still wait until you are freed by the registry, then proceed and register the name.
Step 4: Gathering of all the Required Papers
There are a few papers that you must prepare to open a company in Saudi Arabia. The most common ones include:
- Articles of Association: It is concerning the set of regulations regulating your company’s performance.
- Shareholders’ Resolution: In case you are to have shareholders, you will have to get their consent before forming the company.
- Proof of Identity: passport ID and any residence permit that you may have (originals followed by photocopies).
Such documents must have their originals translated into Arabic and then notarized. You may require consulting a lawyer to minimize common pitfalls that may arise in the process.
Step 5: Register Your Company
The other requirement after setting up your documents is to reregister your company with the Ministry of Commerce and Investment (MCI). The last process is rather simple and may be performed online, as a rule.
After the formation of the company, you will get the commercial registration number. This number is significant as it provides a manifestation that your corporation is legally entitled to operate in Saudi Arabia.
Having gotten your commercial registration number, you can now proceed to open a business account. Most banks in Saudi Arabia offer business banking services, but you will need to provide the following documents:
- Commercial registration number
- Residence proof of the company
- Company directors checking
Step 7: Obtain any necessary local, state, and federal business licenses and permits.
- Municipality License: compulsory for all the companies and firms intending to do business in Saudi Arabia.
- Special Activity Licenses: If you operate in the selective sector, for example, the health care or educational sector, there are high chance that you will require permission from the appropriate authorities.
Step 8: Recruitment of Staff and Implementation of the Payroll System
When your business is incorporated, you can start recruiting people to work for you after you have acquired the necessary licenses. Saudi Arabia has a strong population of workers, and you can employ either the national workers or even the international workers. Please remember that there are some regulations in Saudi Arabia before employing expatriate workers that you may be required to get a working visa for them.
Step 9: Office Space Hunting
Finally, it comes to your office. Now that your business has been formally registered and staffed, you will require a place where you can conduct your business. From offices to
warehouses to selling spaces, location is one of the biggest assets you want to invest in for your business.
There are two options available to store location, which are leasing and purchasing depending on the business needs. Some forms are quite popular, such as co-working, which is cheaper most of the time, at least at the start.
Step 10: Marketing your company
is valuable since it helps you to expand your customer base and also increase your earnings. Some popular methods include:
- Social Media: The use of social media networks such as Instagram, Facebook, and even LinkedIn proves to be very effective in making contact with potential clients. ● Networking: Take your facts and figures to business events and business conferences to know other business owners.
Conclusion
You now know this since the process of how to set up a company and start your own business in Saudi Arabia has been made easier through this article. In this respect, the notion is simply to be ready for the job, to understand what is required, and if uncertain, should ask. However, if well managed, the dream of starting a business out of an idea and making it in Saudi Arabia adds up.