Doing business in Saudi Arabia 2019

Saudi Arabia is the world’s largest oil producer and exporter and controls the world’s second largest hydrocarbon reserve. It’s the only Arab country to be a part of the G20 countries, the Organization of Islamic Cooperation and OPEC. The country’s global standing has created substantial business opportunities and has become a preferred destination for many foreign investors. 

The government eased entry requirements for foreign investors and established the Saudi Arabian General Investment Authority (SAGIA) to assist businesses. SAGIA help businesses with the approval process for operating in KSA, obtaining a license, labour visas and other related items all under one umbrella. 

Basics

Region: Middle East & North Africa 

Income Category: High income 

Population: 32,938,213 

Capital City: Riyadh 

Ease of doing business: 63.5/100

Business culture in Saudi Arabia

Business culture in Saudi Arabia has an approach that’s focused on building relationships rather than getting straight to business. Meetings are usually lengthier and include social time to get to know the people you are working with. They may even start later than scheduled and run overtime too. When greeting people, Saudis will take time to shake each person’s hand while standing, and sometimes a kiss on the cheek will also be exchanged before sitting down. However, men and women do not shake hands or greet each other in public. 

Business visa in Saudi Arabia

Visiting Saudi Arabia requires the correct visa to remain compliant. If you’re visiting for business purposes, you can choose between the business visit visa and the commercial visit visa. If you are permanently relocating, then you’ll need a work visa and iqama.

  • Business visit visa: this visa is for those who wish to visit the Kingdom to work on a temporary basis. This doesn’t allow you to live in the Kingdom or open a bank account.
  • Commercial visit visa: this visa is for those that are visiting the Kingdom for a meeting, a conference or other business purpose. It doesn’t allow you to work in the Kingdom at all.

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Saudi Arabian General Investment Authority (SAGIA)

The Saudi Arabian General Investment Authority (SAGIA) was created to support and promote foreign direct investment in the Kingdom. They were created to enable the private sector and help them overcome the obstacles they face. SAGIA is responsible for making the Saudi market navigable by foreign and local businesses and help boost the private sector by increasing the ease of doing business and local capabilities.

SAGIA have increased ease of business by moving the majority of their services online. Making it a smooth and simple process for those looking to operate a business in the Kingdom. From getting a license to consulting and government services, SAGIA offers many e-services to assist businesses in succeeding through the SAGIA login.

SAGIA license guide

The SAGIA license options are numerous and very specific. It’s essential to get the right license to ensure your operations are compliant. Here is a SAGIA license guide however, for a more indepth version, follow the link at the end of the section.

  • Services license – management consulting, information technology, tourism, training and more 
  • Industrial license – all industrial licenses, such as heavy and light industries and transformative industries.
  • License for a scientific and technical office – for foreign companies that have a Saudi agent distributing the company’s products in the Kingdom
  • Temporary certificate to submit proposal government projects – Entities that need to bid for government projects
  • Real estate license – for companies in the property field
  • Temporary licenses for the performance of a government/semi-government contract – This service shall be provided to the foreign entities that do not have foreign investment license for the contract activity, for which a government or semi-government contract is awarded
  • Trading license – for provided to foreign entities that are interested in the activity of wholesale and retail trade in the Kingdom
  • License for public transport – for international companies that wish to provide public land transport services (buses / metros) within cities in the Kingdom
  • Consulting license for engineering offices – for international companies that wish to provide public land transport services (buses / metros) within cities in the Kingdom
  • Entrepreneur licenses – for entrepreneurs who wish to establish pilot projects accredited by Saudi universities or business incubators.
  • Immediate license – offered to any company in the world and wants to open a headquarters in Saudi Arabia to engage in investment activity immediately
  • Consulting license for technical and economic communication offices – economic and technical offices associated to countries wish to have license
  • License for agents of recruitment and hiring of domestic labor services – foreign companies that wish to engage the activities of domestic labor placement services and temporary employment agency activities for home services
  • Licensing of university colleges and constant universities – foreign companies that wish to conduct educational activities through the university colleges and constant universities in the Kingdom 100%
  • Licensing of audio-visual media – foreign companies that wish to conduct audio and visual activities

For a more comprehensive SAGIA license guide, click here.

Frequently Asked Questions (FAQ)

What is a SAGIA license?

A SAGIA license allows you to establish and operate your business in the Kingdom under compliance. The activity you wish to conduct will determine the license you require. 

What documents are required to obtain the investment license?

The documents required depend on the type of license you wish to acquire. 

What are the conditions to obtain the investment license?

The conditions of obtaining a Saudi Arabia investment license are:

  1. The license applicant must have an existing entity outside the Kingdom
  2. They must have at least 3 years experience in the same activity required
  3. Individuals possessing patents, scientific content and intellectual rights documented by internationally recognized entities are eligible to obtain the investment license

What services are provided by General Investment Authority (SAGIA) for investors?

The Saudi Arabian General Investment Authority (SAGIA) provides a wide range of services, including providing consultancy, study, licensing issuance, post-license services and government services, through an integrated connection with the relevant government agencies

Are there specialized centers that serve investors?

The Saudi Arabian General Investment Authority (SAGIA) has many branches to serve investors in Riyadh, Jeddah, Dammam, Medina, Jubail.

Company formation in Saudi Arabia

 

Company formation in Saudi Arabia has many options for foreign investors looking to enter the Kingdom. There are some restrictions depending on the industry, however, for the most part, foreign investors are welcome to open up many types of companies in the Kingdom. 

The Saudi government are always looking for ways to improve the market for foreign investors. Recently, they placed emphasis on companies that are bringing new or patented technology to the Kingdom, by giving these companies extra incentives. They also introduced the entrepreneur license last year to boost the start up culture in Saudi.  

The main company formation options in Saudi Arabia include:

  • Limited liability company (LLC): an LLC has two or more partners (maximum of fifty) who are liable for the company’s debts respective of their capital contribution
  • Single member limited liability company (SMLLC): is an LLC established by one person. This person is liable for the company to the amount of capital invested. They can assume the position of director, board of directors and general shareholders’ assembly.
  • Foreign branch company: this is a branch office established in Saudi Arabia and the parent company takes on full liability of the office’s actions.
  • Joint stock company (JSC): is a company whose shares are divided into negotiable shares. The JSC will have a name that describes its purpose and will be managed by a board of directors, a minimum of 3 and a maximum of 11.