Company Registration in SEZ Saudi Arabia
Free economic zones (SEZs) in Saudi Arabia are part of the Vision 2030 strategy aimed at diversification and stimulating private sector growth.
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In 2023, Saudi Arabia launched four SEZs that offer:
- 5% income tax for 20 years.
- 0% tax at source.
- 100% foreign ownership.
- Simplified customs procedures.
The selection of an SEZ should be based on a thorough analysis of the advantages and limitations of each zone, as well as on the business plan and specifics of the company's activities.
Mainland and SEZ in Saudi Arabia: Key Differences
Foreign ownership
- Mainland. Up to 75% for LLC; 100% only for some sectors under MISA license
- SEZ. 100% allowed
Taxes
- Mainland. Standard rates: corporate tax 20%, VAT 15%
- SEZ. Benefits: 0-5% corporate tax, customs duties waived, VAT 0% on exports
Capital
- Mainland. Higher (e.g. from 500,000 SAR for LLC)
- SEZ. Minimum capital is lower or absent
Bureaucratic nuances
- Mainland. The process is more complicated and longer (2-6 months)
- SEZ. The process is simpler (3-6 months)
Localization
- Mainland. Saudiization hiring requirements (e.g. quotas for citizens)
- SEZ. There are benefits for Saudization in the SEZ. The first 5 years do not need to hire Saudi citizens, and from 6 to 10 years - 15% Saudi employees
Standard customs duties
- Mainland. Standard Customs Duties
- SEZ. Duty-free import/export for business in SEZ
Activity
- Mainland. Wider, but with restrictions for foreigners
- SEZ: Limited to permitted sectors (manufacturing, logistics and cloud computing)
Registration procedure
On average, the stage of establishing a legal entity in SEZ Saudi Arabia takes from 3 to 6 months depending on the scale of the business.
Stage 1
Communication with SEZ administration
Remotely
The company expresses a desire to register within any SEZ. Within this framework, communication takes place between the company's representatives and the SEZ administration. The company prepares a package of documents and information for consideration by the SEZ. It is necessary to provide a business plan, a description of the activities and financial forecasts.
Stage 2
Obtaining SEZ consent for the company to be registered
Remotely
The SEZ administration reviews the company's case and makes a decision on registration or refusal of further registration within this SEZ.
Stage 3
Company registration
Remotely
Interaction with the SEZ administration and the Economic Cities and Special Zones Authority (ECZA) in the context of company registration and issuance of constituent documents.
Stage 4
Obtaining licenses
Remotely
Obtaining a commercial license that allows activities within the SEZ. Licenses can be issued for manufacturing, trade, services or other activities.
Stage 5
Registration with the Ministry of Labor
Remotely
Registration to obtain the right to hire employees and comply with the requirements of the Saudization program (Nitaqat).
Stage 6
Registration with the General Organization for Social Insurance
Remotely
Registration with GOSI is necessary to manage employee social contributions and to meet the requirements of the Nitaqat program.
Stage 7
CEO Visa and Residence Permit through the Ministry of Labor and MISA
In person
The CEO must be present in Saudi Arabia to undergo medical examination.
Stage 8
Opening a corporate bank account
Remotely or in person, depends on the bank
Stage 9
Registration with Zakat Tax & Customs Authority
Remotely
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