Mainland Company Registration in Saudi Arabia
Registering a mainland company in Saudi Arabia is an important step for businesses looking to gain full access to the Kingdom’s vast market. Unlike companies in special economic zones (SEZs), Mainland companies have the right to operate throughout Saudi Arabia. This opens up more opportunities, but also entails stricter requirements.
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 in Mainland Saudi Arabia is suitable for businesses aiming for a long-term presence in the region. Despite higher costs and complications, it opens access to key markets and government projects." Sergey Kovalkov, Head of International Practice инкорпораций
Registration procedure
On average, the stage of establishing a legal entity in Mainland Saudi Arabia takes 1-3 months. The process of registering and maintaining a business involves higher costs compared to SEZ and is not free of bureaucratic delays (especially in complex sectors).
Stage 1
Obtaining a MISA license
Remotely
An investment license from MISA allows foreign investors to own shares in a company and conduct business in Saudi Arabia.
The process involves submitting an application on the MISA online platform, document verification and approval.
Stage 2
Company name reservation
Remotely
Reservation of a unique company name through the Ministry of Commerce.
The company name must be unique and comply with local company name requirements.
Stage 3
Legalization of the company's articles of association and memorandum of association (MoA)
Remotely
Approval and notarization of the Articles of Association and Memorandum of Association.
Stage 4
Completion of the commercial registration process
Remotely
Final registration of the company with the Ministry of Commerce to obtain a commercial license.
After this, the company receives the official status of a legal entity and the right to conduct commercial activities.
Stage 5
Registration with the Chamber of Commerce
Remotely
Register your company with the Chamber of Commerce to gain membership and access to commercial opportunities.
Stage 6
Obtaining a company seal
Remotely
Stage 7
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 8
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 9
Registration of national address
Remotely
Required to receive all notices and legal correspondence.
Stage 10
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 11
Registration with Zakat Tax & Customs Authority
Remotely
Stage 12
Opening a corporate bank account
Remotely or in person, depends on the bank
Consequences of registration in Mainland
Tax liabilities
Filing tax returns (annually and quarterly); VAT compliance (accounting and tax refund)
Compliance with labor laws
Quota for hiring Saudi nationals (Nitaqat): from 5% to 30% depending on the size of the company.
Reporting
Financial statement audit (for LLCs with a turnover of 1 million SAR).
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