MISA typically will only consider a foreign business if it has: Profitable accounts- The company has an established track-record (minimum one year) and can demonstrate profitable, audited accounts in the last financial year.
Parent Company Trade License – MISA requires submission of the parent company trade license which should be legalised and attested in the home country, as well as submitting other documents such as Articles of Association (AoA). Appoint a General Manager- The business must also be willing and able to appoint an individual as General Manager who will obtain residency in Saudi to open/operate a Bank account, amongst other mandatory formalities.
1st Hire – The first hire after the GM must be a SaudiNational. Saudization is measured on a scale through the Nitaqat(Quota) rating system and business should be willing to embrace “Saudization”initiatives as bad Saudization scores have operational implications.
MISA generally requires foreign LLCs to have a minimum of SAR 500,000 share capital. Once the corporate bank account is open, the share capital will need to be deposited, it appears on the balance sheet of the business and can be used as working capital. For certain type sof activity, MISA prescribes differing minimum capital: Property investment projects – SAR30 million Contracting – SAR500,000 (other revenue/asset value requirements) Trading – SAR30 million LLCs must set aside minimum 10% net profits until the statutory reserve reaches 30% of the LLCs original capital. Rapid Formation can advise you further on permissible LLC activities as some activities still remain withSaudi Nationals only or require a Saudi partner/shareholder.
FreeZones or Economic Zones are still in the very early stages of development inKSA, but will be sector targeted when launched.
Key steps in the company formation process:
