Company Formation in Saudi Arabia self

Company Formation in Saudi Arabia

Establishing a corporation in Saudi Arabia entails adhering to numerous rules and laws, particularly as a foreign investor. As a result, the simplest choice is to purchase an already registered business through which activities may begin sooner rather than later.

Such businesses, known as shelf firms, may be found in most nations throughout the world, which is why they can also be purchased in Saudi Arabia. 

Our Saudi Arabia business formation experts explain how to acquire a shelf company and its benefits below. However, if you decide that forming a new business is the best option for you, we can assist you with the process.

The basic features of the Saudi shelf company

A shelf business differs from a new company in Saudi Arabia in that the former is already registered and can be purchased as such. This indicates that it includes:

A business name, which is required for doing business in Saudi Arabia;

a registered address, which is required for every local business; constitutive papers – the Memorandum and Articles of Association; shareholders and directors, as required by Company Law; a bank account as well as a tax identification number.

Recent legislative changes include the implementation of the value added tax, which is why some of these companies may get VAT numbers. These numbers must be obtained from the Saudi Tax Authority.

So, the biggest advantage of purchasing a shelf business in Saudi Arabia is that it contains everything necessary to begin any operation as soon as possible.

Even though they offer a possibility, they are not widely used in this nation since the purchasing process is complicated. This occurs because the SAGIA license demands various quantities of money as share capital from overseas investors. The process of getting such a license is time-consuming.

A Saudi shelf company's advantage versus a fresh entity

The buyer may pick between companies of various ages, which is perhaps the most crucial advantage of purchasing a ready-made corporation. This can have an influence on the ability to obtain funding from Saudi banks, as well as boost confidence among potential clients and business partners.

The buying procedure, on the other hand, may be more onerous than the registration of a new organization.

Whatever you decide, do not hesitate to contact our company registration professionals in Saudi Arabia, who can advise you on the best ways to start a business here.

How to Purchase a Saudi Shelf Company

The processes to purchasing an existing Saudi firm are not difficult; nevertheless, the total process may take longer than creating a new company.

Foreign investors who want to own shelf firms in the United States need complete the following:

Look for service providers who are selling such entities.

Choose the legal entity that best meets their demands and contact the vendor for confirmation of the company's availability.

Set a date to meet with the seller to sign the sale-purchase documents;

Take over the business, make the required adjustments, and register them with the Trade Register.

Amendments must be made following the purchase of a shelf firm in Saudi Arabia

The first and most crucial adjustment that must be made after acquiring a Saudi aging firm is the name of the shareholder and director. The legal address and name of the firm can then be changed. When changing the trading name, keep in mind that the firm will need to open a new bank account under the new name.

These changes will necessitate changes to the company's statutory papers as well as filing to the Companies Register.

Taxes to consider as a Saudi company owner

Taxes to consider as a Saudi company owner

The following are the key taxes that Saudi firms must consider:

the corporation tax, which is charged at a 20% rate on foreign investors;

The capital gains tax is applied at the same 20% rate;

the value added tax, which will be 15 percent beginning in 2020.