Saudi British Joint Business Council and Othman Altamimi & Co. Joint Paper
Introduction – Understanding Businesses Establishment in Saudi Arabia
Saudi Arabia has implemented significant reforms to make business establishment easier, attracting both local and foreign investors. These changes align with the Kingdom’s Vision 2030, which seeks to diversify its economy and enhance its business environment. With efforts to streamline procedures and encourage international investment, the country is becoming an increasingly popular location for businesses looking to expand or relocate their headquarters.
- Streamlined Business Setup Process
The process of establishing a business in Saudi Arabia has been significantly simplified. Previously, businesses faced lengthy procedures, but now, investors can obtain a business license in as little as 10 days, with operations becoming fully functional in less than 2 months. The use of digital dashboards for real-time progress tracking has improved transparency and efficiency, allowing businesses to get up and running quickly.
- Foreign Ownership and Investment
One of the most significant reforms is the relaxation of foreign ownership laws. Foreign investors can now establish businesses with 100% foreign ownership in sectors like retail, manufacturing, and services, without needing a local partner. This has opened the door for international companies, including multinational corporations relocating their headquarters to Saudi Arabia to take advantage of its growing market and strategic location.
- Legal Framework and Tax Incentives
Saudi Arabia has also modernized its legal system with new Saudi Companies Law options, such as the Limited Liability Company (LLC) and Simplified Joint Stock Company (SJSC), providing greater flexibility for business operations. Moreover, financial incentives like tax exemptions and VAT registration simplify tax compliance, encouraging investment in various sectors, including technology and renewable energy.
- Investment License and Sector-Specific Requirements
To establish a business, entrepreneurs must obtain an investment license from the Ministry of Investment (MISA), which varies by sector. Popular investment sectors include technology (including Semiconductors design and manufacturing), healthcare, Mining and manufacturing. The Saudi government has also established Special Economic Zones (SEZs) offering tax breaks and reduced regulatory barriers to encourage business growth.
- Labor Market and Saudization
The Saudization program remains a key aspect of the labor market, requiring companies to hire a percentage of Saudi nationals. However, recent reforms have made it easier for businesses to meet these requirements while still hiring skilled foreign labor, especially through the Premium Residency Card initiative, which offers permanent residency to qualified foreign workers in different categories.
Conclusion
Saudi Arabia’s reforms to simplify business setup, relax foreign ownership laws, and offer financial incentives are making it an attractive destination for companies, including those considering relocating their headquarters. With a more transparent and efficient regulatory framework, foreign investors are now better positioned to enter and thrive in the Saudi market, contributing to the country’s economic diversification goals under Vision 2030.
SBJBC Contacts
Email – techhub@sbjbc.org
Website – https://www.sbjbc.org/
Contact Details for Othman Altamimi & Co.
Website: https://otamimi.com/
Email: info@otamimi.com
