AstroLabs has been helping set up 400+ companies from around the world in the UAE and Saudi Arabia.
It has just launched www.setupinsaudi.com, the first comprehensive online resource on how to expand into Saudi Arabia.
Saudi expansion made easy
Setupinsaudi.com includes the full 16-step setup process with detailed requirements for establishing a 100% foreign-owned entity in the Kingdom of Saudi Arabia.
AstroLabs has assisted 60 companies, valued at over $5 billion, with their entry into the Saudi market. These include Checkout.com, one of the most valuable global fintech businesses, Bayut, the UAE’s largest online property portal, and AKQA.
The first centralized online resource Setupinsaudi.com lists detailed information on requirements and offers a dedicated specialized operations team in Riyadh to manage end-to-end processes for businesses, making their expansion journey seamless and hassle-free.
In 2018, AstroLabs solidified a partnership with Saudi Arabia’s Ministry of Investment (previously SAGIA), when they signed a cooperation agreement that made them a partner of choice to support businesses expanding into the Kingdom.
Having a physical address is one of the requirements for setting up or expanding a business into Saudi Arabia and AstroLabs offers a complete soft-landing package, with a physical address and dedicated working space in its Riyadh coworking facility.
“Setupinsaudi.com helps simplify the complex business establishment process by making the setup and licensing information accessible in one, easy-to-navigate online space along with support from specialized market experts,” said Muhammed Mekki, Founding Partner of AstroLabs.
Important business information to know in Saudi
According to PricewaterhouseCoopers (PwC):
1. The Saudi Bankruptcy Law, issued in 2018, is detailed and establishes a framework of protection against bankruptcy for individuals, tradesmen, and foreign and local companies. The law aims to help a bankrupt debtor reorganize its financial position and resume activities.
2. The “Negative List” relates to a group of sectors that foreign entities cannot invest within. Following a review by the Council of Ministers in 2018, the following sectors have now been removed from the Negative List, and can now attract foreign investment:
• Road transport
• Real estate brokerage
• Audiovisual services
• Recruitment and related services
3. There are five common strategies adopted by foreign investors looking to undertake business/commercial activities in KSA:
A. Fly in fly out/trade from overseas
B. Conduct business through an agent/distributor
C. Set up a local entity
D. Establish a joint venture (JV)
E. Acquire an existing local entity
4. Obtaining iqamas for expatriates can be a time-consuming process that requires numerous documents and should be considered early in any business planning.
5. Any employment contract shall be terminated in the following cases:
• If both parties agree to terminate it, provided that the employee’s consent be in writing
• If the term specified in the contract expires, unless the contract has been explicitly renewed
• The employee attains the age of retirement unless the two parties agree on continuing employment
• Force majeure
6. The government authority that administers and collects Zakat and tax liabilities is the General Authority for Zakat and Tax (GAZT). There are two main types of taxes/levies in KSA, Zakat which is based on Islamic concepts, and corporate income tax. Zakat is applicable to ownership in a KSA company by KSA nationals or other GCC country nationals. Zakat is a religious levy and is assessed at 2.57% on the Saudi/GCC shareholders’ (i) share of the Saudi resident entity’s “net assessable funds”, which include their share of adjusted profit for the year; or (ii) at 2.5% on the share of adjusted profit for the year, whichever is higher.
Corporate income tax at 20% is applied to the (i) non-Saudi/non-GCC share of the tax base (gross income less tax-deductible expenses) in a resident capital company (e.g. a Limited Liability Company or Joint Stock Company); and (ii) a non-resident, which carries on business in Saudi Arabia through a Permanent Establishment (PE)
More ease of doing business
Saudi has made it significantly easier to set up a business.
Companies seeking to expand into Saudi Arabia are able to get their investment license without having to attest the documents.
Under the temporary new rules due to the Kingdom’s economic stimulus packages, the process of attesting documents, necessary to set up a business, now takes a matter of days rather than months.
The previous process of attestation could cost anywhere up to around 20,000 riyals ($5,333) and businesses can save this money by applying under the current measures.