By Juan Lucia
Saudi Arabia is a perfect hub for new business ventures. It is regarded as the middle east’s largest economy. Worldwide business owners and investors are attracted to it. The Government is taking steps to make its turf more business-friendly to foreign investors. Even SMBs are encouraged to flourish in Saudi Arabia’s business environment.
If you are interested to launch a business in Saudi Arabia, then you will need to consult a reliable lawyer. ERLF is one of the best law firms in Riyadh. It has a good experience of 20 years in protecting their customer’s legal interests and goal achievement.
Important things to consider for startup business in Saudi Arabia
- Enthusiasm and planning – Familiarity with the region is necessary. Ready to perform wide research in your business niche. Have a practical business plan that includes market study, competition level, and predictions. Know from where to get the required investment, especially if you are new and have no track record. Prepare an appealing and credible plan, which can attract government or local support.
- Legal knowledge – The law needs a local partner that will hold major interest. Remember, the local partner will be in control of the business and have the right to close it, whenever he wants. The local partner can be an individual or a company. They don’t need to participate financially in the startup investment. Currently, the local partner needs are under review [to boost foreign investment].
- Company formation types – Business owners and investors can establish an SMLLC, JSC, LLC, and Foreign Company Branch in the Saudi Arabia Kingdom. Each business type has its perks and drawbacks, which you need to learn about to make an educated decision.
- Tax scenario – Taxation has two components – Zakat is a religious tax applicable to GCC or KSA [Kingdom of Saudi Arabia] nationals, whereas Income Tax is for foreign nationals. Personnel eligible for income tax include non-resident investors, non-resident people doing business in the Kingdom of Saudi Arabia, people who do business in the oil & petroleum industry, and resident companies without KSA shareholding.
- Capital – During registration, proof that you have sufficient investment to start a business needs to be shown to the Ministry of Commerce. The necessary amount differs from one state to another. The money is regarded as security against liabilities, which can be withdrawn shortly.
Foreign investment comes with inherent risk, so consult lawyers at Saudi company incorporation, right from the start. You will navigate smoothly through the registration complexities and even your business interest. It doesn’t mind whether you start a small shop or a large corporation. Just like in any other country, there are unofficial businesses that operate in the region. You need to stay prepared legally, if anything goes in a bad direction like getting ripped-off.
Many businesses have developed in Saudi Arabia with the support of the authorities, especially for business setup in free trade zones. The Jazan Economic City, Prince Abdul-Aziz Bin Mousaed Economic City, and King Abdullah Economic City is exempted from commercial taxes, import & export duties, land tax, building & property license charges, etc. Doing business with Arab men is likely to be friendly and pleasant. They are completely committed!
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