How to Start a Business in Saudi Arabia for Foreigners in 2024?
If you’re wondering how to start a business in Saudi Arabia for foreigners in 2024, and you wish to run your own business without being tied to a sponsor, you can directly contract with the government to operate your business. To initiate this process, the Saudi government has established four fundamental conditions. By meeting these four essential requirements, you can commence your business venture in Saudi Arabia.
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Tax Obligation:
The first condition pertains to the taxes you’ve paid in your home country for your business. You must provide evidence of having paid taxes on your business for at least one year prior to expanding it into Saudi Arabia. This serves as the initial prerequisite.
Capital Requirement:
The second requirement does not insist on having 30 million riyals as a fixed capital amount. You must be the proprietor of your business, but the capital requirement depends on the size and nature of your enterprise. If you have investments in other countries, you’ll need to disclose the total worth of these investments, including factories and businesses. The minimum total worth should be at least 30 million riyals.
International Presence:
The third condition stipulates that your business, which you intend to operate, should be active in a minimum of three international or regional areas, either in your home country or other nations. You must present evidence of operating at least three businesses in these areas, whether within your home country or across three different international locations.
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Previous Business Ventures:
The fourth requirement is associated with any prior business ventures you may have had in Saudi Arabia. If you previously engaged in business in Saudi Arabia and were a partner with someone, you need to provide evidence and clarity regarding your previous business activities in Saudi Arabia. Many foreigners find themselves in trouble when they engage in illegal business practices under the sponsorship of Saudi individuals, which is against the law.
Your previous business activities in Saudi Arabia should not be under the name of a sponsor. Even if you have a large-scale enterprise, it will not qualify, as you cannot prove that it’s your business. Before we delve into the fifth condition, these initial four conditions are the most crucial.
Product Manufacturing and Research:
The fifth condition mandates that if you import products from outside Saudi Arabia and sell them within the country, at least 30% of the product must be manufactured in Saudi Arabia. The remaining 70% can be imported from other countries. Additionally, you must allocate 5% of your business expenditures to research and development. You’ll be required to establish a separate company dedicated to research and development. Information about the advantages of this company will be disclosed later, as it’s currently undisclosed.
Fees and Renewals:
The final condition entails an initial approval fee when you first apply to open your business, which amounts to 10,000 riyals. This fee is a one-time expense for the initial approval. Subsequently, you’ll need to renew your business license annually and pay an annual fee based on your business’s capital. Whether you plan to launch a small or large business in Saudi Arabia, these are all the requirements and conditions I’ve elaborated upon. I trust that this information proves beneficial to you in your endeavor and you know How to Start a Business in Saudi Arabia for Foreigners in 2024. visit Ministry of Commerce of KSA for more information.
