We know that expatriates living in Saudi Arabia cannot operate a business legally unless they get a license from Saudi Arabian General Investment Authority (SAGIA). The law for foreign direct investment in Saudi Arabia has brought significant changes in the traditional sponsorship system in Saudi Arabia and new trends to the business environment in Saudi Arabia. The law for foreign direct investment was approved in April 2000 according to which foreign investment can have up to 100% shareholding in any business. Traditionally, only Saudis were able to start and conduct business in Saudi Arabia. Moreover, projects and companies which are 100% foreign owned can take loan from the commercial banks as well as Saudi Industrial Development Bank. In this article, I am going to share the detailed procedure to apply for SAGIA license in Saudi Arabia.
- Who can start business in Saudi Arabia? According to Article 1 of the foreign investment Act in Saudi Arabia, defines the investor in this way, “a Foreign Investor is a natural person who is not of Saudi nationality or a corporate person whose partners are not all Saudi”. It shows that Saudi National cannot start business in Saudi Arabia as foreign investor.
- Article 6 (3) of the Executive Rules of Foreign Investment Act explains “the license applicant should be a natural or nominal person who has come to the Kingdom for the purpose of investment”. It means that people who are already working in Saudi Arabia on worker’s visa can also not start business in Saudi Arabia under the category of foreign investment.
- Foreign investors can make
their plan to any sector they want except few sectors which are reserved for
Saudis and GCC nationals only. Recommended: List
of Businesses banned for SAGIA License (reserved for Saudis and GCC nationals)
- SAGIA has set the minimum capital requirement for each sector. It is important for you to know about it. Recommended: Minimum Capital Requirement for different types of SAGIA Licenses
- Foreign Investor also
needs to decide at this stage about the type of company he is going to
register. For example, Limited Liability Company, Joint Stock Company. Recommended: Selection
of Type of Company for the SAGIA License
- Foreign Investors must
make sure that they have selected the name of the company. Recommended: 11
SAGIA Rules to select the name of your Business
- After completing the investment license application form, it should be submitted for approval to the SAGIA. If this application is approved, a temporary investment license will be issued with the validity of 3 months. A permanent license will be issued once the entire registration process is completed.
Establishing Business in Saudi Arabia
- 11 SAGIA Rules to select the name of your Business
- Procedure to get Commercial Registration (CR) of the company in Saudi Arabia
- Minimum Capital Requirement for different types of SAGIA Licenses
- Selection of Type of Company for the SAGIA License
- List of Businesses banned for SAGIA License (reserved for Saudis and GCC nationals)