Foundations of the legal entity Stage 1 involves making your company a legal entity in the Kingdom. It typically takes a month to complete this stage provided there are no major bottlenecks due to unforeseen or unavoidable delays. This stage entails the following steps:

Step 1 – Apply for MISA License 

The MISA Investor license gives you 100% foreign ownership of your entity and the ability to operate anywhere in the Kingdom. The type of license will depend on the economic activity of your business in KSA.
The cost of a MISA license for the first year is SAR 12,000 including the service fee. From the second year onward, the renewal fee for one MISA license is SAR 62,000. In case your activities fall under two license categories, your renewal fee gets multiplied by two, and so on.

Step 2 – Name reservation 

The new Saudi entity’s name must be in Arabic and must comply with local naming regulations which currently stipulate that MISA entities must be named using the foreign entity’s name, followed by “for” and the approved business activity.

Step 3 – Draft the local Articles of Association (AoA)

The drafted AoA of the local company is sent to the Ministry of Commerce for review, and upon their approval, it will be attested to serve as the main foundation of the legal entity in Saudi Arabia and the prerequisite to issuing the Commercial Registration. The person signing on the AoA must be authorized by the parent company through a Power of Attorney (PoA). Adding our colleagues’ names in the PoA will allow us to take care of this step for you without the presence of the GM.

Step 4 – Issuance of Commercial Registration (CR) 

This serves as the main document showing the registration number of the company, the dates, and the General Manager. The CR will also list the activities of the local company, which must fall under the same license type. This is your company’s most important document and is equivalent to a Trade License and Certificate of Incorporation in other countries. The CR also needs to be renewed annually and its annual renewal fee is SAR 1,200.

Step 5 – Registration with the Chamber of Commerce (CoC) 

The Chamber of Commerce (CoC) is a key platform that all local companies use heavily. Many of the government processes and papers require attestation from the Company’s Chamber of Commerce. Almost all of the Chamber of Commerce processes can be done online after the activation of the account. The CoC needs to be renewed annually for a fee of SAR 2,100.

Sub Stage 5 – Authorization to hire staff 

For your legal entity to be authorized to hire people, there are certain steps that must be taken, such as registration with the Ministry of Labor (MoL), and the General Organization of Social Insurance (GOSI). This stage would also allow your General Manager (GM) to have a one-time GM visa issued, allowing them to travel to KSA.

Step 6 – Activate Chamber of Commerce (CoC) account 

Almost all of the Chamber of Commerce processes can be done online after the activation of the account. The Chamber of Commerce account will be activated if it is signed by an authorized signatory who has a PoA from the parent company.

Step 7 – Register with The Ministry of Labor 

Registering with the Ministry of Labor (MoL) is required in order to be able to issue work permits and visas. Once the MoL account is activated, companies can see the Saudization quota needed to be fulfilled.

Step 8 – Register with General Organization for Social Issuance (GOSI) 

As a foreign company established in Saudi Arabia, you must comply with Saudization law as this is monitored by the General Organization for Social Insurance (GOSI) on a monthly basis. Generally, if you have 5 employees or less, you are only required to hire one Saudi national. Once you exceed 5 employees, you will have to follow the Saudization Nitaqat system based on your company size and industry. After getting your General Manager’s visa, and converting it to a residency (Iqama), you will not be able to hire any more non-Saudis before hiring at least 1 Saudi at any position the business sees fit.