Need an Office Space For Business in Saudi Arabia?

The procedures for setting up an office space for business in Saudi Arabia vary depending on the type of activity being undertaken. To find an office space for business in Saudi Arabia, a foreign company must submit to the Ministry of Commerce and Investment a copy of the statute registered in the country of origin; a copy of his commercial registration; written approval of the board of directors of the company, its chief executive officer/president or similar organization regarding their decision to open a subsidiary office; the name of the city where the office will be established; and the name of the subsidiary manager.

All documents must be certified by the Embassy of Saudi Arabia. The most common and straightforward method is to simply appoint an agent/distributor who can set up an office under their own commercial registry. The agent/distributor agreement must be registered with the Ministry of Trade and Investment. Commercial agency regulations govern the behavior of the agent/distributor.

Types of offices:

Technical and Scientific Office:

This type of office requires a license from the Ministry of Trade and Investment. This approach preserves the independence and identity of the foreign company and provides more freedom to manage and market the company’s products and/or services. Technical and scientific services are not allowed to engage in direct or indirect business activities in office spaces in Saudi Arabia, but they can provide technical and advisory support to Saudi distributors, as well as to conduct market research and product research.

Branch Office:

Saudi Arabia’s foreign investment law allows international companies to own 100 percent of the projects and property needed for the project itself, allowing them to retain the same incentives provided to national companies. The affiliate assumes a more immediate presence than a commercial agent. Affiliates are largely restricted to administrative roles and may not engage in trading activities.

Liaison Office:

The establishment of a liaison office is generally provided only to companies that have several contracts with the government and require the local office to monitor the performance of contracts. Representative offices are not allowed to engage in direct or indirect business activities in the Kingdom.

Joint Venture:

A company may establish a joint venture with a legally incorporated Saudi firm. Usually, the Saudi business community refers to limited liability companies as joint ventures. These companies must also be registered with the Ministry of Trade and Investment, and the obligations of the partners are limited by the amount of their investment in the company.

Finally, foreign companies can obtain a license from the Saudi Arabian Investment Authority (SAGIA) to set up an office space for business in saudi for industrial or non-industrial projects . SAGIA will license projects under the new Foreign Investment Act, which provides for 100 percent foreign ownership. In addition, foreign investors can open a sales/administration/marketing department to complement their industrial or non-industrial projects. SAGIA has a broad mandate on all issues related to foreign investment in industry, services, agriculture, and contracts.

The Saudi Companies Act, which came into force in 2016, is the main legislative body regulating the behavior of companies in the Kingdom. The law recognizes eight forms of companies. The most common forms are limited liability companies (LLCs), joint-stock companies, general partnerships, and limited liability companies.

Less common forms of company are limited partnerships and joint ventures.

In addition to the above, the Sharia Law defines several other types of companies that cannot be used by foreign investors. In practice, foreign companies usually set up an LLC.

LLC is a popular corporate tool for foreign investors in Saudi Arabia, as it is easy to install and administer, and the personal liability of each partner is limited by the individual partner’s contribution to the company’s capital.