The formation and operation of corporate entities in the Kingdom is regulated by the Companies Regulations (the “CR”) which came into effect on 2 May 2016.
The five forms of companies which can be established in the Kingdom are:
- Joint liability companies (the equivalent of general partnerships);
- Limited partnership companies (the equivalent of limited liability partnerships);
- Joint ventures;
- Joint stock companies (“JSCs”); and
- Limited liability companies (“LLCs”).
Our team represents a large number of multinational clients that are leaders in their respective fields.
We advise and assist clients on the establishment of operations in the KSA. This includes obtaining all necessary registrations, licenses, and approvals, as well as adhering to all legal requirements for their operations. Our team’s extensive experience in advising multinational clients find us in the unique position of being fluent in the intricacies and complexities of issues relevant to foreign investors interested in doing business in the KSA.
Our services include work relating to:
- Advising on the legal framework for the proposed business activity, as well as on the preferred vehicle or structure for the investment, including the establishment of branches, subsidiaries, representative offices, regional headquarters, regional operating headquarters, and other types of business vehicles.
- Advising on and obtaining special registrations for corporate entities to avail tax and other incentives under KSA law and compliance with the Saudi Companies Law which was enacted by Royal Decree No M3 dated 28/1/1437H (i.e. 10/11/2015G).
- Advising on, and obtaining, government approvals, permits, licenses, and registrations for the client's operations; preparing, negotiating, and reviewing contracts for various corporate and commercial transactions arising from the client's business.
- Advising on the KSA regulatory regime for a variety of corporate and commercial transactions with potential implications.
- Assist foreign investors to obtain an investment license from the Ministry of Investment of Saudi Arabian (“MISA”).
- Drafting policies, Charters, by-law for their corporations
Branches and TSOs
Foreign investors may establish branches and Technical and Scientific Offices (“TSO”) in the Kingdom. All branches and TSOs must be licenced by MISA.
Branches are considered an extension of the parent company. The main advantage of branches and TSOs is that they can be established relatively quickly compared to LLCs and JSCs.
- Can be used for a full range of activities permitted in the MISA license of the branch;
- Can engage in projects in both the public and private sector; and
- May promote and solicit its MISA-licensed business throughout the Kingdom.
TSOs do not have minimum capital requirements. A TSO cannot engage in commercial activities. Its activities are limited to providing technical information and assistance regarding the foreign company’s products to its Saudi distributor(s) and to end users of the products, studying and reporting on the market and conducting research.