Saudi Arabia

Expand Business in the Saudi Arabia

Global Upside helps you expand business in the Saudi Arabia by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Saudi Arabia’s laws and regulations.

The hiring and incorporation processes in the Saudi Arabia are often complex, time-consuming, and involve numerous legal and compliance challenges. Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in the Saudi Arabia. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Riyadh

Currency

Saudi Riyal (SAR)

Language

Arabic

Government

Absolute Monarchy

Country Overview

The Kingdom of Saudi Arabia is the largest nation in the Arabian Peninsula and has a free market economy. The country has developed from being an agricultural nation into a global economic power amidst modern infrastructure.

  • Saudi Arabia is one of the richest Arab countries and the largest economy in the Middle East.
  • The major export products of Saudi Arabia are petroleum products, petrochemical products like propylene, ethylene, etc.
  • Import items consist of machinery and electrical equipment, automobile, chemical, and metal products.

The most common forms of legal business entities in Saudi Arabia are:

Limited Liability Company (LLC)

Limited Liability Company (LLC) is the most common and well-known form of a corporate vehicle among foreign shareholders in Saudi Arabia. The liability for each of the investors is limited to the specific associate’s benefaction to the firm’s share capital.

Joint Stock Company (JSC)

Joint Stock Company (JSC) is a form of establishment that requires a minimum of two investors and three directors. In addition to this, this form of a legal entity setup needs to have an auditor who will be in charge of providing all financial reports of the firm, every year. The minimum share capital required is SAR 500,000.

Limited Partnership

Limited Partnership needs at least one director and two partners and one managing partner and one limited partner. There is no minimum capital required to register the business in a limited partnership.

Branch Office (BO)

Branch Office (BO) is a form of establishment where businesses can enroll an exclusively foreign-owned Saudi Branch office after obtaining the obligatory authorization. This kind of entity can promote and solicit business throughout Saudi Arabia and work in both the public and private sectors. The minimum share capital required is SAR 500,000 which needs to be deposited with a local bank.

It takes a minimum of 2 to 4 weeks to incorporate a legal establishment in Saudi Arabia.

As per the Labor Law, it is mandatory to provide an employee with a written employment contract which has to consist of the following:

  • The name of the employer and employee
  • Job description
  • Job location
  • Employee’s nationality
  • Remuneration
  • Start date
  • Contract duration (if fixed)

Employees are entitled to nine paid holidays annually, the dates of some of which vary year to year:

  • Eid Al-Fitr: (date varies), lasts 10 days, but most employers observe only three
  • Sept. 23: Saudi National Day
  • Eid Al-Adha (date varies), lasts 10 days, but most employers observe only five

There is no fixed payroll cycle here. That said, an employee is usually paid either on a weekly or monthly basis. Whilst it is not mandatory, but it is customary to give the employees a 13th-month salary before Eid al-Fitr.

The accounting standards used in Saudi Arabia are issued by the Saudi Organization for Certified Public Accountants (SOCPA) and are completely in compliance with the IFRS.

Corporate Tax

The corporate tax rate in Saudi Arabia is 20%.

Value Added Tax (VAT)

VAT levied here is 5%.

At present, there is no dedicated data protection law that is in force in the Kingdom of Saudi Arabia (KSA). However, the Shari’a principles usually protect the privacy and personal data of employees.

Anti-Bribery & Anti-Corruption Law

In Saudi Arabia, the bribery of public officials is forbidden by the Regulations for Combating Bribery, which is issued under the Royal Decree M/36 dated 29/12/1412H, conforming to 27/6/1992G of the Bribery Regulations. Military officers and public servants are also prohibited from misusing their influence or positions under the Military Officers Regulations and the Civil Service Regulations, respectively. However, unlike the Bribery Regulations, these protocols do not levy any disadvantages on anyone excluding the officers and public servants.

1. Bribery of Public Officials

For Individuals:

  • Imprisonment for up to 10 years.
  • A fine up to SAR 1 million.

For legal entities:

  • 10 times the bribe value.
  • Expelling from participating in any government project.
2. Bribery of Private Officials

For Individuals:

  • Imprisonment for up to 10 years.
  • A fine of up to SAR 1 million.

For legal entities:

  • 10 times the bribe value.
  • Expelling from participating in any government project.