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How to establish a limited liability company in Saudi Arabia

limited liability company in saudi arabia

Establishing a new business is a complex step that requires good planning and good knowledge of the legal rules and regulations. In complying with the 2030 vision, Saudi Arabia has opened for a wide era of investments on its land with an environment that attracts investors from all over the world. A well common type of investments is the limited liability company. So what is the limited liability company, and how to establish a limited liability company? That’s what we are going to know in this article.

What is the limited liability company?

A limited liability company is a shape of companies between individual and joint stock companies, where partners in this company have a limited liability in the company debts and obligations limited to their shares only, and they are not personally responsible for them. In the limited liability companies, the capital is divided into shares representing the percent of every shareholder. Otherwise joint stock companies, shares of the limited liability companies are not freely traded, and their transfer needs the agreement of all partners.

How to establish a limited liability company in Saudi Arabia?

To establish a limited liability company, you need to follow a number of steps easily to register your limited liability company and get the required licenses to begin your company. The steps you need to follow to begin a limited liability company are as follows:

  • Issuance of the commercial register.
  • Issuance of the articles of incorporation.
  • Issuance of an immediate commercial license (optional).
  • Open an establishment file with the Ministry of Human Resources and Social Development.
  • Register for zakat through the electronic portal of the Zakat, Tax and Customs Authority.
  • Register the establishment with the General Organization for Social Insurance
  • Register with the national address at the Saudi Post.
  • Register in Chambers of Commerce by location.

You can do all the required steps for establishing a limited liability company in Saudi Arabia via the Saudi Business Center platform.

Required data to register a limited liability company in Saudi Arabia

Registering a limited liability company require gathering some data to complete registration and issuing process, these data could be mentioned as follows:

  • Data of the shareholders.
  • Data of the company.
  • Company management data.
  • Company contract data.
  • Commercial registry data.
  • A license from the Central Bank of Saudi Arabia, if it is required by the performed activity.
  • Presence of the legal documents in case that one of the partners is a charity organisation, a government agency, or a civil institution.
  • The approval of the ministry of commerce on the Articles of association.
  • Obtain a foreign investment license in case there is foreign investments.
  • Opening a bank account and depositing the initial capital.
  • Obtain necessary licenses depending on your industry.

What are the conditions required for establishing a limited liability company in Saudi Arabia?

Establishing a limited liability company in Saudi Arabia has some conditions regulating this process. These conditions are as follows:

  • Partners need to be not employed by the government.
  • The commercial registration needs not to be canceled, suspended or terminated, if one of the partners is a corporate partner.
  • If the company capacity is professional you need to verify the following:
    • The presence of a valid professional license for the partners.
    • Make sure that the share of the licensed Saudi partner is not less than 25% if the company is a mixed company.
    • The percentage of licensed partners should not be less than 70%.

Main points in the establishment of a limited liability company in Saudi Arabia

To establish a limited liability company in Saudi Arabia, you need to keep in mind that you need to fulfil the following points:

  • The number of shareholders may vary between 1 to 50.
  • You need to get one manager who can be one of the shareholders or not.
  • You need to be aware of the capital requirements in case the company is 100 % foreign investors.
  • Do not forget to prepare a bank certificate after depositing the capital.
  • You need to prepare copies of the valid identifications for all partners to be used in the different steps.

Mousa & Partners commercial law services

Mousa & partners office can help you with different commercial rules and regulations to begin your business smoothly, all you need is to contact our office, get your consultations and begin your business.

Mousa & partners offer company services package, as Mousa & partners can give you a lot of services in this field like transforming companies from limited liability companies to closed joint-stock companies and transforming companies from limited liability companies to publicly listed joint-stock companies

With Mousa & partners corporate Governance of Joint Stock Companies and Family Businesses, where you can find answers for your questions related to corporate governance of this type of business.

Commercial Mediation and Negotiation Services, where you can find partnership and investment mediation services that can help you with all legal issues related to these issues.

Common questions about a limited liability company in Saudi Arabia?

What is the difference between limited liability and joint stock companies?

The difference between limited liability and joint stock company exists in the following points:

  • Joint stock company is divided into equal shares which can be easily traded rather than a limited liability company which can be divided into not more than 50 shares, which can not be easily traded.
  • Joint stock companies require higher minimum capital to be established than limited liability companies.
  • Number of shareholders in the Joint stock companies can be unlimited, while in limited liability companies, shareholders could not exceed 50 shareholders.
  • Joint stock companies are usually a large business, while limited liability can be a small or medium sized business.

What are the advantages of registration of your limited liability company in Saudi Arabia?

There are a lot of advantages you can achieve through registering a limited liability company in Saudi Arabia as follows:

  • Easy establishment of the company through online registration.
  • Low minimum capital.
  • Easy managed companies.
  • Easy trade of shares in Saudi Arabia with the facilitations made by the Saudi government to facilitate investment in Saudi Arabia.
  • Investment in an encouraging environment with 2030 vision facilities that has been made by the Saudi government.

Start your business now and contact Mousa & partners office for all legal rules and regulations regarding your business in Saudi Arabia.

Reserve your free consultation with Mousa & partners legal office

Do you need to begin your business but you need to get a legal consultation ? Get a free consultation with a great legal team who can give you the best legal advice with the commercial law, to begin your business without any complications, and get the highest benefits from the encouraging investment climate in Saudi Arabia. Visit our website, and get your free consultation, with the best legal team.

Contact information for Mousa & partners legal office

Address: Floor H, Building 407, Zone 4, King Abdullah Financial District (KAFD), Riyadh, Saudi Arabia

Phone number: +966505898510

Email: info@mousalegal.com

Working time: everyday from 9 AM to 5 PM, except Saturday and Sunday from 10 AM to 6 PM.

Get the best consultation to establish your limited liability company with Mousa & partners legal office

Establishing a limited liability company can be a difficult situation to deal with laws and regulations in the Kingdom, but with our expert team your business can be a reality without any legal complications, contact us and consult our team.

Limited liability companies are a certain type of companies that can be established in Saudi Arabia with different advantages, mainly its low to middle minimum required capital. Get the advantages of the investment in Saudi Arabia, and establish your limited liability company. Consult your legal office now and establish a limited liability company in Saudi Arabia.

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