To start a business in Saudi Arabia, it is essential to understand the different legal requirements and factors of each type of entity. Each company has different requirements and tax implications. For instance, foreign investors who wish to start a business in Saudi Arabia are required to obtain a foreign investment license as a pre-requirement to invest.
The Regulatory Framework and Companies Forms
Saudi Companies Law provides the regulatory framework and governance of all business entities and its related activities in Saudi Arabia. This section presents different laws related to forming new companies in the Kingdom of Saudi Arabia and the regulatory framework of each business type, including foreign business entities and investments.
Companies Formation Under Saudi Companies Law
Saudi Companies Law provides the regulatory framework and governance of all business entities and its related activities in Saudi Arabia. This section presents different laws related to forming new companies in the Kingdom of Saudi Arabia and the regulatory framework of each business type, including foreign business entities and investments.
- General Partnership
- Limited Partnership
- Simplified Joint-Stock Company
- Joint-Stock Company
- Limited Liability Company
General Partnership
A general partnership is a company incorporated by two or more (natural or A legal) persons who are jointly and personally liable for the company's debts and liabilities.
Limited Partnership
A limited partnership is a company that consists of two groups of partners, a group that includes at least one (natural or legal) partner who shall be jointly and personally liable for the company's debts and liabilities, and a group that includes at least one limited (natural or legal) partner who shall not be liable for the company's debts and liabilities except to the extent of his interests in the company's capital.
Joint-Stock Company
A joint-stock company is a company incorporated by at least one (natural or legal) person and its capital is divided into tradable shares. The company shall be solely liable for the debts and liabilities arising from its activities, whereas the liability of the shareholders is limited to paying the value of the subscribed shares.
Simplified Joint-Stock Company
A simplified joint-stock company is not defined by the Companies Law; however, its characteristics are specified. It is similar to the Joint-Stock Company with less restrictions, such as waiving the minimum capital requirement and reducing requirements related to the management of the company.
Limited Liability Company
A limited liability company is a company incorporated by at least one (natural or legal) person. The company shall be solely liable for its incurred debts and liabilities as well as any debts and liabilities arising from its activities, whereas the liability of the company's owner and partners is limited in proportion to their interests in the capital.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
