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Open a Foundation in Saudi Arabia

Open a Foundation in Saudi Arabia

Local and foreign investors who want to open a foundation in Saudi Arabia must comply with the requirements of the new Company Act which provides for the creation of non-profit companies (NPCs) and non-profit organizations (NPOs).

If you want to set up a foundation in Saudi Arabia and need assistance, our local specialists can assist you.

Requirements for the creation of a foundation in Saudi Arabia

Here are the main conditions for setting up a non-profit company in Saudi Arabia:

  • the entity must be established by one or more participants who can be natural persons or companies;
  • its purpose must be not to obtain profit on behalf of the founder(s);
  • it must be created with the purpose of serving public or private interests;
  • it will receive funds from the participants or from donations, the payment of the Zakat tax, endowments, or investment returns.

Our accountants in Saudi Arabia can offer all the necessary details about the Zakat tax.

Another condition to establish a Saudi foundation is for the founders to be Saudi nationals or locally registered companies. If you decide on the second option (which is also available for foreign citizens), you can rely on us for company formation services in Saudi Arabia.

Documents required to open a foundation in Saudi Arabia

Here is a list of the papers required to set up a Saudi non-profit company:

  • the foundation’s bylaws;
  • the Certificate of Incorporation, business license, or endowment documents if the founder is a company;
  • identification papers of the founder or founders in the case of Saudi citizens;
  • the resolution establishing the creation of the foundation in Saudi Arabia;
  • the application form issued by the National Center for Non-Profit Sector (NCNPS).

The National Center for Non-Profit Sector (NCNPS) is the main body regulating and overseeing the activities of NPOs in Saudi Arabia.

It is also possible to register a Saudi foundation through proxy. In this case, the representative’s details must be filed alongside the documents mentioned above. Our local consultants provide PRO services to those interested in setting up NPCs and who need an external agent to represent them.

Types of Saudi foundations according to the NCNPS

When opening a foundation in Saudi Arabia, the founder can choose between its two forms, as established by the NCNPS:

  • public;
  • private.

Public NPOs are registered as joint stock companies and have as a main purpose serving social causes. They are not allowed to make profits for the shareholders.

Private NPCs can be registered as private or public companies with the purpose of serving various causes, including private ones. A main condition to open a private foundation in Saudi Arabia is for the founders to appoint a trustee committee which must be formed of at least 3 trustees. The shareholders must inform the NCNPS about the formation of the committee in a maximum period of 15 days from the nomination of the trustees.

Our company registration agents in Saudi Arabia can advise on the conditions of creating public and private NPOs.

How many foundations operate in Saudi Arabia?

According to the latest information:

  • the number of charities in Saudi Arabia was below 1,000 in the past few years;
  • however, according to the Government’s Vision 2030 plan, such organizations must contribute at least 5% to the country’s economy in the future;
  • currently, it takes between 1 and 2 months to set up a foundation in Saudi Arabia.

Our local specialists are also at the service of foreign nationals with various solutions, among which support in immigration to Saudi Arabia. For this purpose, we can assist with filing for the Saudi Iqama.

If you want to open a foundation in Saudi Arabia, please contact us for support.