The Saudi joint stock company or public limited liability company is a business form that favors large business operations, as it allows multiple shareholders to own shares in it. Two types of such entities can be set up in this country, and our Saudi company formation specialists will explain the requirements and registration steps for them. We can also help you incorporate such a legal form if you are interested in it.
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Steps to open a joint stock company in Saudi Arabia
Here are the main steps for setting up a Saudi joint stock company:
- choosing and reserving a company name;
- drafting the Articles of Association;
- gathering all other relevant documents for company registration in Saudi Arabia (shareholders’ and managers’ details, proof of legal address);
- filing the paperwork with the Commercial Register;
- opening a corporate bank account;
- applying for a tax identification code;
- registering for employment purposes (if the company will hire employees).
Please note that if you are a foreign investor, you need to complete a few additional steps. They include obtaining a Saudi Iqama for you, if you want to relocate here, and filing for a MISA license (an authorization from the Ministry of Investment), which is the former SAGIA business permit.
If you want to open such a company in Saudi Arabia, you can rely on our local agents for support in preparing the necessary documents, as well as for filing for the MISA license. Please note that this authorization must be obtained prior to incorporating the joint stock company in Saudi Arabia.
Features of a Saudi joint stock company
Before covering the characteristics of this legal form, it is important to note that you can choose between two types of joint stock companies in Saudi Arabia:
- the closed company which will not be listed on the Stock Exchange;
- the public company that can be listed on the stock markets.
The latter is subject to more stringent registration and licensing criteria.
Returning to their features, here is what you need to know if you want to open a joint stock company in Saudi Arabia:
- the simplified or closed company can have at least 1 shareholder if it is owned by a governmental authority or its minimum capital exceeds SAR 5 million, otherwise, the minimum number required is 2;
- the law does not provide for a minimum or maximum number of directors in the case of the simplified form of this business;
- for a public company, the minimum number of directors is 3.
When it comes to the minimum share capital requirements, here are the most important facts to consider:
- the minimum share capital for a foreign-owned joint stock company is SAR500,000;
- if the company engages in property management activities, the minimum capital to deposit is SAR300 million;
- a business undertaking commercial activities must submit proof of a minimum capital of SAR300 million, plus a commitment to invest another SAR200 million over a period of 5 years (if the joint stock company is fully foreign-owned).
If you want to set up a joint stock company in Saudi Arabia, you must deposit at least 25% of the capital upon incorporation. The remaining amount will be completed over the next 5 years.
Apart from the registration requisites, you must also consider the compliance requirements applicable. Some of them are related to taxation and can be explained by our Saudi accountants.
In our team, you will also find our lawyers who can help you with other matters, such as immigration to Saudi Arabia.
For support in opening a joint stock company in Saudi Arabia, please contact our local consultants.