Launched in 2000 by the government of Saudi Arabia, the Saudi Arabian General Investment Authority (SAGIA) is the country’s foreign investment license provider.
SAGIA was established to provide quick and smooth company registration, investment application and business setup in Saudi Arabia with an assured verdict for foreign investment application within 30 days of submission to SAGIA.
There are various incentives in SAGIA company formation in Saudi Arabia. They are classified into regulatory and financial incentives.
Regulatory Incentives – Business Setup in Saudi Arabia
The Saudi government introduced significant regulatory incentives along with the new Foreign Investment Law. They include:
- Accelerated business setup, investment application and company registration process.
- Transferring / allocation companies’ shares between shareholders are
- Minimum capital is not a requirement for Limited Liability Companies (LLCs).
- Direct property ownership for the registered company including allocation of residence and employees.
- Foreign investors will also benefit from the guarantees and incentives that Saudi national investors receive.
- Eligible to request loans from the Saudi Industrial Development Fund.
- Profit and capital can be transferred
- The registered company sponsors the employees and its investors (non-Saudi nationals).
Financial Incentives – Business Setup in Saudi Arabia
Here are the financial incentives introduced by the Saudi government:
- No personal income tax
- Benefit from collateral and agreements regarding investment and taxation with other countries.
- 20% tax from total companies’ profits
- Losses can be transferred for forthcoming years in regards to taxes.
- Competitive utility rates for industries, including power, water and land.
- Foreign investors have access to various financial programs, including, Saudi Industrial Development Fund, Arab Trade Financing Program, Arab Monetary Fund, Islamic Development Bank, Arab Fund for Economic and Social Development (AFESD), Inter-Arab Investment Guarantee Corporation.
Tax Incentives – Business Setup in Saudi Arabia
- 50% reduction of tax from annual expenditures for recruiting and training Saudi nationals.
- 50% reduction of tax from annual incomes of Saudi nationals
- Reduction of tax for industrial projects in certain areas where non-Saudi nationals’ share in capital does not exceed 15%.