SharkBX Guide to Setting Up a Consultancy Company in Saudi Arabia
Introduction
Welcome to the SharkBX Guide on establishing a consultancy company for practicing professional activities in Saudi Arabia. At SharkBX, we specialize in providing comprehensive business consultancy services to help you navigate the complexities of setting up and managing a consultancy firm in the Kingdom of Saudi Arabia. This guide offers a detailed overview of the requirements, processes, and benefits associated with starting a consultancy company, emphasizing the importance of professional assistance to ensure a smooth and compliant setup.
Encouraging Consultancy Formation in Saudi Arabia
Saudi Arabia’s Vision 2030 initiative aims to diversify the economy, attract foreign investments, and foster a business-friendly environment. Establishing a consultancy company in Saudi Arabia aligns with these goals, offering significant opportunities for growth and expansion. The government actively encourages consultancy formation by providing various incentives and streamlined regulatory processes, making it an attractive destination for business owners.
Why Choose Saudi Arabia for Your Consultancy Company?
- Strategic Market Position: Saudi Arabia’s strategic location and growing economy provide a prime market for consultancy services, catering to diverse sectors such as finance, healthcare, IT, and more.
- Legal and Financial Protection: A consultancy company in Saudi Arabia provides limited liability protection, separating personal assets from business liabilities, enhancing financial security, and minimizing personal risk for business owners.
- Digital Transformation and Infrastructure: Saudi Arabia is embracing digital transformation, offering advanced digital services and robust infrastructure, including advanced transportation, telecommunications, and financial services, that supports efficient business operations.
- Economic Diversification: The Vision 2030 initiative promotes economic diversification, creating new opportunities across various sectors, including technology, healthcare, and renewable energy.
Setting Up a Consultancy Company in Saudi Arabia
Step-by-Step Process
- Choose a Business Structure: Decide on the legal structure of your consultancy company. In Saudi Arabia, you can choose to set up a sole proprietorship, partnership, or a limited liability company (LLC).
- Name Reservation: Choose a unique name for your consultancy company and reserve it with the Ministry of Commerce and Investment (MOCI). Ensure the name reflects the nature of your business.
- Prepare Documentation: Gather and prepare all necessary documents, including the Articles of Association, business plan, and identification documents for shareholders and directors.
- Submit Application: Submit your application along with the required documentation to MOCI for initial approval.
- Obtain Licenses and Permits: Depending on your business activities, you may need to obtain additional licenses and permits from relevant government agencies, such as the Saudi Council of Engineers for engineering consultancies.
Licensing Requirements
In addition to the general business registration, consultancy firms in certain industries may need specific licenses:
- Professional License: Required for consultancies offering professional services such as legal, medical, or engineering consulting.
- Commercial License: Necessary for consultancies involved in commercial activities.
Eligibility Criteria for a Consultancy Company
To establish a consultancy company in Saudi Arabia, the following criteria must be met:
- Local Partner Requirement: At least one Saudi national as a partner with a share not less than 25%, or according to the minimum limits of the activity type.
- Shares of Non-Professionals: The percentage of shares of non-professionals, whether Saudi or Gulf, or holders of distinctive residence or non-professional companies, does not exceed 30%.
- License to Practice: The non-Saudi professional company participating or contributing to the professional company should have one or more representatives who have a license to practice the profession.
Documentation Required
Professional Partners
- Commercial Registration: A copy of the commercial registration of the participating foreign establishment, authenticated by the Saudi Embassy (the commercial registration shows the professional activity of the company).
- Financial statements: Last financial year of the applicant company and certified by the Saudi Embassy (if the company is not licensed by the Ministry of Commerce with a previous professional activity.)
- National Identity: A copy of the national identity if one of the partners is a natural person (individual) holding the nationality of one of the GCC. And a copy of the professional license for each partner from the competent authority in the Kingdom.
Non-Professional Partners
- Commercial Registration: A copy of the commercial registration of the shareholding partner certified by the Saudi Embassy and a copy of the national identity, if one of the partners is a natural person holding the nationality of one of the GCC.
- Financial statements: Last financial year of the applicant company and certified by the Saudi Embassy.
General Incentives
Business Incentives
- 100% Foreign Ownership: Full ownership of the consulting company and property, including land, providing complete control over the business operations and assets.
- Repatriation of Capital and Profits: There are no restrictions on transferring capital and profits abroad, allowing to efficiently manage the financial resources and investments.
- Tax Advantages: Benefit from the absence of sales tax (VAT), personal income tax, and property tax, which significantly reduces the overall tax burden on the consulting business.
- Loss Carryforward: Ability to carry forward losses indefinitely, offering flexibility in managing the business finances and optimizing tax liabilities over the long term.
- 10-Year Tax Incentives: Tax breaks are available for investments in undeveloped provinces, encouraging the expansion of the consulting services into emerging markets within Saudi Arabia.
Financial Incentives
- Saudi Industrial Development Fund (SIDF): While traditionally focused on manufacturing, SIDF also supports consulting firms that contribute to industrial development by offering medium to long-term loans of up to SR1.2 billion.
- SME Support: The SIDF Loan Guarantee Program (Kafalah) assists consulting SMEs in securing loans from Saudi commercial banks, facilitating access to necessary capital for business growth.
- Interest-Free Loans: Small consulting enterprises can obtain interest-free loans of up to SR3 million from the Saudi Credit & Savings Bank, promoting entrepreneurship and development in the consulting sector.
- Human Resources Development Fund (HRDF): The HRDF provides loans and grants for training and employing Saudi nationals, helping consulting firms build a skilled workforce and enhance their service offerings while supporting national employment goals.
Benefits of Partnering with SharkBX
- Experience: Our team has extensive experience in the construction industry, both locally and internationally. We have completed numerous projects in Saudi Arabia, providing us with valuable insights into market dynamics and regulatory requirements.
- Expertise: From project management to procurement and logistics, our team of experts provides the necessary guidance and support to ensure the smooth operation of your construction business in Saudi Arabia.
- Authority: We have established strong relationships with local authorities, suppliers, and key stakeholders in the construction industry, which can be instrumental in securing permits, approvals, and partnerships for your business.
- Trust: Our reputation for delivering high-quality projects on time and within budget has earned us the trust of our clients and partners. Partnering with SharkBX ensures you are working with a reliable and trusted advisor.
Conclusion
Setting up a consultancy company in Saudi Arabia offers significant potential for growth and success. However, the process requires a thorough understanding of local regulations and strategic planning. By following the steps outlined in this guide and leveraging the expertise of SharkBX, you can establish a solid foundation for your consultancy company in one of the most dynamic economies in the Middle East.
Navigating the complexities of setting up a consultancy company in Saudi Arabia can be challenging. Contact SharkBX today for expert guidance and support. Let us help you achieve success in Saudi Arabia’s vibrant business environment.
For more detailed guidance and support, visit our website or contact us for a free consultation.