MOVING YOUR KOREAN BUSINESS TO SAUDI ARABIA

EVERYTHING YOU NEED TO KNOW ABOUT MOVING YOUR KOREAN BUSINESS TO SAUDI ARABIA

Are you a business owner in Korea seeking to broaden your horizons and tap into the rapidly growing market of Saudi Arabia? Setting up and expanding your company to Riyadh or another strategic city in Saudi Arabia can offer a wide range of benefits, including a strategic location, a business-friendly atmosphere, and access to a dynamic market.

The below guide will walk you through the crucial processes and considerations involved in expanding your Korean business to Saudi Arabia. With its strategic geographic location, excellent infrastructure, and favorable business regulations, Saudi Arabia offers an appealing destination whether you are considering opening a new branch, moving your headquarters, or exploring new avenues for growth.

CAN A KOREAN CITIZEN START A BUSINESS IN SAUDI ARABIA?

Yes, Korean entities can setup their subsidiary in Saudi Arabia with 100% ownership, depending on the business activity and related license requirements. As part of the Kingdom’s Vision 2030, there are many benefits to having an entity and/or its headquarters set up in Saudi Arabia.

 

CAN KOREAN CITIZENS OWN 100% OF A COMPANY IN SAUDI ARABIA?

Yes, Korean citizens can own 100% of their company in Saudi Arabia. In line with the Saudi Vision 2030, the Saudi government has worked to encourage Korean investors to invest in the Kingdom. Therefore, this will have a knock-on effect by raising the country’s economic level and diversifying income sources away from oil and gas.

The conditions for setting up a Korean company with 100% ownership in Saudi Arabia includes:

  • Korean companies must be in existence for at least 1+ years with positive audited financials.
  • Korean companies must have a presence in at least 3 countries or jurisdictions to engage in trading activities in the Kingdom with 100% Korean citizen ownership. 
  • Paid-up capital requirements will vary depending on business activity and legal entity structure.
  • Paid-up capital must be deposited to a local Saudi bank account once the entity is registered with the authorities.

 

HOW TO REGISTER A KOREAN COMPANY IN SAUDI ARABIA?

Setting up a Korean company in Saudi Arabia requires the following steps:

  1. Get in touch with Creation Business Consultants to secure your free consultation on setting up your Korean company in Saudi Arabia.
  2. Creation will submit your application to the Ministry of Investment to issue your business license which is known as commercial registration (CR). 
  3. Creation will then complete your trade name reservation, Memorandum and Articles of Association (MOA AOA) and register your company with the Ministry of Commerce and Industry (MOCI) and your Company Registration business license will be issued.
  4. Creation will assist you in completing the post-incorporation registrations with the appropriate Saudi Arabian Government departments such as:
    • Ministry of Human Resources and Social Development (MHRSD).
    • General Organisation of Social Insurance (GOSI).
    • Zakat, Tax and Customs Authority (ZATCA).
    • Register your office’s national address with government authorities.
    • Balady and Civil Defence.
    • Absher, Muqeem, Qiwa and Mudad.
    • Bank account opening services.
    • General Manager Iqama and employee visas.

The above is a general guide to setting up a Korean company or branch company in Saudi Arabia. Investors should carefully evaluate their options and seek professional guidance to ensure they are making the right choice for their business.

 

HOW TO SETUP A LIMITED LIABILITY COMPANY (LLC) IN SAUDI ARABIA?

Incorporating a Limited Liability Company (LLC) is initiated at the Ministry of Investment of Saudi Arabia. Once all the company legal documents are finalised, the Commercial Registration (CR) certificate is issued. At this point, the LLC is required to fully complete all government registrations and external approvals in Saudi Arabia. Post-company incorporation involves several government files and registrations, and this can take several weeks to enable the LLC to be fully operational.

The main Saudi government registrations include:

  • Ministry of Labour and Social Development (MLSD).
  • General Organisation of Social Insurance (GOSI).
  • Zakat, Tax and Customs Authority (ZATCA).
  • Local business address (Wasel).

Note the above is not a complete list of Saudi government registration requirements. Saudi business and investment regulations are continuously changing.

 

HOW LONG DOES IT TAKE TO REGISTER A COMPANY IN SAUDI ARABIA?

Saudi Arabia company setup duration may vary depending on the documentation requirements, license types, legal structures, and external licensing approvals. For more details on the duration and cost of your Saudi Arabia company setup, contact Creation Business Consultants on email [email protected] or call Saudi Arabia +966 54 995 2676 UAE +971 4 878 6240.

 

HOW MUCH DOES A TRADE LICENSE COST IN SAUDI ARABIA?

The investment for forming a Saudi entity will vary according to the license type, shareholding structure and business activities. For a free no-commitment consultation for Saudi business setup, contact [email protected] and a member of our team will guide you on the options available, processes and investment criteria.

 

WHAT IS THE MINIMUM CAPITAL REQUIREMENT FOR A LIMITED LIABILITY COMPANY (LLC) IN SAUDI ARABIA?

Paid-up capital amounts will vary depending on the business activity and ownership structure. The Ministry of Investment in Saudi Arabia (MISA) will determine the amount of capital upon application. Specific minimum capital is prescribed by MISA as below:

  • Commercial (with a minimum 25% Saudi partner): SAR 7 million and a minimum contribution from the foreign shareholder of SAR 20 million.
  • Commercial (100% foreign): SAR 30 million and commitment to invest at least SAR 200 million over the first 5 years.
  • Service/Professional (100% foreign ownership): SAR 50,000.
  • The Ministry of Investment of Saudi Arabia (MISA) may request additional requirements or approvals for company incorporation.

 

WHY MOVE YOUR KOREAN BUSINESS TO SAUDI ARABIA?

Saudi Arabia enjoys a strategic location, with its proximity to key markets making it an attractive destination for businesses seeking access to the Middle East, Asia, and Africa. It boasts one of the largest economies in the Middle East and holds a prominent position as the world’s leading oil producer, playing a crucial role in the global oil and gas industry.

Moreover, the Saudi government is actively working towards diversifying its economy through Vision 2030. This initiative aims to reduce dependence on oil by developing sectors such as tourism, entertainment, and technology. This diversification creates marketing opportunities for businesses across various sectors. The government is also heavily investing in infrastructure development, including transportation, logistics, and urban planning, presenting potential opportunities for companies involved in construction, engineering, and related sectors.

However, relocating a business from the Korea to Saudi Arabia is a significant decision that necessitates thorough market research. Various factors, including an assessment of the economic and regulatory environment, practical implications of relocation such as tax treatment, workforce considerations, and cultural differences between the two countries, should be carefully considered.

For a detailed discussion and assessment of your business’s potential for market expansion in Saudi Arabia, reserve your free consultation with Creation Business Consultants. Contact us via email at [email protected], and a member of our team will be in touch.

 

WHAT ARE THE BENEFITS FOR A KOREAN BUSINESS TO MOVE THEIR BUSINESS TO SAUDI ARABIA?

Relocating your business from Korea to Saudi Arabia can offer several potential benefits. However, as with any decision-making process, it is critical to evaluate these advantages against the specific needs and characteristics of your business, as well as the readiness of the market for such a move. Below we have listed some of the main potential benefits:
Thriving Market: Saudi Arabia has a growing population with increasing levels of diversity. Moving to Saudi Arabia can provide access to a new customer base locally and strategically in the Middle East, Africa, and Asia, creating growth opportunities for various industries.
Economic Transformation: Saudi Arabia’s Vision 2030 provide supportive conditions to foreign investments and businesses. The country actively works towards economic diversification, promoting private sector growth, and developing non-oil industries.
Gateway to Middle East and Other Regions: Saudi Arabia’s geographical location gives access to markets in the Middle East, Asia, and Africa. Further, it is the hub for regional headquarters in the MENA region, with more than 180 international firms relocated their regional offices in the country. This not only attests to the stability of the KSA market but also provides access opportunities for businesses to global firms.
Supportive Business Environment: The Saudi government is actively working to create a business-friendly environment through streamlining registration and licensing processes. They simplify and reform regulatory licensing requirements, such as removing exemptions on foreign investors engaging in legal advisory activities.
While these are some potential benefits, it is crucial for Korean businesses considering relocation to Saudi Arabia to conduct thorough due diligence. Consider factors like cultural differences, access to a talented workforce, the specific industry landscape, and regulatory frameworks to ensure alignment with set business goals. Reserve your consultation with Creation Business Consultants to access our local experts in market research and due diligence. Email us at [email protected], and a member of our team will be in touch.

HOW TO MOVE MY KOREAN COMPANY TO SAUDI ARABIA?

Moving a Korean company to Saudi Arabia involves a series of processes and documentations, requiring careful planning and an understanding of the Saudi Arabian business environment and its regulations.

  1. Conduct a Market Research: Complete macro and micro research of the economy, the specific industry of your business operations, the market demand, and opportunities for your business services. Identify the appropriate jurisdiction for your company’s incorporation, determine local competition, and understand the regulatory requirements of your business license.
  2. Financial planning: Conduct a budgeting plan for your company’s expansion to Saudi Arabia. Understand the financial and taxation implications of the move, including corporate taxes and applicable incentives.
  3. Decide on the Company Structure: Check the regulatory conditions for your business operations. Certain type of licenses and activities may be restricted for Saudi investors or require a Saudi partnership. Choose from the different company structures, including LLC, Joint Stock Company, Simplified Joint Stock Company, General Partnership and Limited Partnership.
  4. Documentation: Prepare the required documents and obtain appropriate attestations for your corporate documents.
  5. Company Licensing and Registration: Submit your company’s application and register it with the relevant authorities and government portals.
  6. Visa: Obtain the appropriate visa for your General Manager and employees to complete the company registrations and avoid any fines.
  7. Government Approvals: Obtain any required approvals and permits from the relevant governmental authorities to commence your business activities.
  8. Compliance and Reporting: Stay informed of the compliance and reporting requirements of relevant government authorities. Establish procedures to monitor ongoing compliance with local laws and regulations and submit timely reports.
  9. Seek Professional Advice: Reserve your free consultation with Creation Business Consultants and get access to our local experts familiar with both Saudi Arabia and Korean commercial laws, regulations, business environment, and registration procedures. Email us at [email protected] and a member of our team will be in touch.

 

WHAT DOCUMENTS ARE THE REQUIRED TO SETUP MY KOREAN COMPANY IN SAUDI ARABIA?

Setting up a Korean company in Saudi Arabia involves a formal registration process, and you will need to provide various corporate documents to comply with local regulations. Specific requirements may also vary based on the type of investment license and business structure you choose. However, the following are the general list of parent Korean company documents that would be commonly required:

  • Articles of Incorporation: This document is called 사업조직정관 (Saeopjojik Jeonggwan) in Korean. It outlines the company’s structure, purpose, and key governance rules.
  • Business License: This is referred to as 사업자등록증 (Saeopjadeungrokjeung) in Korean. It serves as the official proof of the company’s existence and allows it to operate legally.
  • Company Credit Report: This is called 사업자 신용정보 (Saeopja Sinyeong Jibong) in Korean.
  • Company Seal (Inkan): This is called 인감 (Ingam) in Korean.
  • Investment Report (for foreign investors): This is called 투자보고서 (Tujabogeosseo) in Korean.

These documents are required to be notarised, attested, and legally translated. It is however advisable to engage with our local experts at Creations to ensure compliance with the latest regulations and requirements of the relevant registration authorities. Our team will assist in preparing your documents and ensure that all documentation is in order. For further assistance email us at [email protected] and a member of our team will be in touch.

 

CAN I GET A VISA FOR ME & MY FAMILY TO LIVE IN SAUDI ARABIA?

Yes, it is possible for you and your family to live in Saudi Arabia. You will need to get the appropriate type of visa depending on the purpose of your stay.

Iqama: If you are moving to Saudi Arabia as a nominated General Manager, your visa will be sponsored by your employer and the Ministry of Investment Saudi Arabia will handle your iqama application. This visa allows you to reside in the country. Once you have a valid iqama you can apply for residence visas for your family members by submitting the required documents to the Saudi authorities. The iqama is renewable every year.

Employment Visa: Also known as an employment permit or work permit. This visa is also typically sponsored by your employer and permits you to reside in Saudi Arabia. It is usually extended to cover family members, spouse, and dependents.  Your employer can apply for your visa through the Ministry of Human Resources platform.

Business Visa: If you are yet planning to establish a business in Saudi Arabia or explore the business opportunities, you may apply for a business visa. However, this a short-term visa and does not enable you to conduct or engage in any business activities during your stay. Furthermore, it does permit your family members to accompany you when travelling to Saudi Arabia. Once you become a resident in Saudi Arabia, you may be eligible to sponsor your family members for a family visit visa allowing them to stay with you for a specific short duration. Alternatively, you may apply for their residency by issuing a residence visa for dependents.

Visa processes and requirements may be subject to change. It is important to check with the Saudi Arabian embassy, consult with your employer, and seek professional advice form Creation’s experts for the most-up-to date information and procedures for successful visa application and processing. For further assistance email us at [email protected] and a member of our team will be in touch.

 

ONCE I MOVE MY KOREAN COMPANY TO SAUDI ARABIA CAN I GET A COMPANY BANK ACCOUNT?

Yes, once you move your Korean company to Saudi Arabia you can open a corporate bank account. However, the process of opening a bank account in Saudi Arabia involves several steps and you will need to check the local banking regulations and requirements of your selected or preferred bank. The following is a guide on certain considerations to open a company bank account in Saudi Arabia:

1. Select a bank: Research and choose the local bank that suits your business needs; there are many banks in Saudi Arabia to choose for your corporate bank account. We have listed some of the most popular banks including Saudi National Bank, Al Rajhi Bank, Saudi Awwal Bank (SAB), and others.

2. Prepare the required documents and legalizations: Gather the required documents of your Saudi Arabia and parent company and complete the necessary authentication of the documents. Typical documents of a Saudi company include:

  • Licensing and Registration Certificate.
  • Articles of Association.
  • Proof of the company address in Saudi Arabia.
  • Valid General Manager’s Saudi Iqama.

3. Visit the bank: Creation Business Consultants will schedule an appointment with the bank(s) to assist your General Manager to meet with the banking representative, submit the required documents and necessary signatures.

4. Due Diligence Approval: A complete due diligence of your Saudi company will be reviewed thoroughly by the bank’s compliance team.

5. Bank Account Activation: Once the compliance approval is granted, the bank will proceed with the issuance of the corporate bank account details.

To ensure the successful management and execution of your corporate bank account application email us at [email protected] and a member of our team will be in touch.

 

CAN A FOREIGNER OPEN A BANK ACCOUNT IN SAUDI ARABIA?

Yes, foreigners can open a bank account in Saudi Arabia. The process and requirements for opening a bank account may vary among different banks. The following are general guidelines for a foreigner to open a bank account:

1. Eligibility: Check your eligibility to open a bank account.

2. Prepare the Required Documents: Gather the necessary documents, typically these include:

  • Being above the age of 18.
  • Vaid passport and residency permit in Saudi Arabia.
  • A registered and activated Absher account.
  • Proof of residence in Saudi Arabia.
  • Proof of employment letter from the sponsor.

3. Visit the bank: Once you have the documents ready, Creation Business Consultants visit arrange a bank meeting for the opening of your personal Saudi bank account.

4. Due Diligence Approval: The bank will conduct due diligence on the applicant, review the applicant’s background, financial stability, and compliance with local regulations.

5. Bank Account Activation: Once the application is approved, the bank will provide you with the details of your bank account. Some banks may request you to make an initial deposit.

It is advisable for foreigners to have clear understanding of local banking regulations. Engaging the services of local consultants is indeed helpful in navigating the local banking procedures and ensuring compliance. For assistance with bank account opening, reach out to our team on email at [email protected] and we will be in touch.

 

CAN I HAVE A BANK ACCOUNT IN SAUDI ARABIA WITHOUT A RESIDENCY VISA?

The conditions and requirement for opening a company bank account in Saudi Arabia vary among banks. Generally, non-residents may face challenges in opening a personal and corporate bank account without a residency visa. Banks typically require certain documentations to accept a bank account opening application including a residency visa, which serves as a form of identification for legal status in the country.

Non-residents seeking to open a bank account are advised to leverage the expertise of local consultants to ensure a seamless bank account opening. Reach out to our team at Creations for further assistance or email us at [email protected] and a member of our team will be in touch.

 

CAN A FREE ZONE COMPANY DO BUSINESS IN SAUDI ARABIA?

Yes, a free zone company can do business in Saudi Arabia through incorporating a limited liability subsidiary. The incorporation process involves several steps and documentation that depend on the selected business activity the company wishes to engage in. Generally, the free zone company will be required to show a healthy financial position in its last financial year end, along with submitting notarised, attested, and legally translated corporate documents, shareholder information, business license copy, resolution, and power of attorney etc.

Depending on the business license, the regulating authorities may request further documentation, such as proof of a certain number of years of experience, presence in several jurisdictions or regions, or a Saudi partnership for professional activities.

For a free consultation to discuss your free zone company’s eligibility and options for setting up and doing business in Saudi Arabia, contact us at on [email protected], and we will schedule a consultation with member of our team Saudi team.

 

WHICH FREE ZONE IS BEST IN SAUDI ARABIA?

Saudi Arabia has recently announced the establishment of economic cities to attract foreign investment and promote economic diversification and these are:

 

These new special economic cities offer competitive incentives for businesses, including:

  • 5% corporate income tax rate for up to 20 years.
  • 0% withholding tax on repatriation of profits from SEZ into foreign countries.
  • 0% VAT for all intra-SEZ goods exchanged within and between the SEZs.
  • Special tax treatment in line with OECD principles to avoid double taxation.
  • Exemption from operational fees for employees and their families within SEZ.
  • Customs duties deferral for goods inside SEZ or 0% Custom duties on capital equipment and inputs inside SEZ.
  • Flexible and supportive regulations around foreign talent during first 5 years.

Each free zone also offers a specialized list of business activities, and has its own set of regulations, approval processes, and registration fees for establishing a business. Determining the most suitable free zone depends on various factors such as the nature of your business activity, industry, and reach to suppliers and clients.

Book your free consultation with our team of experts to navigate through the best free zone that suits your business operations and objectives. Email us at [email protected], and a member of our team will be in touch.

 

HOW MUCH DOES IT COST TO RENEW A TRADE LICENSE IN SAUDI ARABIA?

The cost to renew a trade license in Saudi Arabia may vary depending on several factors, including the structure of your company, the type of license, and the specific requirements of the activity regulating authority.

Creation Business Consultants offer comprehensive company renewal, commercial registration, and compliance services, including government portal management. This ensures your company remains compliant and ready to operate. Focus on your core business and let us take care of the annual registration and compliance formalities for your Saudi Arabia business.

Reserve your free consultation to discuss renewing your company’s Commercial Registration in Saudi Arabia by emailing [email protected], and a member of our team will be in touch.

 

WHAT ARE THE DOCUMENTS REQUIRED FOR TRADE LICENSE RENEWAL IN SAUDI ARABIA?

The documents required for trade license renewal in Saudi Arabia vary depending on the structure of your company, type of license and the regulations set by the licensing authorities. However, a valid Zakat, Tax, and Customs Authority (ZATCA) certificate is one of the essential requirements to complete the renewal. Consult with our team of experts at Creation Business Consultants and enjoy our comprehensive package for your timely company renewals, including your trade license, commercial registration, external approvals, and government portals to avoid any imposed fines or interruptions to your business operations and your on-going compliance with the regulations. 

 

CAN A KOREAN CITIZEN MOVE TO SAUDI ARABIA?

Yes, a Korean citizen can move to Saudi Arabia, but the process varies based on the purpose of the visit. Selecting the appropriate visa or residence permit is essential to ensure compliance with the requirements. Saudi Arabia has various types of visas including employment, business and family residency. Following are some of the types of visas available for Korean citizens in Saudi Arabia:

Employment visa: Also known as work permit or employment permit. It is sponsored by the employer who is responsible for initiating the visa application process on behalf of the employee. This includes authenticating the employment contract and adding the employee to the necessary regulatory authorities, including the General Organization for Social Insurance (GOSI) and Mudad.

Residence Permit (Iqama): This visa type is granted for individuals looking to stay in KSA, for an extended period for employment purposes or as dependents under sponsorship.

Business Visa: Korean citizens may visit Saudi Arabia on a business visa for the purpose of business exploration. It is valid for one month, yet its holder is not permitted to engage in any business transactions during his stay.

As immigration regulations and processes may change, it is highly recommended to consult with a registered corporate service provider whom is experienced and based in Saudi to ensure a successful and compliant license registration, visa and relocation processing. Let our local team handle the hassle of preparing your visa documentation, necessary authentications, and submission to the authorities, contact us at Creations or email us at [email protected].

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