Create a Saudi Arabia Company in the UAE

Similar to Qatar and Dubai, Saudi Arabia taxes its investors only if their profits are earned from activities within the emirate. These activities could be generated directly by a Company, a Permanent Establishment of an overseas parent or a Joint Stock Company. In this instance taxation rate will depend on the origin of these investors; if they are non Saudi tax residents then the corporation tax rate is 20% whilst the local Saudi businesspersons are taxed based on the Zakat (which is an islamic assessment for tax purposes).

In the event that a company is owned by both Saudi and non Saudi shareholders the profits are apportioned accordingly and taxed separately.

Applicable Taxes

- Zero Tax if income is derived outside the emirate of Saudi Arabia

- Taxable Income within the Saudi Arabia: 20% Corporation Tax or for locals 2.5% Zakat (religious tax)

- Disposal of Shares - taxed at 20%

- Non Saudi employees Social Securities Tax is 2% whilst for Saudi employees is higher at 12% (10% relates to housing allowance - capped at SAR 45,000)

Local Tax Office

The local tax office is called "The Zakat, Tax and Customs Authority" and it is a modern and digitalised department.

Tax Payers and Tax Consultants can use the online platform offered for various tasks including:

Modern Approach

The taxpayer and the service providers can obtain from the income tax office electronically several information including:

E- Invoicing for everyone!

The emirate has introduced the e invoicing service where effectively all sales invoices are registered centrally. Applicable date is 1st of January 2023

The use of a sophisticated electronic solution is mandatory and via this approach all sales invoices are appropriately raised, recorded and addressed.

Double Tax Treaty Network

Phase 1

• Decide Company Type - Limited Company, Permanent Establishment of Overseas Company or Joint Stock Partnership.
• Obtain the MISA Investor License - designed for international companies who want to be established and trade in Saudi Arabia
• Name Reservation - Tricky as it could take 3 weeks to be approved or be rejected without explanation. Local requirements for similarities, protected brands, and prohibited names exist like in Europe.
• Drafting the Company Articles of Association (AoA) - Must be signed by the General Manager and will be scrutinised during the licensing process.
• Obtain Company Commercial Registration
• Registration with Chamber of Commerce

Phase 2 - Employee Related

The KSA is sensitive with recruitment and has its unique particularities that must be followed. We demonstrate below the process in chronological order:

• Chamber of Commerce - Registration of the General Manager of the Company and employees
• Register with Ministry of Labour - employees will be registered; depending on industry requirements to hire local employees may exist
• Godi - Register the Company and the Employees with the Social Insurance Office (Godi)
• Taxes - Registration with tax authorities for the local taxes (Religious tax zakat and Corporation Tax)
• Obtain a national address; needed for licensing of the Company and banking application
• Obtain a visa (tourist or entrepreneur) for the General Manager of the Company

Phase 3 - Banking and Legalisations