Question 1

What types of companies can be formed in Saudi Arabia?

Accepted Answer

Main company types: (1) Limited Liability Company (LLC) - most common, 2-50 shareholders, minimum capital SAR 1. (2) Closed Joint Stock Company - minimum 2 shareholders, minimum capital SAR 500,000. (3) Public Joint Stock Company - minimum 5 shareholders, minimum capital SAR 10 million, CMA regulated. (4) Single-Person Company - one shareholder, minimum capital SAR 1. (5) Professional Company - licensed professionals. (6) Holding Company. Foreign investors can own 100% in most sectors (check MISA negative list).

Question 2

How long does it take to form a company in Saudi Arabia?

Accepted Answer

Timeline for LLC: Day 1-3: Business name reservation. Day 4-7: Draft and notarize articles. Day 8-10: Commercial registration. Day 11-15: Licenses and registrations (municipality, Chamber of Commerce, ZATCA, GOSI). Day 16-30: Sector-specific licenses, bank account. Total: 2-6 weeks for standard LLC. We streamline process and handle all filings.

Question 3

What is the minimum capital requirement for Saudi companies?

Accepted Answer

Recent reforms dramatically reduced capital: LLC: SAR 1 minimum (was SAR 500,000!). Single-Person Company: SAR 1. Closed Joint Stock: SAR 500,000. Public Joint Stock: SAR 10 million. Note: Minimum is legal requirement, not practical. Banks typically require higher capital. We advise on appropriate capitalization.

Question 4

Can foreign investors own 100% of a Saudi company?

Accepted Answer

Yes, in most sectors. Saudi Arabia opened most sectors to 100% foreign ownership under Vision 2030. Restricted sectors on MISA negative list include: some real estate, certain hajj/umrah services, some security/media sectors, recruitment agencies (requires Saudi partner). Process: Obtain MISA investment license, follow standard formation, register with SAGIA. We handle full foreign investment licensing.

Question 5

What are the board composition requirements for Saudi companies?

Accepted Answer

LLC: Board optional - managers sufficient. Joint Stock: Board mandatory. Minimum 3, maximum 11 directors. Term max 5 years. Listed companies - at least 2 independent or 1/3 board (whichever greater). Must have Audit Committee (majority independent), Nomination & Remuneration Committee. Board must meet quarterly. We advise on optimal board structure.

Question 6

What are director liabilities in Saudi companies?

Accepted Answer

Directors have significant duties: Fiduciary duties (act in company's best interests), care duty (reasonable care and diligence). Personally liable for losses from: breach of duties, violation of Companies Law, fraudulent actions. Joint & several liability. Criminal liability possible. Protection: Business judgment rule, D&O insurance, proper procedures. Statute of limitations: 3 years from discovery, max 5 years. We help minimize liability exposure.

Question 7

What rights do minority shareholders have in Saudi companies?

Accepted Answer

Saudi Companies Law (2023) enhanced minority rights: Basic rights (dividends, voting, inspect records). 5% shareholders can: Request extraordinary assembly, add agenda items, challenge board decisions. 10% shareholders can: Appoint auditor, file derivative action. Oppression remedy: Court can order buyout at fair value, appoint administrator, dissolve company. We protect minority interests through agreements and litigation.

Question 8

What ongoing compliance obligations do Saudi companies have?

Accepted Answer

Annual: Audited financials, general assembly, ZATCA returns, Zakat declaration, annual report (listed), beneficial ownership update, registry renewal. Quarterly: VAT returns, withholding tax, board meetings, financial reporting (listed). Monthly: GOSI contributions, payroll. Penalties: Late filing (SAR 500-10,000), non-compliance (up to SAR 500,000). We establish compliance calendars.

Question 9

What is the process for buying or selling a Saudi company?

Accepted Answer

M&A process: Phase 1 - Preparation (4-8 weeks): Valuation, info memorandum. Phase 2 - Due Diligence (6-12 weeks): Legal, financial, regulatory review. Phase 3 - Negotiation (4-8 weeks): Term sheet, purchase agreement. Phase 4 - Approvals (4-8 weeks): Board, shareholder, regulatory approvals. Phase 5 - Closing (2-4 weeks): Payment, share transfer. Total: 6-12 months typical. We manage full transaction process.

Question 10

How much do corporate governance services cost?

Accepted Answer

Free initial consultation. Company Formation: SAR 15,000-40,000 (LLC simple to complex foreign). Board Governance: SAR 20,000-50,000 setup. Compliance Programs: SAR 30,000-100,000. Shareholder Agreements: SAR 10,000-30,000. M&A: 1-3% of transaction value. Corporate Restructuring: SAR 50,000-200,000+. Value: Proper governance prevents costly disputes, penalties, and disruption. Transparent estimates provided upfront.

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We help to create strategies, design & development.

Commercial Law

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Corporate Governance

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• We provide free initial consultation and strategic legal guidance.

• We serve discerning clients who demand uncompromising professional standards.

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