Start a Limited Liability Company in Saudi Arabia

Foreign investors who are interested in setting up a company in Saudi Arabia?can?open a limited liability company, the?most common business form?chosen for?incorporation. A?limited liability company (LLC)?can be set up with only?one shareholder and one director. One of the?main advantages of the LLC in Saudi Arabia?is that the?company’s shareholders?are liable for the debts incurred by the respective business only in the amount they have participated in the?company’s capital.

The Saudi limited liability company according to the Company Law

The Company Act is the main law that provides for the incorporation of various types of legal entities, among which the?limited liability company?is one of the most employed?in Saudi Arabia. There are two types of LLCs here:

• The private one;
• The public one.

Among these, the private limited liability company?is the most employed because of the faster and simpler registration procedure with the Saudi Companies House.

What should be noted is that the Company Law was renewed in 2015 and a new amendment was brought to it in 2018. According to the Act, here are the main characteristics of this legal form:

1. Tt has a distinct legal personality from its shareholders;
2. Under the new law, there is a limitation on the life of businesses created under this form;
3. Several documents need to be prepared when registering an LLC;
4. The business must have a local office in a Saudi Arabia city;
5. A special license must be obtained in case the business has foreign ownership;
6. As the main requirements, it must have at least one shareholder and one director.

If you are interested in the LLC as a vehicle to?start a business in Saudi Arabia?as a foreign investor for Immigration to Saudi Arabia, our company registration advisors are at your service with tailored services.

Bookkeeping is one of the most requested services from our in Saudi Arabia. This is one of the most time-consuming parts of the accounting of a business, especially a large one. Making sure all accounts payable and receivable are in order is part of our daily tasks, so feel free to contact us for this service.

Company officers in an LLC in Saudi Arabia

The?limited liability company?must have at least one shareholder who can be a natural person or another corporation, as well as at least one director. However, if the number of shareholders is more than 20, they must appoint a Board of Directors. Also, if the minimum number of shareholders is 3, the LLC must have a Supervisory Board that will oversee the activities of the director. Also, the maximum number of members in this business form is 50.

In light of the new changes in the legislation, it should be noted that the shareholders are no longer liable for the business’s debts in case it reaches a loss of at least 50% of its share capital, as it was before 2018.

Also, in the case of debt recovery, a creditor can collect the due amount from the net profits distributed to the shareholder by the company, provided that a judgment is issued in this sense.

Various changes provide for?simplified LLC formation in Saudi Arabia, which is why this legal entity has become quite popular