In Saudi Arabia, if you want to do business, you need a special official identification card for that. It enables you to open a bank account or sign contracts, as well as gain access to a variety of benefits. CR is required by everyone planning to conduct business in Saudi Arabia. Let’s talk about the importance of CR in Saudi Arabia in detail. We will discuss the benefits of having a commercial registration number in Saudi Arabia along with how to register for it and the documents it requires.
You Should Check: How to Set Up a Business in Saudi Arabia? Govt Guidelines
What is CR Number Meaning?
If you want to start a business in Saudi Arabia, you must get a CR number. It allows you to run a business legally in Saudi Arabia. Besides that, you need a commercial registration number as the first step before you want to open a bank account or sign certain documents and contracts. Now you know CR number meaning, let’s talk below about the benefits of a CR number and how to get one.
Benefits of Obtaining a CR Registration in Saudi Arabia
These are the top 3 benefits of having a Commercial Registration number in KSA.
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Get Access to a Lot of Business Activities
Business owners and international investors in Saudi Arabia need to complete legal requirements to establish a company. They must obtain a Commercial Registration (CR) to officially create a business entity and to engage in commercial transactions. The CR provides legal protection for business operations in Saudi Arabia.
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Vibrant and Exciting Business Environment
Saudi Arabia is a great place for businesses. Many people want to invest there because it has a lot of opportunities to make money. The country has a lot of resources and a strong economy. Many businesses can grow and do well in Saudi Arabia because there are a lot of people who buy things, the country is making big changes to its economy, and more and more people are living there.Reaching Heights with Saudi Arabia’s Vision 2030.
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Reaching Heights with Saudi Arabia’s Vision 2030
Saudi Arabia is soon going to be a more exciting country because of its vision 30 plan. It will become a more vibrant and exciting country for businesses. But know that if you want to do successful business in Saudi Arabia, you must know the work process of the market and also choose the right industry. This means knowing the rules, what people want, who else is selling the same thing, and how the market is changing. It’s also important to support Vision 2030, check out the competition, and do some research.
Basic Requirements for Saudi Commercial Registration
Before applying for a Saudi Commercial Registration, make sure you have all the necessary prerequisites prepared. These requirements include:
- At least 18 years old and not a government employee.
- 5000 SAR minimum capital requirement met by your business.
- Must renew your CR number every year because it expires.
- 2 minimum shareholders and 50 maximum.
- LLCs must always appoint an auditor for this process.
- Submit company incorporation application with documents to SAGIA.
- Get a permit from the Ministry of Labor to hire labor.
- Companies in Saudi Arabia are liable to pay Zakat.
- An income tax certificate offered by the Ministry of Finance is required.
Requirements for Foreign Investors
To start a company in Saudi Arabia, foreign investors need to meet certain rules. Here are those regulations.
- Obtain a legal form of the company depending on the business goals and company activities.
- Share capital requirements are SAR 100,000 for general trading companies, SAR 1,000,000 for general manufacturing companies, and SAR 25,000,000 for companies investing across sectors.
- A Local sponsor or partner is required from foreign investors to assist them with local laws, regulations, and cultural nuances.
- Company name should align with the Ministry of Commerce (MOC) guidelines with a must suffix “Limited” or “Ltd.”in the name of a limited company.
- You must open a bank account to complete commercial registration. It’s easy and can be done in just one working day.
- Submit the article of association and notarization to the Unified Center or Companies Department, follow provided guidelines and deadlines, and allow around 3 days for notarization.
Important Documents for Enrollment
Know that all important papers need to be changed into Arabic. Only special people or groups can do this. It’s really important to have the papers changed right for a smooth process in Saudi Arabia.
- Completed company registration application.
- Board resolution from the parent company.
- Trade name authorization.
- Identity and address proof for shareholders and directors.
- Articles and memorandum of association (AOA & MOA).
- Business plan, bank recommendation letter, power of attorney, required third-party approvals.
Read: Saudi Labor Law and New Working Hours in Saudi Arabia
Process to Get your Commercial Registration (CR)
Visit the Saudi Business Center website and provide basic information about your business, such as name, activity, and capital. Pay the service fee. Or you can make an appointment at the nearest Ministry of Commerce branch. Bring along the documents required. Below is a detailed explanation of the process. Some of these steps are easy, but a few of them can require external assistance.
1) Have an office in Saudi Arabia
You probably don’t have a license at this stage. This means that you can’t buy a property in Dubai. Although having an office is necessary in Saudi Arabia if you want a CR number, you don’t need to buy it. You can rent it as well. For that you don’t necessarily need a license in Saudi Arabia.
2) File the Article of Association of Your Company
You need to follow the rules set by the Saudi Arabian Ministry of Commerce. These rules, called Articles of Association (AoA), need to be prepared and approved, which can take about 2 days. After approval, the founders of the business must sign the AoA in front of a notary public to get a commercial registration certificate Saudi Arabia. Then, the company’s name and the articles must be published in the newspaper, which also takes about 2 days.
3) Make the Capital Deposit
When you are done with filing the Article of Association of your company , it’s time to make a capital deposit. Above we talked about the minimum amount of it. After making a deposit, you’ll get a certificate, which might take around three days. You also have to pay some fees for the registration. Business registration certificate (or CR) fee is SAR 6000 per year.
4) Return to the Commercial Register
A company is required to return to the commercial register when it’s being questioned in any way. Most companies change their information when that happens. So in case you come across this situation, it is required that you make the changes within less than one month following the request date.
5) Submit a Certificate of Membership
Like every business in Saudi Arabia, you need to register with the Chamber of Commerce and Industry within 30 days of being registered with the Mercantile Registry. And just like other procedures, you need to pay a registration fee for your business somewhere around SAR 2k.
6) Register with the GAZT
Register with the General Authority for Zakat and Tax (GAZT). You will get a file number and a certificate to start operations after that. The Zakat and Tax Law was passed in 2018 and requires a 20% tax on income, profits, and capital gains. This rate, however, ranges from 2% to 45% according to the income of businesses. And it requires a certified public accountant (CPA) to review it.
7) Obtain TIN on the GAZT Website
You need to sign up for a Tax Identification Number on the GAZT website. To do this, follow these steps: Sign up on the site of the General Zakat and Tax Authority using the given instructions. After you finish these steps, you will get your TIN.
8) Re-enter the GAZT portal
After you get your TIN, go back to the GAZT portal to begin the registration. Use the username and password you made before. You’ll also get a code on your phone to confirm the registration.
9) Select VAT Registration and Complete Documentation
To register for Value Added Tax (VAT), provide taxpayer details and financial information of the company. For that, you need to hire a tax representative. But if you live in Saudi Arabia, you don’t need a financial representative. The taxpayer details section will automatically fill in the TIN and the Commercial Registry. You just need to feed about import or export of goods or services. Then add the IBAN to link it with your company’s VAT account and indicate the date on which the company became eligible for Value Added Tax.
10) Add Data About Projected Taxable Sales and Expenses
To process your request, you need to provide the necessary documents such as income statements, customs reports, etc. Failure to provide this evidence will result in an audit to verify your declarations.
11) Declare that the Information Provided is Authentic
This is the final step where you need to complete your registration. Confirm that the information provided is accurate. You will need to provide your full name, ID number, and your position in the company. Then you will get an application number and a receipt that you can download.
12) Registration in the GOSI
Both employers and workers need to sign up with the General Organization of Social Insurance. This is an important step to fulfill the requirements for a Saudi Commercial Registration.
13) Get a Municipal License in the Labor Office
As a business, you must get a municipal license before your next registration step comes. This will help you establish your business in Saudi Arabia. To do so, you must register with the Labor Office. After that, you can also hire people.
14) Renew your CR Number When it Expires
If your company’s commercial registration has expired, you can easily renew it online. The service is available in both Arabic and English for your convenience. To renew, visit the Ministry of Commerce’s website and pay the required fees, or just directly visit any Ministry office and do that.
Cost of Opening a Company in Saudi Arabia
Opening a Company in Saudi Arabia costs from SAR 15000 to SAR 30000 depending on the type of business. The cost includes the total capital investment that you have to make in order to proceed with opening a business in Saudi Arabia and getting a commercial registration number. LLCs in Saudi Arabia have a minimum capital requirement of SAR 10k SAR. Commercial registration certificate from MOCI costs around SAR 500. Municipality license costs around SAR 5k. Foreign Investment Licence’s price starts from SAR 3k and goes up to SAR 8k.
4 Types of Companies in Saudi Arabia
For commercial registration, entrepreneurs have several options. Below are the 4 common business structures in the country that you can choose from and create your business entity.
1) Limited Liability Company (LLC)
In Saudi Arabia, the most common type of business registration is the Limited Liability Company (LLC). An LLC must have at least 2 partners, and can have up to 50 partners. The partners are only responsible for the amount of money they invest in the company. The minimum capital required for an LLC is SAR 500,000. The flexibility, limited liability protection, and ability for foreign ownership make an LLC a desirable option for business owners. An LLC can have as few as two partners and as many as fifty, which creates a favorable environment for business growth.
2) Joint Stock Company (JSC)
JSC suits the ones with multiple owners like a larger company. This type of registration is good for businesses that want to raise money by selling shares on the stock market. Joint stock companies have to follow strict rules and need to have at least SAR 10 million as their minimum capital. They also need to have at least 5 shareholders to register the company in Saudi Arabia. These shareholders are only responsible for the amount of money they put into the company. The required capital for a joint stock company changes based on the type of company.
3) Branch of a foreign company
The third type includes foreign companies and they can set up a branch in Saudi Arabia with the approval of the Minister of Trade and Agriculture. When a foreign parent company opens a branch office in Saudi Arabia, it’s called a foreign branch. This allows foreign companies to do business in the country and access the local market, but just like the above examples, it also comes with rules and limitations on the types of business activities.
4) Representative Offices
In the same way as foreign companies, representative offices will also need the approval of the Ministry of Commerce and Industry to obtain the corresponding license. Foreign companies set up representative offices in Saudi Arabia to conduct market research and promotional activities. Even though they are not conducting business, these offices are important in connecting foreign organizations with potential partners or clients in Saudi Arabia. Commercial agencies also need approval from the Ministry of Commerce and Industry.
Conclusion
If you want to do business in Saudi Arabia, having a Commercial registration in Saudi Arabia is essential. There is a complete process of acquiring it that we have described above. From being at least 18 years old and having a minimum of 5k capital investment to submitting various documents to a few institutions, you have a lot to do. That’s why we suggest hiring a legal expert who can help you with all of this. We have also discussed with you the cost of opening a company in Saudi Arabia. Although the process to acquire sometimes becomes lengthy there are many benefits of having a commercial registration number in Saudi Arabia that makes it worth it.
FAQs
What is the CR number in Saudi Arabia?
CR number is like a business license in Saudi Arabia that lets you open a company, hire people, sign contracts and do a lot of other business activities.
What benefits do companies get through Commercial Registration in Saudi Arabia?
After getting a commercial registration number, your business gets access to various government services and benefits. You can make commercial transactions as well. And the best part is that the state protects your legal rights.
How to get a CR number in Saudi Arabia?
For that you must provide the requirement documentation to the Ministry of Commerce and Investment. Submit your application along with the fee and wait for a few days before you can get a CR number in Saudi Arabia.
What is the corporate tax rate in Saudi Arabia?
You have to pay 20% of the corporate tax on the net adjusted profits. Zakat is also charged from the company’s side at the rate of 2.5%.
