Company formation in Saudi Arabia
The Saudi Companies Law (CL), which came into effect in 2016*, is the principal body of legislation governing the conduct of companies in the Kingdom.
The Saudi Companies Law (CL), which came into effect in 2016*, is the principal body of legislation governing the conduct of companies in the Kingdom. The five forms of companies which can be established in the Kingdom are:
In addition, the CL permits foreign companies to establish,
LLCs, JSCs and branches are the most common vehicles used by foreign investors in the Kingdom, although investors’ choices are generally driven by factors such as shareholder numbers, management structure and the business activities permitted. In practice, foreign companies usually establish LLCs. LLCs are a well-regarded corporate vehicle among foreign investors in Saudi Arabia because once they are set up there is little need for a lot of continual maintenance and the personal liability of each of the partners is limited to the individual partner’s contribution to the company’s share capital. The disadvantages of a partnership company and limited partnership company, in comparison to the LLC and JSC, make them rarely used or attractive for investors. The major disadvantages of the partnership company are:
* Amended 2018,2020