The Share Capital in Saudi Arabia
Updated on Wednesday 31st December 1969
In this article, our company formation advisors in Saudi Arabia explain different aspects related to the share capital in Saudi Arabia.
The total capital investment in Saudi Arabia necessary for a foreign investor to qualify for a Saudi Arabia General Investment Authority (SAGIA) license according to the Foreign Investment Law must not be smaller than:
• SAR 5,000,000 (USD 1,333,000) for projects in agriculture;
• SAR 1,000,000 (USD 266,666) for industrial projects;
• SAR 100,000 (USD 26,666) for other projects, like services.
The minimum capital requirement for an LLC in Saudi Arabia
Even though there is not a statutory minimum capital requirement for setting up a company in Saudi Arabia under an LLC form, actually, the SAGIA imposes that LLCs (limited liability companies) in this country should have a capital of minimum SAR 500,000 (USD 133,350).
For certain kinds of business operations, a certain minimum share capital in Saudi Arabia is imposed by the SAGIA, such as:
• Trading (with 100% foreign ownership): SAR 30,000,000 (USD 8,001,000);
• Real estate developments: SAR 30,000,000 (USD 8,001,000);
• Industrial activities: SAR 1,000,000 (USD 266,666).
The share contributions in kind have to be evaluated independently. LLCs in this country have to put aside yearly at least 10% of their net profits to form a statutory reserve.Our Saudi Arabia company formation consultants can provide more information on this subject. We also offer advice on how to open a company in Saudi Arabia.
The LLC can interrupt this allocation if the statutory reserve attains 30% of the paid-up capital of the legal entity.
Capital requirements and reserves for JSCs in Saudi Arabia
JSCs (joint-stock companies) in Saudi Arabia are the equivalent of public limited companies. The minimum capital requirement for this type of legal entities in this country is of SAR 500,000 (USD 133,350).
Exception to this rule are the categories of SAGIA licensed legal entities which should have the required minimum capital. Our company registration agents in Saudi Arabia can provide more details on this matter.
If you need more information on the minimum capital requirements in Saudi Arabia, or for help in setting up a company in Saudi Arabia, please do not hesitate to contact us.