Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Saudi Arabia. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Reserve a company name | 1 day | no charge |
| 2 | Submit required documentation at the Unified Center (UC) | 1 day | no charge |
| 3 | Pay registration fee at a Bank window, located in the same building as the Unified Center | 1 day | SAR 1,200 registration fee + SAR 650 publication of summary AOA |
| 4 | Meet with the Notary public who reviews documentation and notarizes the Articles of Association (AoA) | 1 week | no charge |
| 5 | Open bank account | 4 days | no charge |
| 6 | Submit the approved documentation, certificate of deposit and AoA at the Unified Center, as well as 2 applications and one undertaking | 2 days | no charge |
| 7 | Pay Chamber of Commerce membership fee at Unified Center | 1 day | SAR 2,100 Chamber of Commerce fee |
| * 8 | Register with GOSI | 3 days, simultaneous with previous procedure | no charge |
| * 9 | Register with the Department of Zakat | 3 days, simultaneous withprevious procedure | no charge |