We previously discussed how to register foreign investment in Saudi Arabia, detailing the requirements, conditions, and steps involved. Now, we provide you with additional information to ensure you have a comprehensive understanding of the entire process. The question that might come to mind is: What happens after registration?

Once foreign investment is registered in the Kingdom of Saudi Arabia, there are a range of services that investors require to ensure the continuity of their operations and keep their data updated in accordance with the Ministry of Investment’s regulations. These services includ

Annual Data Update for Foreign Investors inSaudi Arabia 

Annual data updates are a mandatory requirement imposed by the Saudi Ministry of Investment on all foreign entities registered with them. This procedure ensures that the company’s data remains in compliance with local regulations and enhances transparency and accuracy in the provided information.

Why is the annual update important?

Updating the company’s data is crucial for several reasons, including:

Legal Compliance: Ensures the company remains within the correct legal and investment framework, contributing to the continuity of business operations.

Avoiding Penalties and Fines: Failing to update data on time may result in registration cancellation or financial penalties.

Facilitating Government Interactions: Updated data makes it easier for companies to obtain government approvals and make future amendments smoothly.

Building Investor Confidence: Accurate and updated information enhances the company’s credibility with partners, clients, and government entities.

What data needs to be updated?

During the annual update, the company provides updated information about:

Basic company information: Such as the trade name, legal entity, address, and website, if available.

Partners and shareholders details: Names, nationalities, shareholding, and any changes to the ownership structure.

Legal representative: Update the details of the general manager or authorized signatory and verify their legal powers.

Point of contact: Designating the person responsible for dealing with the Ministry of Investment and receiving official notifications and updates.

What are the procedures for the annual update?

Submit the request electronically through the Ministry of Investment’s e-services portal.

Enter the required data and verify its accuracy according to the company’s official information.

Pay the annual fee of 62,000 SAR, which must be paid within 15 days of the invoice issuance; otherwise, the service will be canceled, and the company must reapply.

Wait for the review and approval, which typically takes 5 business days.

Receive confirmation of the update after approval, enabling the investor to continue operations without any hindrances

What happens if the data is not updated?

If the investor does not update their data within the specified time:

• Some services provided by the Ministry of Investment will be suspended.
• The investment license may be canceled, preventing the company from continuing its activities.
• The company may face difficulties in interacting with government entities or obtaining new permits.

Read also about the tax system in Saudi Arabia

Procedures for Modifying Ownership Registration in Saudi Arabia

The Ministry of Investment allows foreign investors to modify their company’s ownership registration in accordance with the legal procedures governing such changes. This service includes redistributing shares among partners, adding or removing partners, or converting the entity into a fully national company.

What situations require modifying ownership registration?

Redistributing shares among existing partners.

Adding new investors as partners in the company.

The exit of one of the partners for any reason.

Replacing partners with heirs in case of death.

Converting a company into a fully national entity after being foreign-owned.

What documents are required for modifying ownership?

According to the Saudi investor guide, the required documents vary depending on the type of modification, and may include:

A partners’ decision certified by the Chamber of Commerce or the Saudi embassy, detailing the modification.

Documents of the new partner (if adding new partners), complying with foreign investor registration conditions.

A court-issued letter in the case of heirs, specifying the new share distribution for each heir

What are the costs and expected duration?

Fees: There are no fees for modifying ownership.

Expected Duration: The Ministry of Investment typically takes 5 business days to complete the modification after receiving all required documents

How to apply for this service?

Investors can submit a request to modify ownership registration through the Ministry of Investment’s e-services portal, where required documents are uploaded, and the request can be followed up until final approval.

Why is updating ownership data important in companies?

• Ensures legal compliance to avoid any future legal issues.
• Organizes relationships between partners in accordance with Saudi laws, ensuring transparency and operational stability.
• Maintains business continuity without legal or administrative obstacles.

 Approval for Property Ownership for Foreign Investors in Saudi Arabia

The Saudi Ministry of Investment allows foreign investors to own real estate in the Kingdom for the purpose of conducting business activities or providing housing for employees. These approvals are subject to specific regulations to ensure that property ownership aligns with Saudi Arabia’s economic and developmental policies.

Types of properties that can be owned in Saudi Arabia:

• Properties for the company’s administrative office or headquarters.
• Industrial properties for the foreign investor to engage in industrial activities.
• Housing for employees working in the company.
• Warehouses or storage facilities, depending on the investment activity

Conditions for property ownership approval:

Foreign investors must adhere to the following conditions to obtain property ownership approval:

• The property must be outside Mecca and Medina, where foreign investors are not allowed to own property.
• For real estate development activities, the project must not cost less than 30 million SAR.
• The property must be used within 5 years of ownership to ensure the investment benefit is realized and the property is not left idle.

Required documents:

The Ministry of Investment may request documents that verify the purpose of property ownership, such as:

A building permit or approval letter from the municipality, specifying the land’s intended use.

A copy of the property deed the investor wishes to own.

Engineering or financial reports if the property is intended for real estate development

Cost and timeline:

• Fees: No fees for obtaining property ownership approval.
• Expected Duration: The approval process typically takes 5 business days after completing all necessary documents.

 Cancellation of Registration

If an investor wishes to terminate their business in the Kingdom, they can request the cancellation of the company’s registration, either voluntarily or after liquidation.

Requirements:

• A commercial register cancellation certificate
• Proof of cancellation of the VAT registration from the Zakat, Tax, and Customs Authority.
• Confirmation of employee termination and business activity closure.

It is worth noting that cancellation fees are free of charge, and the expected duration for completing the procedures is two business days.

In conclusion, we emphasize the importance of following the legal and administrative steps to ensure the success and sustainability of your investments. Whether you are looking to modify ownership, obtain property ownership approval, or cancel registration, complying with official requirements ensures smooth operations and compliance with local regulations.

HFA Firm Services: Your Partner for Investment Success

HFA Firm is a trusted partner for investors and entrepreneurs looking to establish and expand their businesses in Saudi Arabia and other countries. We provide a comprehensive range of services to ensure your company complies with legal regulations and facilitate your business operations.

Our services include:

• Company Formation and Management: We assist you in setting up your company in Saudi Arabia, from selecting the appropriate legal entity to obtaining necessary licenses.
• Legal and Accounting Follow-up: We provide legal and accounting follow-up services to ensure your company’s compliance with local regulations.
• Tax and Financial Consulting: We offer specialized tax and financial consulting to help you make informed decisions.
• Customized Solutions: We design tailored solutions to meet your specific needs, ensuring a successful and stable start to your business anywhere in the world

At HFA Firm, we are committed to providing the necessary support and advice to ensure the success and expansion of your business in the Saudi market and globally.

By:Belkis husein