Ministry of Investments clarified that there is no minimum capital requirement even for trading sector under “Tasattur” correction program.
Riyadh: Saudi Arabia is entering its last quarter of the amnesty period announced for commercial correction of businesses in the Kingdom. This scheme allows any foreigner or a foreign entity to have business in his/its own name.
There are mainly 3 routes to legalise the existing business or start a new business in Saudi Arabia for a foreigner:
- Commercial Concealment Correction,
- Foreign Company Investment and
- Premium Iqama.
Whichever be the route, for a trading sector business, a minimum capital of SR 27 Mn has to be shown and of which SR 20.25 Mn (75% of SR 27 Mn) has to be brought in by the foreign partner.
Now Ministry has announced two major relaxations which is really a breather for the existing businesses in the Kingdom. However both relaxations are for applicants under commercial concealment correction route (“Tasattur” correction program).
1. No minimum capital for trading sector.
Ministry has relaxed the requirement of SR 27 Mn minimum capital for trading sector under the surrender route. Companies may choose their existing capital or any amount of their choice. Even for owning 100% in trading sector, there is no minimum capital requirement.
However for any new investor coming into Kingdom to start a business or invest in any existing business, this relaxation may not be applicable.
2. Minimum annual turnover for application in surrender route reduced to SR 2 Mn.
For applying under commercial correction program, the existing businesses required the below eligibility –
- SR 10 Mn or above annual turnover in the last reporting period or 50 or above employees.
- The surrendering CR should have been formed before February 2021
- The surrendering foreign partner should be under the sponsorship before February 2021
- Consent of the Saudi owner/partner.
Of the above the requirement of minimum turnover of SR 10 Mn reduced to SR 2 Mn; which means any trading business with an annual sales of SR 2 Mn or above in the last reporting period can apply for surrender route.
Contact our offices in Saudi Arabia or Dubai to know more about legalising procedure or on setting up new business in the Kingdom.
Al Khobar: +966 55886 0445
Riyadh: +966 50718 6249
Jeddah: +966 54509 1766
Dubai: +971 58100 4046