LOCAL EXPERTISE

FOR YOUR
GLOBAL NEEDS
OUR SERVICE
PORTFOLIO
 Host
Host Speakers Panelists

Omer Saleem
Osman Qureshi Michael Coaker Maha Ali CEO
Director of Business Development Legal Manager
Customer Success Manager
Shradha Bajaj
Customer Success Manager

Anita Chalke Osman Qureshi

Regional Manager Director of
Adnan Abdulaziz Customer Success
Sumair Nadeem
Business Partner, CRM Alhusaiyen
and Service Delivery Legal Associate
EVENT AGENDA
• The Regional Headquarters (“RHQ”) Program
• KSA Entity Incorporation options
• Latest developments in Joint stock company laws
• Managing Government & Annual Compliance
• Wage Protection System and Labor QIWA contract Authentication
• Visas and Immigration updates
• Nitaqat - How to manage Saudization
• Q&A with Experts
ENTITY INCORPORATION
IN SAUDI ARABIA
AS FOREIGN INVESTORS
What makes you eligible for starting/
expanding your business in Saudi Arabia?
 WHAT MAKES YOU ELIGIBLE FOR STARTING/
EXPANDING YOUR BUSINESS IN SAUDI ARABIA?

ESTABLISHED COMPANY INDIVIDUAL STARTUP

Valid CR and Saudi Green

Innovative Idea
bylaws Card

The Premium
Residency
At least one-year
Local Business
financial
Incubators
statement
 AVAILABLE OPTIONS FOR HAVING
LEGAL PRESENCE IN THE SAUDI ARABIA

Independent Legal Entity Branch of Foreign Entity Technical and Scientific

Office

Limited Liability Company

- One person or more
- Limited liability
- No capital requirements - Extension for the parent - Non-operational - no
- 1 GM, Directors, BOM company revenues to be
- Joint liability generated
- One general manager - Extension for the
- No capital limitations parent company
Joint Stock Company
- One person or more - One general manager
- 500K minimum capital – - No capital limitations
25% paid up - Local agent / business
- BOD partner
AVAILABLE INVESTMENTLICENSES FOR FOREIGN INVESTORS

Service License
Service License Industrial License
-- 100%
100% foreign
foreign ownership
ownership - 100% foreign ownership SPECIAL APPROACH
- Released capital requirement - No capital requirement
- Released capital requirement FOR INNOVATIVE IDEA
AND PROJECTS
Commercial License Professional License
Entrepreneur license
- Presence in at least 3 markets - 25% Saudi shareholder
- Capital share of 30M Riyals (for - Professional experience

Supporting Letter for

“
Temporary Contractor
ContractorLicense
-- Previous
License
project completion
Previous project completion
“ Business Incubator
- ISO and professional certificates
- ISO and professional certificates
INCORPORATION
PROCESS UNDER
SAUDI LAWS AND
REGULATIONS
 Receive needed Prepare required Obtain MISA
advice to decide documents & Legal approval and receive
the ISIC activities drafts needed license

Obtain required Complete required Draft and issue company

additional secondary AoA & obtain the
approvals registrations Commercial Register
NEW COMPANY LAW IN SAUDI ARABIA GENERAL OVERVIEW

Issued on 30 June 2022

To be effective starting on
Amendments include:
20 January 2023

1 2 3 4 5 6

Releasing Developing the Exempting Allowing Enhancing the Amending JSC

To reflect more fixability and restrictions at provisions of micro and small interim or electronic regulations and
all stages of transformation annual dividend system and
enhances the Kingdom's incorporation, and merger
companies from
the distribution to allowing
Introducing
new form of
leading position and starting of
company’s
between
companies and
requirement to partners and
shareholders.
arbitration for
disputes
companies
appoint an “Simplified Joint
competitive advantages trade names allowing auditor. settlement. Stock” meeting
until stock dividing the the
trading. company into entrepreneurs’
two or more needs.
companies.
 SIMPLIFIED JOINT STOCK COMPANY

Shareholding of one person or Exemption from minimum Flexible management structure

more capital share requirements (GM, managers, BOD)

Flexible bylaws including: Different types of shares and associated rights and obligations

Shareholders resolutions instead of obligatory general

assembly

Restrictions on shares transfer and statutory

obligation to waive the shares
 The headquarters are to
This program was designed
house the strategic and
to encourage multi-national
management divisions of
companies to establish their
such companies, with the
regional headquarters within
What is all the Saudi.
goal of driving employment
and growth within Saudi.

fuss over RHQ?

For qualifying entities, establishing an RHQ under this licence type
will become mandatory in order to participate in public sector
tenders, with the view to extend this requirement to parastatal
entities, including the likes of Aramco.
 01 In order to qualify for the
RHQ licence, a company
would need to be
multinational and have a
What Criteria Must presence in at least two
GCC countries.
Be Met To Qualify
For The RHQ Licence? 02 The two countries would
not include the country of
the parent entity nor the
entity in Saudi.
 Increased
access to
participation in
government
tenders.

10-year
Consultation exemption of
Saudization
services offered requirements for
by MISA.
the RHQ licence
holders.

What Do You Have

To Gain By Opening
An RHQ? Exemption from
cap on visit visas
that can be
Issuing work
permits for
spouses.
issued.

Exemption for
Beneficiary age
professional
accreditation for extended to 25
listed activities. years old.
 01 Application is made to MISA – 02
submitting all required documents,
namely the parent company documents,

How Do You
supplementary CR’s and audited
financials for the past financial year.

Apply For the The name of the RHQ

entity is to be included
in the application.
RHQ Licence?

03 Licence fees to be paid

to MISA.
 01 Within 6 months of the licence being issued, RHQ
activities must commence.

At least 3 optional RHQ activities must be

02 commenced within 12 months of the licence being
What’s the issued.
Compliance 03
At least 15 employees must be appointed within 12
Catch? months of the licence being issued.

04
The appointed employees must be suitably qualified
and experienced, with at least 3 being at an executive
level.

05 There are restrictions on commercial activities.

Your First Steps to Compliance:
Secondary Registrations within Saudi
 Hiring of your first SN
employee

MHRDS & MoL

Registering the Activating the Companie’s
Companies Account with GOSI
File with MHRSD
Registration of your Complete
Company with ZATCA Incorporation

and VAT Authorities

An auditor will be required in Receive Reference Register the company
order to complete the number from ZATCA with ZATCA
registration process with
ZATCA, this requirement
relates specifically to
registration of your company for
VAT. Receive ZATCA approval
and receive first
clearance certificate
Registered Address, P.O Box and your
Physical Presence within Saudi

Finding a suitable Link the P.O Box and

Register a profile under
premises and obtaining a physical address to
your GM’s credentials
lease your company’s profile

Requirements of
Certificate of Upon completion of office- Municipality determined by
compliance issued by municipal inspection Activity of the Company-
Municipality conducted Municipality to be
approach for requirements
 Muqeem, Mudaad and Qiwa:
The Face of the digital revolution in
Saudi

Your Guide to the

Immigration and
Labour Relations
Management
Your On-Going
Compliance
and Renewal
Considerations
 Your Government
Relations Needs:
How we Help our Clients

• We provide our clients with a full-

service GR solution, meaning that
ensure that our clients are not only
making timeous renewals of their
licences and portals, but also provide
our clients with the latest
developments in the regulatory
environment within Saudi.

• This allows our clients to focus on their

core business, while we focus on
ensuring they have as few regulatory
roadblocks in achieving their goals
within KSA.
VISAS AND IMMIGRATION
Types of Visas

Block Visas for Temporary Work Visa Business Visit Visa E-Visas
Iqama
Assessment Assessment Assessment
- Assessment - Saudization - Candidate profile - Purpose of visit
- Saudization - Quota Eligibility - Type of engagement - Track dates
- Quota Eligibility - Candidate profile - Consular process
- Candidate profile - Degree Certificate - Travel Date
- Degree Certificate - Consular Process - Track dates
- Consular Process - Onboarding Date - Extension of visa stay
- Onboarding Date
New Developments
Legalization of Degree What does
Certificate and personal
Document this mean
Saudi Arabia officially became the 122nd
member to accede to the Convention • Faster
Abolishing the Requirements of Legalization turnaround time
for Foreign Public Documents, commonly
referred to as the “Apostille Convention • Still a Gap
Visa Quota Eligibility
• Manage Nitiqat/Saudization

• Recruitment Planning

• Qualification of new hires

• Set realistic timelines

• Interim Solutions
Overview of
the Nitaqat program
Nitaqat
The Ministry of Labor of the Kingdom of
Saudi Arabia has launched the Nitaqat
Program (which means ‘Ranges’ in Arabic)
in 2011.

Nitaqat Program is an initiative by the Saudi

government to promote Saudization of the
workforce. It is a set of regulations and
incentives designed to encourage
employers to hire Saudi nationals and
develop a more diverse, skilled Saudi
workforce.
 Advanced Nitaqat
• Since its application in 2011, Nitaqat has been
subject to different changes and updates, the
latest of which was in December 2021( the
Advanced Nitaqat/‫)ﻧطﺎﻗﺎت اﻟﻣطور‬

• Provide a permanent Localization plan for the

coming three years for providing the
legislative stability.

• Also imposes penalties on companies that do

not meet the Saudization targets.
Nitaqat Ranges/Zones

Currently, there are five Zones:

Nitaqat applies to all entities that have 6

employees and above.
The initiative restricts certain positions in the
private sector to be occupied only by Saudi • High Green
nationals.

HRSD would apply Nitaqat to place the Saudi

entity into a zone based on the percentage of
Saudization it holds. Each range has its
privileges and limitations
PRIVILEGES & LIMITATIONS
OF EACH RANGE
 Platinum Range
Companies:
•

PLATINUM
•

•
 •

High Green
•

•
 §

§
Mid Green
§

§
 §
§

Mid Green
§

§
 §

Red §

§
High Green Range Mid Green Range Low Green Range
Companies Companies Companies
What changes affected the Advanced Nitaqat
Using the number of employees instead of the size of the entity:
Nitaqat classifies entities by their sector, activities and number of employees using the International
Classification Standard (“ISIC4”) over three years. By applying a specific equation using the
Saudization percentage and number of employees, the entity will be able to know in which zone it
falls for the first, second and third year onward.

Minimum wage:
The MHRSD would only count an employed Saudi national towards Nitaqat if his/her basic+Housing
monthly salary is at least SAR 4,000, which was SAR 3000. However, those whose salaries are SAR
3000 and less than SAR 4000, including part-time workers shall be counted as ½ of the Saudi worker.
Handicapped worker will be considered as 4 workers, provided that his/her salary is not less than
SAR 4,000.
 What changes affected the Advanced Nitaqat
Consolidation of Related Activities:
The previous Nitaqt classified organizations under 85 categories, which have been condensed to 33 activities
and placed them in the same category with common characteristics.

Agricultural production, animal production, its services and equestrian clubsv Mines, Energy and Services
Industries Contracting, construction, building and cleaning
Operation and maintenance Wholesale and Retail
Health Services Accommodation, Recreation and Tourism
Ground transportation and storage Sea and Air transport
Financial Institutions Business Services
Social Services Recruitment services and security guards services.
Personal Services Combined Entities.
Higher Education Girls’ schools, Kindergartens and Nurseries
Boys’ Schools and boys’ and girls’ complexes International Schools
Selling Fuel Women’s goods Sale and maintenance of mobile phones
Restaurants with services that do not include fast food Fast food and Ice-cream Shops
Cafés Catering
Communication solutions IT Solutions
postal activities IT Infrastructure
telecommunications infrastructure Operation and maintenance of communications
Operation and maintenance of information technology
Nitaqat Saudization Calculation:
To explain how the equation works, the table below shows the values that need to be used to generate the
minimum classification for each zone, then the Saudizatin percentage will be compared to the result to
allocate the entity in the relevant zone.

Below is an example of an activity and the Nitaqat zones for the first year on the
assumption that the entity has 19 employees (7 Saudis and 12 non-Saudis):

Total number of Saudi employed divided

Saudization percentage= by the total number of employees 7/19 × 100 = 36.84
multiplied by 100 = xx%

Equation to produce the Y= Curve Fixed Value * log(total number of employees)

values for each zone:
+ absolute fixed value for the relevant year

Y = m log (x) + w
 * Note: The highlighted cells are formula cel
value of m and w is taken from MOL provided nithaqat data for each sector

*Below calculations are based for 1st

year only

Saudi Emp Expat Emp Total Emp Saudization % m (value) w (Value) Log Value of Total Emp Result Y = m log (x) + w Low
7 12 19 36.84% 2.19 25.76 2.94 32.21 Green

Saudi Emp Expat Emp Total Emp Saudization % m (value) w (Value) Log Value of Total Emp Result Y = m log (x) + w Med
7 12 19 36.84% 2.34 31.54 2.94 38.43 Green

Saudi Emp Expat Emp Total Emp Saudization % m (value) w (Value) Log Value of Total Emp Result Y = m log (x) + w High
7 12 19 36.84% 2.91 40.02 2.94 48.59 Green

Saudi Emp Expat Emp Total Emp Saudization % m (value) w (Value) Log Value of Total Emp Result Y = m log (x) + w Platinum
7 12 19 36.84% 3.22 47.15 2.94 56.63 Domain

An absolute fixed The correct values

The range The fixed value value for the first An absolute fixed value for the third year
The New Activity of the curve (m) year (w) for the second year (w) and beyond (w)
2.19 22.76 25.76 27.76
Low green
IT solutions Medium green 2.34 28.54 31.54 33.54
High green 2.91 37.02 40.02 42.02
Saudized Job Roles
ü 30% - Finance
ü 30% - Marketing
ü 20% - Engineer
ü 25% - Engineer_Technician
ü 25% - IT_Engineer
ü 25% - IT_Programmer
ü 25% - IT_Technician
ü 100% - Administration
ü 50% - Legal
ü 70% - Legal ( 20 Dec 2022)
ü 35% - Consultancy
ü 40% - Consultancy ( 25 March 2024)
 We will now open the
floor to a Q&A session.

Please feel free to

participate