A lot of people ask us the impact of having a GCC person or corporate or entity as a shareholder in the company. First thing first, a GCC company owned by a foreigner would be treated at par with the UBO of the company, i.e. as a foreigner entering the Kingdom of Saudi Arabia.
When it comes to companies or entities owned by GCC nationals (not residents) as shareholders or GCC nationals themselves as shareholders, the impact is significant from a process and understanding perspective.
GCC nationals are treated similar to KSA citizens when it comes to setting up companies’ in perspective. They are not mandated to go via MISA or the Ministry of Investment to setup an entity and can go straight to the Ministy of Commerce. They can setup a company in any activity and the capital requirements are similar to that of KSA nationals. Zakat and Taxes are also similar to that of KSA nationals; and not expats (at 20% of profits).
In this manner, presence of GCC national as a shareholder would be helpful to reduce the taxation incidence on the company as well as opens up multiple activities which may have otherwise restrictions for foreign shareholders. Note that restrictions of capital etc. may only go away if the company is 100% owned by the GCC national.
For more details, please check the latest regulations and approach a legal firm for help. This is not legal advice in any manner.
Arnifi is digital first Corporate service provider helping companies enter the Middle East region, starting with UAE and Saudi Arabia markets. Founded and backed by professionals from Amazon, Souq and other large companies operating in KSA – the team understands what it takes to succeed as a startup in both UAE and Saudi Arabian markets, apart from going through the setup process multiple times.
Arnifi will provide a truly digital experience to entry and scale up of companies both UAE and Saudi Arabia. The Arnifi promise is simple, yet revolutionary, use technology and a great team to provide transparency, efficiency and great customer experience in the whole process.
Check out at – www.Arnifi.com for more details.
