Temporary commercial registrations and Representative Offices:
Foreign businesses who have obtained a contract from the Saudi Arabian government or a government agency are entitled to a temporary Commercial Registration, enabling them to perform the contract in Saudi Arabia. Until June 2001 the registrations were issued by the Ministry of Commerce and Industry, since then the task has been shifted to SAGIA. An application for a temporary Commercial Registration must be lodged within thirty days of the signing of the contract. Under this arrangement, the foreign business entity’s activities in the Kingdom must be limited to the specific project, and it may not solicit other business in the Kingdom. Where a foreign entity performs several concurrent government contracts in Saudi Arabia, it may establish a representative office to supervise its activities in the Kingdom.
Technical and Scientific Services Offices:
Resolution No. 1532 of 1975 of the Minister of Commerce and Industry makes it possible for foreign companies with specific technical and scientific skills to obtain licences to open technical and scientific services offices Saudi Arabia. However, such offices may not engage in commercial activities, and are meant to give technical support to the parent company’s Saudi Arabian agent or distributor, to conduct market surveys, and to undertake product research.
Pursuant to Order No. 41 of 1991 of the Minister of Commerce non-Saudi entities engaged in the “free professions”, which includes accountants, architects, consulting engineers and lawyers, may establish, in partnership with a Saudi entity engaged in the same profession, a presence in the Kingdom under a licence from the Ministry of Commerce and Industry. Such professional partnerships may not have limited liability, and must have at least 25% Saudi Arabian participation. The foreign entity must have been in existence for at least ten years, and must have acquired an “excellent reputation” in its field.
*This Saudi Arabian Law Overview is not intended to be legal advice, and cannot be relied on as a substitute for legal advice. We make no representation that the contents of this Saudi Arabian Law Overview are or will remain accurate or current.
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