The use of renewable energy systems both defends the environment while simultaneously reducing atmospheric carbon emissions. Incorporating renewable energy company practices can greatly support these efforts. The Kingdom of Saudi Arabia can increase its energy supply diversity through renewable energy systems which serve as permanent sustainable clean sources for electricity generation from wind and solar power. Through its goal of obtaining 50% renewable energy by 2030 Saudi Arabia will improve its economic stability in addition to sustaining its natural resources.
The newly established self-consumption renewable energy system services by KSA targets the largest consumer base to access numerous renewable technologies including solar power along with wind power as well as waste-to-energy solutions and biomass resources and energy storage through hybrid systems. The launch of renewable energy systems for self-consumption follows the distribution system guidelines that were approved by the Saudi Electricity Regulatory Authority through their Board of Directors in the Kingdom of Saudi Arabia.
Renewable energy companies enjoy many incentives granted by the authorities in KSA
Saudi Arabia offers several incentives to encourage the establishment of renewable energy companies:
Mutajadeda Program by the Saudi Industrial Development Fund (SIDF)
- Support for Renewable Energy Component Manufacturing.
- Up to 75% support of the project cost.
- Loan tenors up to 15 years, including a grace period of up to 36 months.
- Support for Independent Power Producers (IPPs).
- Prepayment periods of up to 20 years, with a grace period of up to 36 months.
- Support for Distributed Solar-Oriented Energy Generation.
- Up to 75% support of the design cost.
- Loan tenors up to 15 years, including a grace period of up to 36 months.
- Available for investments in commercial and agricultural sectors.
- Program Objectives
- Achieve national renewable energy goals.
- Enable local manufacturing to meet demand.
- Application Process
- Register and complete an application.
- Undergo screening to determine eligibility.
- Evaluation by SIDF.
- Contract signing upon approval.
- Contact; reach out to an SIDF representative.
National Renewable Energy Program (NREP)
- Public-Private Partnerships: Facilitates collaborations for large-scale renewable energy systems.
- Incentives: Offers various benefits for solar and wind energy projects.
- Alignment with Vision 2030: Aims to generate 50% of energy from renewable sources by 2030.
Saudi Green Initiative (SGI)
- Environmental Focus: Supports initiatives that contribute to sustainability and carbon emissions reduction.
- Grants and Incentives: Provides financial support for environmentally friendly projects.
Steps for Incorporating a Renewable Energy Company in KSA
1. Request authentication for a contract from the Ministry of Foreign Affairs (MOFA):
This is a document that certifies the authenticity and legitimacy of the contract between the foreign investor and the local partner or sponsor, if any. The contract must include the name, nationality, and share of each partner, the type and scope of the business activity, the capital and term of the company, and other relevant details.
2. Apply for a commercial license from the Ministry of Investment of Saudi Arabia (MISA)
This ministry directs and encourages foreign ventures in Saudi Arabia. The investor must complete an online application through MISA's website, providing information about the company, its shareholders, capital, activities, location, and anticipated financial impact. The investor must also provide supporting documents, such as the authenticated contract, a feasibility study, a technical report, a financial statement, a certificate of incorporation, a visa copy, and a bank statement. MISA will review the application and issue the permit within ten (10) working days if all prerequisites are met.
3. Authenticate the Articles of Incorporation and Obtain a Commercial Register from the Ministry of Commerce (MOCI)
This ministry registers and regulates commercial entities in Saudi Arabia. The investor must complete an online application through MOCI's website, providing information about the company, its shareholders, capital, activities, location, and legal structure. The investor must also provide supporting documents, such as the authenticated contract, the MISA permit, a certificate of incorporation, a visa copy, and a bank statement. MOCI will review the application and issue the commercial register within five (5) working days if all prerequisites are met.
4. Open a Local Bank Account
The investor needs to open a bank account in Saudi Arabia to deposit the company's capital and conduct financial transactions. The applicant also needs to provide documents such as the MISA permit, the commercial register, a visa copy, and a letter from MOCI confirming the share capital. The investor can choose from various banks operating in Saudi Arabia, such as Al Rajhi Bank, National Commercial Bank, Riyad Bank, Samba Financial Group, or Saudi British Bank.
5. Comply with Legal and Tax Requirements
The investor needs to comply with various laws and regulations governing business operations in Saudi Arabia. These include labor law, social security law, zakat law, income tax law, value-added tax law, customs law, environmental law, etc.
Note: Director qualification substantiation requirements may also apply.
Conclusion:
Incorporating a renewable energy company in KSA presents a significant opportunity for the renewable energy sector to contribute, as this sector is crucial for environmental protection and reducing greenhouse gas emissions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
