The Kingdom of Saudi Arabia (KSA), with its booming economy and ambitious Vision 2030 initiatives, is attracting international businesses for Saudi business setup and company formation in KSA. But why choose Saudi Arabia? A thriving economy, strategic location, supportive government policies, and a young, tech-savvy population create fertile ground for growth. Dive deeper and explore the potential of establishing your company in this dynamic and promising Saudi business setup landscape.
Located in the heart of the Middle East and North Africa (MENA), Saudi Arabia is the largest country among the Gulf Cooperation Council (GCC), with the highest GDP reaching SAR 105 billion in 2022. Compared to other G20 countries, Saudi Arabia ranks 10th in terms of FDI net inflows among the G20 countries and 16th among the G20 countries in terms of FDI stock for the same year.
Our Services
- Company registration
- Facilitating GM Iqama sponsorship
- Office solutions
- Bank account setup
- Company maintenance
- Saudisation compliance support
- Accounting, bookkeeping, and auditing services
- Legal support
Advantages of Setting Up Your Business in Saudi Arabia
- 100% foreign ownership for services, industrial, and trading activities
- No personal income tax
- No Saudi partner is required for most of the activities.
- Broad economy
- Safety, security, and a good standard of living
- Investor-friendly policies
Types of Legal Entities in Saudi Arabia
The business structures available in Saudi Arabia are:
- Limited Liability Company (LLC): A Limited Liability Company, also known as a private limited company, is the most common type of legal entity for setting up a business in Saudi Arabia. It requires a minimum of two shareholders and a maximum of 50 shareholders. Foreigners are able to own 100% of an LLC business in Saudi Arabia through the Ministry of Investment in Saudi Arabia (MISA).
- Joint Stock Company (JSC): A joint stock company is a highly regulated company structure in Saudi Arabia that requires a minimum capital of SAR 5–10 million.
- Branch office: The foreign company branch in Saudi Arabia must align with the business activities of the parent company. The minimum paid-up capital requirements must be fulfilled and deposited into the Saudi corporate bank account.
The structure you choose depends on the business legal requirements, ownership, and corporate structure of the company.
Document Requirements for Obtaining a Business License in Saudi Arabia
1. Attested license of the parent company or certificate of incorporation
2. Attest the financial statement, Memorandum of Association, and Article of Association (AOA) of the parent company.
3. Attested Power of Attorney (POA) and board resolution
How Do You Form a Company in Saudi Arabia?
Stage 1: Pre-Incorporation Process
1. MISA license
2. Name reservation
3. Attestation of Articles of Association (AOA)
4. Commercial registration issuance
5. Chamber of Commerce registration
Stage 2: Incorporation Process
1. Registration with government entities is required.
2. National address registration
3. General manager Iqama application
Stage 3: Post-Incorporation Process
1. Chamber of Commerce account activation
2. General Manager Iqama processing in KSA
3.Registration with government platforms
4. Bank account opening
Types of Business Licenses in Saudi Arabia
- Services License, i.e., Constructions, Administrative Investment, Information Technology, Tourism, Training, Health, Insurance, and Re-Insurance, Education, Advertising and Media, Logistic Services, Organizing Exhibitions, Catering and Food Services, Financial Services, Aviation and Handling Services, etc.)
- Industrial License, i.e., all industrial licenses, such as heavy and light industries and transformative industries.
- License for a scientific and technical office company that wishes to open an office to provide scientific and technical services to agents, distributors, and consumers of their products.
- Commercial license, i.e., wholesale trade and retail trade in the Saudi market
- Professional License, i.e., Consultancies
Documents Required for Establishing a Saudi Company
1. Attested license of the parent company or certificate of incorporation
2. Attest the financial statement, Memorandum of Association, and Article of Association (AOA) of the parent company.
3. Attested Power of Attorney (POA) and board resolution
Unlock Saudi Arabia's Potential: Register your company with our streamlined process and expert guidance
Are you ready to tap into the exciting opportunities of the Saudi Arabian market? Gatestone Group, company formation consultants in Saudi Arabia, offers comprehensive and efficient services to help you seamlessly navigate the process and launch your business with confidence.
From navigating legal requirements to optimising tax strategies, our dedicated team ensures a smooth and efficient setup process tailored to your business needs. Take the first step towards success in the Saudi market today!
FAQs
The Ministry of Investment in Saudi Arabia (MISA), formerly known as the Saudi Arabian General Investment Authority (SAGIA), is a government entity responsible for attracting and assisting foreign investment in the Kingdom. It promotes Saudi Arabia as a business destination, allowing 100% foreign ownership in the region. MISA encourages all sizes and types of companies to set up shop in the Kingdom with the aim of enhancing the competitiveness of the Saudi economy and contributing to its economic diversification.
Stage 1: Pre-Incorporation Process
- MISA license
- Name reservation
- Attestation of Articles of Association (AOA)
- Commercial registration issuance
- Chamber of Commerce registration
Stage 2: Incorporation Process
- Registration with government entities is required.
- National address registration
- General manager Iqama application
Stage 3: Post-Incorporation Process
- Chamber of Commerce account activation
- General Manager Iqama processing in KSA
- Registration with government platforms
- Bank account opening
Yes, foreigners are eligible for 100% ownership in the Kingdom. MISA issues licenses for the majority of the activities and enables foreigners to fully own their businesses in Saudi Arabia.
Yes, foreigners are eligible for 100% ownership in the Kingdom. While some activities require a local partner, MISA issues licenses for the majority of the activities and enables foreigners to fully own their businesses in Saudi Arabia.
While Saudi Arabia encourages foreign investors to set up their businesses there, there are some restrictions on the activities they can perform based on Article 3 of the Foreign Investment Regulation, which allows the Supreme Council of Economic and Development Affairs to issue a ‘Negative List’ that is the list of activities excluded from the scope of foreign investments. In the service sector, the following economic activities are restricted from foreign investment:
- Catering to military sectors
- Security and detective services
- Real estate investment in Makkah and Madina
- Tourist orientation and guidance services related to hajj and umrah
- Recruitment offices
- Commission agents are internationally classified under the number 621.
- Services provided by midwives, nurses, physical therapy services, and quasi-doctoral services
- Internationally classified under the number 93191
- Fisheries
The following documents of the parent company are required to be notarised and attested to set up a company in Saudi Arabia:
- Company trade license
- Certificate of Incorporation
- Parent company’s Memorandum and Articles of Association (MOA and AOA)
- Board resolution
- Power of Attorney (POA)
- Passport copies of the shareholder, director, and authorised signatory
No, Gatestone Group will complete everything on your behalf. The nominated general manager will then be required to visit the country once the commercial registration has been completed to issue the general manager Iqama and open a corporate bank account.
The cost in terms of company formation in Saudi Arabia depends on several factors, such as the type of business, the legal structure of the business, and other requirements. The cost usually comprises the following expenses: government fees, legal and consulting fees, office space, local sponsorship fees (if required), etc.
Connect with our experts at Gatestone Group for personalised guidance and a detailed breakdown of the costs involved. Start your business with confidence—contact us today!
The Ministry of Investment in Saudi Arabia (MISA) and MCI (Ministry of Commerce and Investment) are responsible for granting licenses to foreign and GCC-owned companies, respectively.
The tax experts at Gatestone Group are here to assist you with the tax registration in Saudi Arabia with the following tasks: document preparation, form submission in an accurate and timely manner, the verification process with the General Authority of Zakat and Tax (GAZT), and the issuance of your Tax Identification Number (TIN). Gatestone Group also provides continuous support to ensure that your business stays tax-compliant with Saudi tax laws and regulations.
To get a work visa for foreign employees in Saudi Arabia, the sponsoring employer must register with Saudi Arabia’s Ministry of Interior and provide the following documents to the authority:
- A passport copy of the employee
- Passport-sized photograph
- A completed visa application
- A letter of employment from the sponsoring company in Saudi Arabia that is certified by the Ministry of Foreign Affairs and the Saudi Chamber of Commerce
- Signed copy of the employment contract
- Certified education degree
- A police report with any criminal record
To apply for a Saudi business visa, the following steps should be followed:
- The Saudi employer must apply for a work visa to the Ministry of Foreign Affairs (MoFA) on the applicant’s behalf.
- Submit the work visa with the required documents to the Saudi Embassy.
- Once approved, receive the work visa from the Saudi Embassy.
- Apply for a residence permit (known as an Iqama) from the Saudi Ministry of Labour.
100% foreign investment is allowed in the service sector. Trading and retail businesses are mostly prohibited from foreign investors. Following is a list of prohibited activities that include, but are not limited to:
- Defense and military equipment manufacturing, including uniforms and related devices
- Security services and investigation agencies
- Brokerage companies in real estate
- Drilling and exploration of oil and gas
- Fishery business
- Real estate investment in Madinah and Makkah
- Printing and publication business
- Limited Liability Company (LLC)
- Limited Liability, One-Person Company
- Joint Stock Company
- Foreign Company Branch
The business structures available in Saudi Arabia are:
Limited Liability Company (LLC): A Limited Liability Company, also known as a private limited company, is the most common type of legal entity for setting up a business in Saudi Arabia. It requires a minimum of two shareholders and a maximum of 50 shareholders. Foreigners are able to own 100% of an LLC business in Saudi Arabia through the Ministry of Investment in Saudi Arabia (MISA).
Joint Stock Company (JSC): A joint stock company is a highly regulated company structure in Saudi Arabia that requires a minimum capital of SAR 5–10 million.
Branch office: The foreign company branch in Saudi Arabia must align with the business activities of the parent company. The minimum paid-up capital requirements must be fulfilled and deposited into the Saudi corporate bank account.
The structure you choose depends on the business legal requirements, ownership, and corporate structure of the company.
No, a local sponsor is not required to open a branch office in Saudi Arabia. But to obtain its Commercial Registration Certificate, the manager must obtain a residence permit as part of the incorporation process.
Branch offices can engage in commercial activity within the scope of the license and require a minimum capital investment of $133,100 (500,000 riyals). Also, to obtain its Commercial Registration Certificate, the manager must obtain a residence permit as part of the incorporation process.
The minimum capital requirement varies based on the business activity and structure. The experts at Gatestone Group can assist you in determining the specific capital requirements for your chosen business.
The timeline can vary, but generally, the process takes a few weeks to a few months, depending on the business type, government approvals and procedures, and documentation requirements.
Foreign ownership restrictions in the region have eased in recent years. However, certain sectors may still have limitations, and it is crucial to be aware of industry-specific regulations. Gatestone Group is ready to assist you with all your Saudi Arabia inquiries.
In Saudi Arabia, businesses are subject to two main taxes, which are:
- Value Added Tax (VAT) at the rate of 15% on most goods and services if the annual income is more than SAR 1 million.
- Corporate Income Tax (CIT) at the rate of 20% on net profits.
There are other taxes applied to certain cases, such as Zakat at a rate of 2.5% on assets owned by Muslim-owned businesses and withholding taxes on payments to non-residents.
Zakat is a mandatory charitable contribution for Muslims as per their religion, Islam. It is collected by the Saudi Arabia government on the taxpayer’s net worth. It is applied at a rate of 2.5% of the net worth of the individuals and 2.5% of the total assets of a Muslim-owned business.
Yes, businesses can open corporate bank accounts in Saudi Arabia. The process involves providing the necessary documentation, including business licenses and identification. It is a challenging process and requires expert assistance. Contact Gatestone Group for more information.
Yes, certain industries may have specific regulations and licensing requirements. It’s essential to conduct thorough research or consult with experts to ensure compliance.
Businesses in Saudi Arabia must abide by the labour law, the Labour Regulation, Royal Decree No. M/51 of 23 Sha’ban 1426 Hejra. This includes details about salary, wages, working hours, employment contracts, etc.
Saudisation is a policy encouraging the employment of Saudi nationals. Certain industries and businesses are required to meet Saudization quotas by employing a certain percentage of Saudi citizens. This is managed by the Nitaqat scheme, which applies to private sector companies based on the number of employees, sector, etc.
Yes, Saudi Arabia is strategically located, making it an ideal hub for international trade. Understanding customs regulations and documentation requirements is crucial for engaging in global commerce.
