The Kingdom of Saudi Arabia (KSA) is a rapidly growing market, making a KSA business setup an attractive option for foreign investors. The government’s Vision 2030 has created a more businessfriendly environment, offering 100% foreign ownership in many sectors. Navigating the legal and administrative landscape requires a clear understanding of key procedures.
Key Steps for Your KSA Business Setup
- 1Choose Your Business Structure: The most common structures include a Limited Liability Company (LLC) or a Branch of a Foreign Company. The choice depends on your business activity and long-term goals.
- 2Obtain an Investment License: The first formal step is to secure a license from the Ministry of Investment of Saudi Arabia (MISA), formerly SAGIA. This step is not applicable for GCC citizens or companies which are 100% owned by GCC citizens.
- 3Secure Commercial Registration (CR): Once you have the MISA license, you will apply to the Ministry of Commerce to obtain your Commercial Registration, which is your company's official legal identity.
- 3Secure Commercial Registration (CR): Once you have the MISA license, you will apply to the Ministry of Commerce to obtain your Commercial Registration, which is your company's official legal identity.
- 4Register with Government Authorities: This includes registration with the General Organization for Social Insurance (GOSI), the Ministry of Labor, and the Zakat, Tax, and Customs Authority (ZATCA).
The Iqama: Your Residence Permit
The iqama in Saudi Arabia is a mandatory residence permit for all expatriates living and working in the Kingdom. It is a vital document that serves as your official identification and proof of legal status. Your employer or a local sponsor must apply for and secure your iqama.
Without a valid iqama, you will not be able to open a bank account, rent property, or access essential services. For business owners, the iqama for the general manager is a crucial component of the company setup process and is required to complete final compliance steps.
VAT Registration in KSA
Saudi Arabia applies a Value Added Tax (VAT) on most goods and services at a standard rate of 15%. VAT registration in KSA is mandatory for all businesses with annual revenues from taxable supplies exceeding SAR 375,000. Even if your revenue falls below this threshold, you can voluntarily register if your taxable supplies exceed SAR 187,500.
The registration process is handled through the Zakat, Tax and Customs Authority (ZATCA) website and typically requires your commercial registration number and bank account details.