April 04, 2025

How to set up a Company in Saudi Arabia

In the radically transforming business landscape of Saudi Arabia, the young and ambitious entrepreneurs are seizing the opportunity, driven by an unrelenting hunger for innovation and progress. Saudi Arabia stands as a thriving hub for visionary minds looking to disrupt industries and redefine success. Apart from that, the vision 2030 serves as a major attraction for entrepreneurs offering them multiple possibilities in vast number of sectors. This blogpost offers an in-depth overview of legal steps required for company setup in Saudi Arabia and advantages and difficulties navigated in the journey

Setting Up a Company in Saudi Arabia

KSA is embracing a change making it a perfect location for businesses to flourish. The vision 2030 aims to reduce dependence on oil to diversify economy and this has resulted in major investment opportunities in the sector of technology, energy, real estate, healthcare and tourism sectors. Likewise, Kingdom’s strategic location, government support programs and incentives has captured the interest of many local and foreign investors. However, at the same time business at times find it demanding to setup a company in KSA, because of its legal requirements, Saudization scheme and other restrictions. This process can be streamlined by adopting a step-by-step methodology or hiring local experts to make you better understand and establish company without any legal or operational challenges. The first and the foremost step is to choose your business structure. Some of the main business entities include,

Limited Liability Company (LLC): Best suited for small and Medium Enterprises with single or limited employees
Joint Stock Company (JSC): Common for Large scale enterprises looking to expand their capital
Sole Proprietorship: Suitable for company owned by a single person.
Branch of a Foreign Company: Opted by foreign investors looking to setup a company in KSA
Representative Office: For non-commercial office and market research activities.
Limited Partnership: Includes both general and limited partners.

Once you picked the best-fitted business structure, its now time to move towards legal procedures for a company setup in Saudi Arabia. You must advance systematically to assure a seamless outcome.

Legal steps for Company Setup in Saudi Arabia

Registering a Business Name

Companies must select a unique business name that should also fulfil the legal guidelines and comply with regulations. This name must be registered with Ministry of Commerce.

Create the AOA and MOA

It is crucial to prepare the Articles of Association (AOA) and Memorandum of Association (MOA) with a basic outline of company’s activities, structure, and governance. A public notary or an electronic service must authenticate them.

Investment License for Foreign Investors

For international businesses looking to operate in KSA must obtain an investment license from Ministry of Investment of Saudi Arabia (MISA). It is mandatory for all foreign entities.

Register with the MOC and COC

After compiling all the necessary documents including investment license MOA and AOA, businesses should register with Member of Commerce and Chamber of Commerce. After approval they will get a Commercial Registration (CR) which will facilitate their business operations and networking.

Get all the Necessary Legal Permits

For specific businesses you might need additional approvals, such as from the Ministry of Health, Saudi Food and Drug Authority (SFDA), or Saudi Central Bank (SAMA) depending on your business type.

Register for Taxation

Registering for taxation is another essential step for VAT filings and Tax compliance. Companies should register with Zakat, Tax, and Customs Authority (ZATCA) and register for VAT if their annual profit is more than SAR 375,000.

Get a Corporate Bank Account

Corporate bank account is a must for any financial business transactions. There are many top-tier banks operating in KSA that offer corporate bank account but they must ask for CR, AOA, MOA, and the owner’s identification.

Register with GOSI

Businesses must register with General Organization for Social Insurance (GOSI) before hiring the employees to make certain that they offer social insurance and benefits to employees as per the labor laws.

Get Work Visas for Employees

Now is the time to built up a team, for that you need to register with Ministry of Human Resources and Social Development (HRSD). Foreign employees should necessarily get work visa from Ministry of Foreign Affairs (MOFA).

Cost of Business Setup

Launching a business in KSA might demand a significant financial investment, but to have a brief overview of estimated cost of business setup in Saudi Arabia, we will offer a guide on how you can calculate the entire amount.

Business registration fee is approximately SAR 500–2,000
SAGIA/MISA investment license will cost around SAR 2000-10,000
Office rent and utilities depends on the area and your requirements.
If your hiring non-Saudi employees you will have bare their visa cost.
Employees Salaries depends on your business size, but it must fulfil legal laws.
Compliance and legal fee should also be included in the budget.

Apart from that you need to understand your business activities, their expenses and tax deductions to have a clear idea of your budget plan. Creating a monetary plan is pivotal to ensure maximum financial utilization and prevent any capital loss.

Benefits of Establishing a Company in Saudi Arabia

The economic policies of KSA have made it one of the friendliest countries for a company setup in the Middle East. Let’s have a look at what makes the Kingdom a prime choice for business and investment:

KSA offers 100% foreign ownership which minimizes the need of any local sponsorship
Positioned at a strategic location between Asia, Europe, and Africa, Saudi Arabia serves as a gateway for global trade.
The highly expanding economy makes it a prominent and rewarding location for investment in technology, manufacturing, renewable energy, and tourism.
Government’s welcoming and investor appropriate regulations and tax incentives makes it easier for a company setup in Saudi Arabia.
Mega projects like NEOM, the Red Sea Project, and Vision 2030 initiatives deliver unique opportunities for enterprises looking to grow in a dynamic market.

Legal Complexities in Starting a Business in KSA

Initiating a company in KSA may come with exciting and fruitful possibilities. However oftentimes, businesses find some complexities as a major stumbling block in the progress. Here are some of the reasons why,

Compliance and Regulatory accounting hurdles such as licensing, permits, and approvals from various government entities.
The Saudization (Nitaqat Program) which makes nationalization quotas mandatory, which demands a specific percentage fixed for of Saudi employees.
Market Entry Costs can be high for some businesses to setup operations, securing office space, and adhering to regulatory fees.
The growing competition can be challenging to thrive and require a thorough planning to dominate the market.
Compliance with corporate tax, Zakat, and VAT regulation can be intricate for non-Saudis particularly.

It is obligatory to have a detailed market research and an in-depth understanding of KSA regulatory environment before a company setup in Saudi Arabia. Local partners may also offer a great source of help in simplifying the process.

How SS&CO can Transform your Vison into Reality

Although Saudi Arabia’s thriving economy and prime location makes it a foremost choice for a business setup. Yet, the legal hurdles and operational challenges can make the process overwhelming. This is where we step in!

Why SS&CO?

Expert Guidance: Our local Specialists are familiar with Saudi Business regulations which makes your business setup journey smooth.
Hassle-Free Setup: We look after the legal framework and paperwork so that you can freely focus on core business activities.
Tailored Solutions: We understand that every business is unique hence we offer customized plans and packages that are not just economical but efficient.
Beyond Setup Support: From visa processing to company administration and regulatory accounting, SS&CO is with you in every step of the way.

Let SS&CO turn obstacles into opportunities—start your business in Saudi Arabia with confidence!

Blog