Business Setup Guide for Saudi Arabia

Introduction

Saudi Arabia’s economy is transforming at an unprecedented pace. With Vision 2030 leading the charge, the Kingdom is moving beyond oil to embrace a diversified future built on innovation, tourism, logistics, mining, healthcare, and more.

Now is the time to expand your business and take advantage of Saudi Arabia’s fast-growing investment climate. Whether you are a Saudi national or a foreign investor, understanding the business setup process is key to long-term success.

Choosing the Right Business Structure

Choosing a suitable legal structure is the foundation of your setup journey. Options include:

• Limited Liability Company (LLC) – most popular for SMEs and foreign investors
  
  

• Sole Proprietorship – simple structure for Saudi nationals
  
  

• Joint Stock Company (JSC) – suited for large enterprises and public offerings
  
  

• Branch Office – for foreign companies wishing to operate under the parent entity
  
  

• Representative Office – non-trading, ideal for market research
  
  

Each structure has different rules around ownership, liability, taxes, and Saudization obligations.

Understanding Legal Requirements

Saudi Arabia’s updated Investment Law allows 100% foreign ownership in many sectors, leveling the field between locals and foreigners. To start, you need:

• MISA Investment License (Ministry of Investment Saudi Arabia)
  
  

• Commercial Registration (CR) with Ministry of Commerce
  
  

• Compliance with Nitaqat (Saudization) program
  
  

• Approvals from sector-specific bodies (e.g., real estate, tourism)
  
  

Registration Process: Step-by-Step

1. Reserve your company name online through the Ministry of Commerce
   
   

2. Apply for a MISA license
   
   

3. Draft and notarize the Articles of Association
   
   

4. Register with the Ministry of Commerce to obtain your CR
   
   

5. Open a corporate bank account and deposit capital
   
   

6. Register with ZATCA for tax and VAT
   
   

7. Complete GOSI and municipality registration
   
   

8. Apply for employee visas and Iqama (residency permits)
   
   

Sector-Specific Requirements

Each sector may require extra approvals or capital. Key growth sectors include:

• Real Estate & Construction
  
  

• Tourism & Hospitality
  
  

• Logistics & Supply Chain
  
  

• E-Commerce & ICT
  
  

• Healthcare & Education
  
  

• Renewable Energy & Manufacturing
  
  

Saudization & Labor Compliance

All businesses must comply with the Nitaqat system, which mandates employing Saudi nationals based on company size and activity. You’ll also need:

• Registration with GOSI
  
  

• Work visa quotas via the Qiwa portal
  
  

• Iqama sponsorship and management for expats
  
  

Taxation and Financial Obligations

• Corporate Income Tax (15%) for foreign-owned companies
  
  

• Zakat for wholly Saudi-owned companies
  
  

• VAT (15%) on most goods and services
  
  

• Withholding Tax on cross-border transactions
  
  

• Regular financial reporting and audits required
  
  

Bank Account Setup

To operate in Saudi Arabia, you must open a local bank account:

• Prepare your CR, AoA, and license
  
  

• Choose between Islamic and conventional banking
  
  

• Major banks include Al Rajhi, SNB, Riyad Bank, SABB
  
  

Office Space & Location Considerations

• Choose between mainland or economic zones like King Abdullah Economic City
  
  

• Popular cities: Riyadh, Jeddah, Dammam, NEOM
  
  

• Virtual offices or co-working spaces can be used for initial licensing
  
  

Business Support Services

• Legal advisory and PRO support
  
  

• Market feasibility studies
  
  

• Translation, documentation & attestation
  
  

• Ongoing compliance support
  
  

Common Challenges & Mistakes to Avoid

• Not understanding licensing timelines
  
  

• Underestimating Saudization obligations
  
  

• Poor documentation or lack of Arabic translations
  
  

• Choosing the wrong business structure