Saudi Arabia is rapidly becoming a top choice for business setup due to reforms in Vision 2030. The government offers easier setup processes and tax incentives, boosting both local and foreign investments. By mid-2024, FDI reached SAR 19.44 billion, with a 14% growth in FDI outflows.

With free zones and industrial cities, investors benefit from strong infrastructure and simplified business pathways. This guide covers key steps for navigating Saudi Arabia’s business system, taking advantage of tax benefits, and entering the growing market smoothly..

business-setup-saudia

Free Zones and Industrial Cities in Saudi Arabia

Mainland Company

KAEC

King Abdullah Economic City offers tax exemptions, industrial infrastructure, supporting manufacturing and real estate.

Free Zone Company

NEOM

A futuristic city focused on innovation in technology, renewable energy, and biotech, with advanced infrastructure.

Offshore Company

Jazan City 

Jazan Economic City supports heavy industries like energy and agriculture with duty exemptions and energy access.

Offshore Company

Ras Al Khair

Ras Al Khair Industrial City focuses on mining and petrochemicals, offering streamlined customs and resource access.

Steps to Start a Business Setup in Saudi Arabia

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Conduct Market Research:

Before anything else, research the Saudi market to understand demand, competition, and legal requirements specific to your business activity.

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Choose a Business Activity:

Identify the business activities you wish to engage in, as different activities have unique regulations and licensing requirements in Saudi Arabia.

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Select a Business Structure:

Decide on the most suitable business structure (e.g., LLC, branch office) based on your business goals and ownership preferences.

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Secure Initial Approvals:

For certain business activities, you might need initial approvals from relevant authorities, like the Saudi Arabian Ministry of Investment (MISA).

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Open a Corporate Bank Account in Saudi Arabia:

Research the banks in Saudi Arabia and choose one that aligns with your company’s financial needs, preparing the necessary documents for account opening.

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Prepare a Business Plan:

Develop a detailed business plan outlining your business goals, operational strategy, and financial projections, which may be required for obtaining approvals or funding.

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Find an Office Space:

Choose a physical location for your business operations, as a business address is often needed for the licensing process.

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Reasons to Invest in Saudi Arabia

Double Taxation Treaties

Government-Backed Projects

Strategic Location

Youthful Population Growth

Energy Resource Wealth

Government Contracts Access

Key Licenses for Setting up Business in Saudi Arabia

Technical and Professional Licenses

Needed for specialized fields like law, engineering, and medicine, issued by relevant bodies.

Foreign Investment License

Required for foreign investors, issued by the Ministry of Investment (MISA) based on the business activity.

Municipal License (Baladiya)

Ensures compliance with local health, safety, and zoning rules for physical locations.

Chamber of Commerce Membership

Mandatory for commercial businesses to access services, legal support, and trade activities.

Commercial Registration (CR) Certificate

Essential for legally registering any business, issued by the Ministry of Commerce.

Zakat, Tax, and Customs Registration

Registration with the tax authority (GAZT) for VAT, income tax, and compliance.

Process of Company Formation in KSA

  • Obtain an Investment License:

    Foreign investors need to apply for an investment license from MISA, which grants permission to own and operate a business in Saudi Arabia.

  • Register the Company:

    Submit the required documents, such as Articles of Association and shareholder information, to the Ministry of Commerce to obtain the Commercial Registration (CR) certificate.

  • Draft and Notarize Legal Documents:

    Prepare legal documents, including the company’s Articles of Association, and get them notarized by a certified Saudi notary.

  • Obtain a Business License:

    Depending on the nature of the business, apply for the necessary licenses from relevant authorities (e.g., municipal license, industry-specific permits).

  • Register with the Chamber of Commerce:

    Enroll the company with the local Chamber of Commerce to access various business services and networking opportunities.

  • Tax Registration:

    Register the company with the General Authority of Zakat and Tax (GAZT) for VAT, zakat, and corporate tax purposes.

  • Secure Visas for Foreign Employees:

    If hiring foreign employees, complete the visa and work permit application process through the Ministry of Human Resources and Social Development.

Required Documents for Registering a Company in Saudi Arabia

The specific documents required for business registration in Saudi Arabia depend on the type of business and structure. However, the common documents usually needed include:

  • Company Formation Documents
    Includes Articles of Association (AOA) and Memorandum of Association (MOA) that outline the business purpose, structure, capital, and registered address. These must be notarized.
  • Shareholder Information
    Copies of IDs or passports for all shareholders and directors, along with a notarized Power of Attorney for representatives.
  • Investment License Documents (For Foreign Investors)
    Foreign investors need a license application submitted to MISA with business details and a company profile covering background, finances, and experience.
  • Bank Documents
    Includes a bank letter proving the deposit of the required capital in a Saudi bank under the company’s name.
  • Proof of Business Address
    Requires a lease agreement to confirm the physical location of the business and a municipal license from the local authority approving the premises.
  • Additional Documents for Specific Business Types
    Includes special permits or certificates for fields such as healthcare or law. These should be translated into Arabic and notarized if necessary.

Business Setup Benefits for GCC Nationals

Full Ownership Rights

Full Ownership Rights

GCC nationals can own 100% of their business without the need for a local Saudi partner, unlike other foreign investors who might face restrictions.

Business Structure Options

Business Structure Options

GCC nationals can choose from any business structure, including Limited Liability Companies (LLCs), Joint Stock Companies (JSCs), and Sole Proprietorships, giving them a wide range of options depending on their business needs.

Simplified Process

Simplified Process

With fewer restrictions and streamlined regulations, GCC nationals face fewer barriers when establishing their business, making the process faster and more efficient.

Key Business Structures for Company Formation in Saudi Arabia

Branch Office

Allows foreign companies to operate in Saudi Arabia without a separate legal entity, limited to activities of the parent company.

Holding Company

An LLC or JSC that owns shares in other companies for management control, without engaging directly in business operations.

Joint Venture

A partnership between foreign and local companies for specific projects. Profits and liabilities are shared based on the agreement.

Limited Liability Company (LLC)

Popular with foreign investors, requires one shareholder, limits liability to capital, and allows 100% foreign ownership.

Joint Stock Company (JSC)

For large businesses raising public capital, requires two shareholders and SAR 500,000 for private or SAR 10 million for public JSCs.

Sole Proprietorship

Ideal for individual entrepreneurs who want full control. The owner is personally responsible for company debts.
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Business Setup Consultants in Saudi Arabia

How Riz & Mona Consultancy Can Help?

Riz & Mona Consultancy is renowned as one of the top business setup consultants in Dubai, with over 15 years of experience facilitating a wide range of businesses throughout the UAE. Our deep connections with government officials and key authorities, combined with our extensive expertise in consultancy, streamline the process of establishing your business in Dubai. Additionally, we offer comprehensive financial, legal, and corporate services to support our clients throughout their business endeavors.

We are here to provide comprehensive support for your Business Setup in Saudi Arabia, from preparing your documents to completing the process. Connect with us now to begin your journey with a FREE consultation!

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FAQS

Can a foreigner set up a business in the Kingdom?

Yes, a foreign-owned company can be established in Saudi Arabia through the KSA company formation process, especially with the right licenses in Saudi Arabia.

How long does the company registration process take in Saudi Arabia?

The process for setting up business in Saudi Arabia typically takes 4 to 6 weeks, depending on the company structure and registration requirements.

Which business structures available in Saudi Arabia are restricted for foreigners?

Some types of business, like real estate brokerage and certain retail sectors, have restrictions on foreign-owned company formation in Saudi Arabia.

What incentives does the Saudi government offer for foreign-owned companies?

Saudi Arabia offers incentives like tax exemptions, reduced customs duties, and ease of doing business in Special Economic Zones (SEZs) to attract foreign investors.

Do I need a local business sponsor to register a company in Saudi Arabia?

No, the business setup process allows foreign-owned companies to form a company in Saudi through MISA without needing a local sponsor.

What are the main steps to start a business setup in KSA?

Key steps include company registration, obtaining licenses in Saudi Arabia, and setting up a corporate bank account in Saudi Arabian leading banks.

Are there tax exemptions for new companies in the Saudi market?

Yes, new companies established in Saudi Arabia may receive tax holidays and VAT exemptions, depending on the company structure and location.

How can I open a corporate bank account in Saudi Arabia?

To open a corporate bank account in Saudi, you need your company registration certificate, initial company documents, and proof of business formation.