Saudi Arabia is undergoing a major economic shift thanks to its Vision 2030 plan. The goal is to move away from oil dependency and create a thriving business environment for everyone, including foreign investors. This has made Saudi Arabia one of the fastest-growing economies in the world, with huge opportunities for new businesses.A new law, the Saudi Companies Law of 2022, has made starting a business much simpler and more flexible. This guide will walk you through the most important first step: choosing the right Saudi Arabia Business Setup.
Selecting the right legal entity is the most critical decision you’ll make, as it impacts everything from liability to capital requirements. Saudi law provides several options, each suited for a different type of business.
The LLC is the most popular choice for foreign investors and small-to-medium businesses (SMEs). Its main advantage is that your personal assets are protected, as your liability is limited to your investment in the company. An LLC requires at least one shareholder and one director. While the law doesn’t state a minimum capital, the Ministry of Investment of Saudi Arabia (MISA) sets a minimum based on your business activity, which can be as low as 100,000 SAR for some foreign-owned entities.
This new type of company was created to support the growing startup and venture capital scene. An SJSC is incredibly flexible, with no minimum capital requirement and the ability to be started by just one person. Management is also flexible—it can be run by one or more directors without the need for formal general assemblies.
The JSC is the ideal structure for large corporations that want to raise significant capital from the public, such as through an Initial Public Offering (IPO). This type of company has stricter requirements, including a minimum capital of 500,000 SAR and a board of directors with at least three members.
This is a good option if you already have an existing company and want to enter the Saudi market quickly. A branch operates as a direct extension of its parent company, using the same name and legal status. It is required to have a MISA license and a minimum capital, typically around 500,000 SAR, depending on the business activity.
The RHQ program is a special initiative for large multinational corporations (MNCs) that want to manage their regional operations from Saudi Arabia. This structure comes with major incentives, including a 30-year tax exemption and a 10-year exemption from Saudization, the nationalization program that requires businesses to hire a certain percentage of Saudi citizens.
| Company Type | Minimum Capital Requirement | Shareholders | Board of Directors | Ideal for… |
| LLC | Depends on activity: SAR 100k – SAR 30M+ | 1-50 | Required if > 20 shareholders | SMEs, general business, foreign investors |
| SJSC | None prescribed in AoA | 1+ | Flexible, not mandatory | Startups, venture capital, entrepreneurs |
| JSC | SAR 500,000+ | 1+ | Mandatory, minimum of 3 members | Large enterprises, IPOs, public ventures |
| Foreign Branch | SAR 500,000+ | N/A | Local manager required | MNCs seeking direct market entry |
| RHQ | N/A | N/A | At least 1 director in KSA | MNCs managing regional operations |
LoremSetting up a business in Saudi Arabia takes time, but by following a clear process, you can get it done efficiently. The entire process for a foreign-owned company can take anywhere from a few weeks to a few months.
Your first step is to secure the necessary licenses. You’ll need to define your business activities and then apply for a MISA Investment License. This is a crucial permit for all foreign investors. Once you have this, you can reserve your company name with the Ministry of Commerce (MoC).
Next, you’ll work on the legal documents, like your Articles of Association, which must be drafted in Arabic and notarized. If your parent company is abroad, these documents will also need to be certified by the Saudi Embassy. After this, you can get your Commercial Registration (CR), which is your company’s official legal identity in Saudi Arabia.
With your CR, you can open a local bank account and deposit your company’s capital. This can sometimes be the longest part of the process, often taking several weeks due to bank checks. During this time, you can also complete your final registrations with various government agencies to ensure full compliance and get ready to hire employees.
Once you’re set up, you’ll need to use several online government portals to manage your business and stay compliant.
MISA (Ministry of Investment of Saudi Arabia): Think of MISA as your long-term partner. It oversees foreign investment, provides legal protection for your business, and ensures you follow all regulations.
ZATCA (Zakat, Tax and Customs Authority): This is the tax authority. All foreign-owned companies are subject to a 20% corporate income tax, and most businesses must register for the 15% Value Added Tax (VAT) if their annual revenue exceeds 375,000 SAR. ZATCA is responsible for collecting these taxes and enforcing compliance, including the country’s e-invoicing regulations.
Qiwa & Nitaqat: Qiwa is the central online platform for all things labor and employment. It is where you manage work permits and comply with the Nitaqat program, a national initiative that requires companies to hire a certain percentage of Saudi citizens. Companies are classified into color-coded zones based on their compliance, which can affect your ability to hire foreign workers.
The total cost to start a business varies greatly depending on your company type and activity. While some government fees are relatively low, professional services, office space, and visa costs for employees can add up. The entire process can take two to twelve weeks, but with all the documentation and approvals, a fully operational entity can take up to three to six months to set up.
Starting a business in Saudi Arabia is a big step, but with the new laws and government support, it’s more accessible than ever before. While the process requires careful planning and a good understanding of key government platforms like MISA, ZATCA, and Qiwa, the effort is well worth it. You’ll be joining a rapidly growing economy and positioning your business at the heart of a major global transformation.
