Setting up a company in Saudi Arabia as a foreigner has become significantly easier in recent years due to reforms aimed at attracting foreign investment. Here’s a step-by-step guide to help you understand the process, types of entities, requirements, and considerations: For more information please visit Business setup in saudi arabia

✅ 1. Understand the Legal Options for Foreigners

A. Limited Liability Company (LLC)

  • Most common structure.
  • Requires a minimum of 1 and up to 50 shareholders.
  • Foreigners can own 100% of the company in many sectors (subject to Saudi Arabian General Investment Authority approval).

B. Branch Office

  • Set up as a branch of a foreign company.
  • Must engage only in activities identical to the parent company’s.

C. Joint Venture

  • Partnership with a local Saudi entity.
  • May be beneficial in regulated sectors.

D. Representative Office / Technical and Scientific Services Office

  • No commercial activity—mainly for market research or support.

✅ 2. Key Authorities Involved

  • MISA (Ministry of Investment of Saudi Arabia) – previously SAGIA; responsible for issuing foreign investment licenses.
  • MCI (Ministry of Commerce and Investment) – for commercial registration.
  • ZATCA – for tax and zakat registration.
  • Chamber of Commerce – for business licensing.
  • Municipality (Baladiya) – for office/physical address approval.

✅ 3. Requirements to Start

A. Investment License (from MISA)

  • Prepare the following:
    • Business plan.
    • Parent company documents (if applicable).
    • Passport copies of foreign shareholders.
    • Proof of financial capability.
    • Sector-specific compliance (if in regulated industries).
  • Cost: SAR 2,000 to SAR 10,000 depending on sector.

B. Commercial Registration (CR)

  • After MISA license approval, register with MCI.
  • Name reservation and Articles of Association.

C. Office Lease

  • Required to register physical address (no virtual office).
  • Must have lease contract certified via Ejar platform.

D. Capital Requirements

  • Vary by sector. Commonly:
    • LLC: SAR 100,000+
    • Industrial sectors: Up to SAR 1,000,000+
    • No capital deposit needed upfront in some cases.

✅ 4. Taxation & Labor Considerations

  • Corporate Tax: 20% on foreign share of profits.
  • Zakat: 2.5% for Saudi-owned shares.
  • Withholding Tax: On payments to non-residents (5%–20% depending on service).
  • Saudization: Must employ a minimum number of Saudi nationals (varies by industry and size).

✅ 5. Bank Account Opening

  • Open a corporate account in a local bank after receiving CR and Municipality license.
  • Requires:
    • CR and MISA license.
    • Company stamp.
    • Manager’s Iqama or visa.

✅ 6. Hiring & Work Visas

  • Once the company is registered, you can sponsor foreign employees.
  • Apply for Iqama (residence permit) through the Muqeem and Qiwa platforms.

✅ 7. Ongoing Compliance

  • Annual audit and financial statements.
  • GOSI (social insurance) registration.
  • Monthly payroll and tax filings.

📝 Tips

  • Use a local lawyer or business consultant to navigate bureaucracy.
  • Consider free zones like KAEC or NEOM for special incentives.
  • Some sectors like oil, security, and media are restricted or require special approvals.

🧩 Optional: Free Zones (Coming Soon or In Development)

  • NEOM
  • King Abdullah Economic City (KAEC)
  • Red Sea Project

These offer streamlined processes, tax incentives, and 100% foreign ownership.