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People set up or buy a company in Saudi Arabia to trade inside the Kingdom: to contract with Saudi customers, employ staff, import and distribute goods, or host a multinational group’s regional headquarters, a MISA registration category of its own. The usual vehicle is the limited liability company, and every company, Saudi-owned or foreign-owned, sits in one national Commercial Register kept by the Ministry of Commerce.
That single register is the first difference from the UAE, where each emirate and each free zone licenses its own companies. The second is the Ministry of Investment: a foreign shareholder registers there before investing, so the planned activity and the nationality of the owners shape a Saudi company from the outset.
| Form | Who can own it | Capital rule |
|---|---|---|
| Limited liability company | One or more individuals or companies | No legal minimum; the partners declare it paid in full |
| Simplified joint-stock company | One or more shareholders | No legal minimum |
| Joint-stock company | One or more shareholders, with tradable shares | At least SAR 500,000 issued, a quarter paid up at the start |
| Branch of a foreign company | The foreign parent | None set by the Companies Law; branch accounts and an auditor’s report filed within six months of the year-end |
The forms come from the Companies Law of 2022, in force since January 2023. Choosing between them, MISA’s requirements and the order of filings are covered on company formation in Saudi Arabia.
| Tax | Position in 2026 |
|---|---|
| Income tax | 20% of net adjusted profits on the part of a company owned by persons who are neither Saudi nor GCC nationals; 50% to 85% for oil and hydrocarbon production |
| Zakat | 2.5% of the zakat base on the part owned by Saudi and GCC nationals |
| VAT | 15% standard rate since 1 July 2020; registration compulsory above SAR 375,000 of taxable supplies in 12 months, optional from SAR 187,500 |
| Withholding tax on payments abroad | 5% on dividends and interest, 15% on royalties, 5%, 15% or 20% on services, before any treaty relief |
| Special economic zones | 5% income tax for 20 years on qualifying activities of licensed entities in King Abdullah Economic City, Ras Al-Khair and Jazan, subject to conditions |
| Regional headquarters | 0% income tax on eligible headquarters income and 0% withholding on listed payments for a renewable 30 years |
Corporate tax in Saudi Arabia is therefore as much about ownership as about profit: a company with mixed owners pays zakat on its Saudi and GCC share and income tax on the remainder, and a change of shareholders changes the split. There is no stamp duty or share transfer tax, while real estate disposals carry a 5% real estate transaction tax.
Under the Investment Law a foreign investor may invest in any sector open to investment and is treated like a local investor in similar circumstances, once registered with MISA. Two limits remain. Activities on the list of excluded activities need MISA’s prior approval, and the MISA Investor Guide fixes a minimum Saudi share or capital for certain categories, for instance 25% Saudi participation in a professional firm with a Saudi partner, 40% in communications activities, or capital of SAR 30,000,000 for wholly foreign-owned trading. Elsewhere one foreign owner may hold the whole LLC.
The partners appoint one or more managers, from among themselves or from outside. Beneficial owners, the natural persons holding 25% or exercising control, are recorded by the company and in a confidential Ministry of Commerce database open only to authorities. The Anti-Concealment Law closes the old workaround of a Saudi name on the licence: allowing a non-Saudi to trade under another person’s registration or licence is a crime for both sides, and giving a non-Saudi unrestricted control of an entity is a separate violation.
Saudization is the obligation on private employers to employ a share of Saudi nationals, enforced through the Nitaqat programme of the Ministry of Human Resources and Social Development. An entity’s Saudization rate, its average Saudi employees divided by its average Saudi and expatriate employees, is compared with thresholds set for its economic activity and calculated from its total workforce, which places it in one of five ranges: Red, Low Green, Medium Green, High Green or Platinum. Since May 2021 the required rate rises gradually with headcount rather than in fixed size bands.
The range decides what the employer may do for foreign staff. Medium Green, High Green and Platinum entities can apply for new expatriate visas, change occupations and transfer workers in from other employers. Low Green entities can renew existing work permits but not apply for new visas or change occupations. Red entities can do none of these, not even renew a work permit. From 15 April 2026 the ministry counts only employment contracts documented on the Qiwa platform, and a wholly foreign-owned trading company registered with MISA also undertakes to train 30% of its Saudi employees each year.
A Saudi company banks in its own name: the Ministry of Commerce’s market rules forbid running a business through personal accounts. Under SAMA’s account opening rules the bank collects the commercial registration, the articles and the IDs of the manager and signatories, and verifies the owners named in the articles as amended, so a change of shareholders brings a new review.
Form a new company when you are a foreign investor choosing your own activity, capital and partners. The MISA registration applies either way, and the law gives the registrar 10 days to decide a complete commercial registration application. The steps are on company formation in Saudi Arabia.
Buy a ready-made company when an earlier registration date, a licence already issued or government files already open are worth having, bearing in mind that a foreign buyer still registers with MISA and that zakat or income tax follows the new owners. The transfer is explained on ready-made shelf companies in Saudi Arabia, and shelf companies in general in our guide to off-the-shelf companies.
For Saudi Arabia we form new companies and supply existing ones, prepare the papers for a formation or an assignment of interests, handle the Commercial Register filings and help with the bank application. When we know a suitable bank through a working contact, an introduction is possible; the bank decides.
Saudization is the policy of employing Saudi nationals in the private sector, measured by the Nitaqat programme. Each employer’s share of Saudi staff is compared with thresholds for its activity and size, which gives one of five ranges from Red to Platinum. The range decides whether the company can recruit expatriates, renew their work permits or transfer workers in, so it matters from the first foreign hire.
The Ministry of Human Resources and Social Development calculates the range from the employer’s documented Saudi and expatriate staff, and an employer can look it up electronically through the ministry’s Nitaqat services. To estimate a range in advance, the ministry’s published formula sets each range’s minimum rate from the economic activity and the natural logarithm of the total workforce. Since April 2026 only contracts documented on Qiwa count.
20% of net adjusted profits, charged only on the part of a company owned by persons who are neither Saudi nor GCC nationals; that Saudi and GCC part pays zakat at 2.5% of the zakat base instead. Oil and hydrocarbon producers pay 50% to 85%. Lower regimes exist for qualifying activities in three special economic zones, at 5% for 20 years, and for regional headquarters, at 0%.
Yes. VAT is charged at a standard rate of 15%, raised from 5% on 1 July 2020, with a zero rate and exemptions in specific cases. Registration is compulsory once taxable supplies exceed SAR 375,000 over the previous 12 months or are expected to over the next 12, and voluntary from SAR 187,500 of taxable supplies or expenses.
Its counterpart is the special economic zone. ZATCA’s guidance covers four: King Abdullah Economic City, Ras Al-Khair, Jazan and a Cloud Computing zone. Licensed entities with qualifying activities in the first three may get a 5% income tax rate for 20 years, an exemption from withholding tax on qualifying payments abroad and suspension of customs duties and import VAT until goods enter the domestic market.
Deciding whether a Saudi company fits your plans? Tell us the activity and who will own it, and we will explain which registrations apply and whether a ready-made company is available. Telegram and WhatsApp: +48 663 247 166.