- →
-
Contact Form
-
Company formation in Saudi Arabia means entering a company in the Commercial Register of the Ministry of Commerce and, whenever a shareholder is foreign, registering that investor with the Ministry of Investment (MISA) first. Unlike the UAE, where each emirate and each free zone licenses its own companies, Saudi Arabia keeps one national register for the whole Kingdom, and since the new Commercial Register Law took effect in April 2025 a single registration covers all of a company’s activities. Business setup in Saudi Arabia, company registration in KSA and registering a company in Saudi Arabia all describe the same sequence: pick the activity and the legal form, clear MISA where a foreign owner is involved, file the articles and the registration electronically, then open the tax, labour and social insurance files.
Two statutes frame the process: the Companies Law (Royal Decree M/132), in force since January 2023, and the Investment Law (Royal Decree M/19), which took effect in 2025 and promises local and foreign investors equal treatment in similar circumstances.
The Companies Law offers five forms: general partnership, limited partnership, joint-stock company, simplified joint-stock company and limited liability company. For an operating, service or holding company the real choice is between the last three.
| Question | Limited liability company | Joint-stock company | Simplified joint-stock company |
|---|---|---|---|
| Founders | One or more natural or legal persons; a single owner is allowed (Article 157) | One or more natural or legal persons (Article 58) | One or more; a single shareholder is allowed (Article 150) |
| Capital set by the Companies Law | No minimum; the partners fix it and acknowledge it fully paid (Articles 158 and 174) | Issued capital of at least SAR 500,000, a quarter paid on incorporation (Article 59) | No minimum; the joint-stock minimum does not apply (Article 139) |
| Ownership units | Interests of equal value that cannot be traded | Tradable shares | Shares, with issued and paid-up capital stated in the articles |
| Constitution | Articles of incorporation, or articles of association for a single owner | Articles of association | Articles of association |
| Management | One or more managers, partners or outsiders (Article 160) | Board of directors | President, manager or board, as the articles provide |
For a company with a few owners the LLC is the simplest vehicle: no statutory capital, one owner permitted and managers who need not be partners. Its articles name every partner and the split of the capital, so each later change of partners is an amendment registered with the Commercial Register. Whatever the form, the trade name must include it and may be in Arabic or another language, and the articles are drawn up in Arabic, optionally with a translation, on templates the Ministry of Commerce publishes for every form (Articles 5 and 7).
People still search for a MISA licence, but under the Investment Law a foreign investor, a company or an individual, registers with the Ministry of Investment before engaging in any investment (Article 7), and MISA’s own summary says the law replaced licensing procedures with registration, which is updated every year (Implementing Regulations, Article 13).
MISA’s Investor Guide (13th edition, March 2026) lists what a regular registration needs: the foreign partner’s commercial registration certified by the Saudi Embassy, with the parent company’s registration where its nationality differs; that partner’s financial statements for the last fiscal year, authenticated by the Saudi Embassy; and the conditions attached to the chosen activity. Holders of the Special Residency Permit are spared those document requirements. A corporate applicant also discloses its owners, controllers or ultimate beneficial owner (Regulations, Article 11). The regulations require MISA to notify the applicant within 10 working days of all requirements being met, the same period its guide gives as the processing time.
Activities on the list of excluded activities, issued by the Standing Ministerial Committee for Examination of Foreign Investments and published by MISA, need the ministry’s approval before a foreign investor starts. Investing without registration is treated as a serious violation, which can lead to a fine of up to 300,000 riyals and cancellation of the registration.
Beyond the excluded list, the Investor Guide sets minimum Saudi participation or capital only for the categories it names. The ones a new company most often meets:
| Activity | Minimum Saudi share | Minimum capital | Other conditions in the guide |
|---|---|---|---|
| Trading with a Saudi partner | 25% | SAR 26,666,667 | None listed |
| Trading, wholly foreign-owned | None | SAR 30,000,000 | Presence in at least 3 regional or global markets; training 30% of Saudi employees every year, localisation targets and a five-year investment commitment |
| Communications activities | 40% | Not set | None listed |
| Supportive communications activities | 30% | Not set | None listed |
| Professional activities with a Saudi partner | 25% | Not set | Both partners licensed in the same field; a non-professional partner holds at most 30% |
| Engineering consulting, wholly foreign-owned | None | Not set | Presence in 4 countries and at least 10 years of experience |
| Legal services, wholly foreign-owned | None | Not set | Approval letter from the Ministry of Justice |
For activities the guide does not name, it sets neither a Saudi share nor a capital, so outside the excluded list a single foreign owner can hold all of an LLC. Trading is the costly exception: a foreign-owned company that intends to import and sell goods meets the trading conditions above, which is why the activity is settled before any document is drafted.
| Step | What happens | Basis |
|---|---|---|
| 1. Activity and form | The activity is chosen from the ISIC4 classification MISA uses, then the legal form; together they decide the MISA conditions and any sector licence | Investor Guide; Companies Law, Article 4 |
| 2. MISA registration | Foreign investors only: online application with embassy-certified documents and the activity requirements | Investment Law, Article 7 |
| 3. Trade name and articles | A name that includes the legal form; articles in Arabic and in writing, for which the ministry publishes templates | Companies Law, Articles 5, 7 and 8 |
| 4. Commercial registration | Electronic application through the Saudi Business Center (business.sa) stating the name, form, capital, managers and their powers and the principal place of business; the registrar decides a complete application within 10 days | Commercial Register Law, Articles 6 to 8 |
| 5. Legal personality | The company exists from registration and operates once any licence its activity needs has been issued by the competent authority | Companies Law, Articles 9 and 10 |
| 6. Government files | Entity file with the Ministry of Human Resources and Social Development, zakat and tax registration with ZATCA, GOSI registration, national address with Saudi Post and chamber of commerce registration | Ministry of Commerce start page |
| 7. Bank account | Opened in the company’s name with the registration and the articles | SAMA Account Opening Rules |
A rejection must be reasoned and can be appealed to the Ministry of Commerce within 60 days (Companies Law, Article 6). Papers signed abroad, such as a parent company’s resolutions and registration, are certified or authenticated by the Saudi Embassy for MISA, so it pays to have names, numbers and dates identical across every document before the first filing.
| Obligation | Rule |
|---|---|
| Zakat | 2.5% of the zakat base on the share held by Saudi and GCC nationals; registration with ZATCA before the end of the first fiscal year; return and payment within 120 days of the year-end |
| Income tax | 20% of net adjusted profits on the share held by other foreign owners; registration before the end of the first fiscal year; return and payment within 120 days after the year-end |
| Withholding tax | 5% on dividends and interest paid abroad, 15% on royalties, 5%, 15% or 20% on services by type, unless a treaty lowers it |
| VAT | 15% standard rate; compulsory registration once taxable supplies exceed SAR 375,000 over 12 months or are expected to; voluntary from SAR 187,500 |
| Commercial register | Data confirmed electronically every year; changes recorded within 15 days; a confirmation 90 days late suspends the registration and every licence issued under it |
| MISA | Annual update of the investor registration |
| Audit | A licensed auditor, unless the company counts as micro or small and none of the exceptions of Article 19 applies, such as being a subsidiary of a larger company |
| Beneficial owners | A register of the natural persons with 25% or control, disclosed to the Ministry of Commerce with incorporation and the annual confirmation |
Once the company hires, the Nitaqat programme of the Ministry of Human Resources and Social Development sets the Saudization rate expected for its activity and headcount, and its range, from Red to Platinum, decides whether it can obtain visas and work permits for expatriates. Since 15 April 2026 only contracts documented on the Qiwa platform count. The ranges are explained in our Saudi Arabia company guide.
Registering the company in a Saudi acquaintance’s name to avoid MISA’s conditions is not a lawful alternative. Under the Anti-Concealment Law, letting a non-Saudi carry on an unlicensed economic activity through one’s own name, licence or commercial registration is an offence for both people, and the Ministry of Commerce’s market rules forbid giving a non-Saudi tools for complete control of an entity. A foreign owner holds the shares openly, registered with MISA.
SAMA’s account opening rules list what a Saudi bank collects from a resident company: the commercial registration, the articles with their appendices, the identity of the responsible manager, the signatories’ authority and IDs, and verification of the owners named in the articles. Business then runs through that account: the Ministry of Commerce rules out personal accounts for company transactions.
An existing company brings what a new one cannot: an earlier registration date, a trade name already held, government files already open and, where issued, a licence for its activity. It does not spare a foreign buyer the MISA registration, which applies to acquiring interests just as it does to founding, with the same activity conditions. If an existing registration matters to you, read about ready-made shelf companies in Saudi Arabia; the concept in general is set out in our guide to off-the-shelf companies.
Our part in a Saudi formation: we can form a new company or offer an existing one, draft the articles, transfer papers and Commercial Register filings, and help assemble the bank application. Where we know a suitable bank through a working contact we can introduce you to it, and the account decision stays with the bank.
Yes. The Investment Law lets a foreign investor invest in any activity open to investment once registered with the Ministry of Investment. A single foreign owner may hold all of an LLC unless the activity is on the excluded list or MISA’s Investor Guide sets a Saudi share or capital for it, as it does for trading, communications and professional services. After MISA, the company is registered with the Ministry of Commerce like any other.
Not a licence any more. The Investment Law that took effect in 2025 replaced licensing with registration: a foreign investor registers with the Ministry of Investment before investing and updates that registration every year. Activities on the excluded list still need MISA’s prior approval, and the activity conditions in the Investor Guide, such as the capital required for trading, continue to apply.
The Commercial Register Law gives the registrar 10 days to decide a complete application, and MISA’s regulations give it 10 working days to notify an investor registration once every requirement is met. Embassy-certified documents, sector licences and the bank account fall outside those periods, so the overall time depends mainly on the documents and the activity.
The Companies Law sets none for an LLC: the partners fix the capital in the articles and acknowledge it fully paid. A joint-stock company needs issued capital of at least SAR 500,000, a quarter paid on incorporation, while a simplified joint-stock company has no minimum. Separately, MISA sets capital for some foreign-owned activities, such as SAR 30,000,000 for a wholly foreign-owned trading company.
The commercial registration is the company’s core registration, and under Article 10 of the Companies Law a company carries on its activity once registered and holding any licence that activity requires from the competent authority, such as a sector regulator. A foreign shareholder registers with MISA before either step, and staff can be hired once the labour, social insurance and zakat files are open.
Yes. Article 157 of the Companies Law allows an LLC formed by a single natural or legal person, or one whose interests have all passed to one person. That owner exercises the powers of the manager and the general assembly, records decisions in writing in a register kept at the company, and may appoint one or more managers. A simplified joint-stock company may also have a single shareholder.
Planning a Saudi company and unsure whether your activity falls under MISA’s special conditions? Send us the activity and the intended shareholders, and we will set out the legal form, the registrations and the documents a formation would involve. Telegram and WhatsApp reach us on +48 663 247 166.