The Kingdom of Saudi Arabia is well known for being a regional economic power. It is popular due to its dependency on the oil industry since it has the second-largest amount of oil reserves in the world. Nevertheless, it is a place that welcomes investors from all kinds of industries. Therefore, many of them are looking how to start a business in Saudi Arabia.

Businesspersons that are considering the Company Formation in Saudi Arabia can take advantage of its investor-friendly policies and quick incorporation process.

For this reason, it is crucial to understand the fees and timelines so you can develop your plan to expand your business to this thriving country in the Middle East. It does not matter the size of your business. For example, knowing how to start a small business in Saudi Arabia is very beneficial for new investors. 

Here we have costs for Company Formation in Saudi Arabia or Business setup in Saudi Arabia:

• Minimum capital: to establish a private company in Saudi Arabia, you will need to have a capital of SAR 2 million at minimum. A public company requires a SAR 10 million capital, while a limited liability company in Saudi Arabia requires a SAR 100,000 minimum capital. A General Partnership Company requires a minimum capital of SAR 500,000, and a Partnership Limited by Shares requires a minimum capital of SAR 1 million. For a Sole Proprietorship, you do not need to have a minimum capital.
• Investment license (SAGIA): SAR 2000 (it should be renewed yearly)
• Publication of company name and AOA: SAR 5500
• Registration with the Commercial Registry: registering an LLC costs SAR 3900, while the registration of a Joint Stock Company can cost SAR 60,000. The registration of a Branch Company can cost SAR 3,200 per year
• Membership certificate issued by the Chamber of Commerce: SAR 2000
• Municipality license: the fee will vary depending on the size of the physical office space of the company. It ranges from SAR 500 to SAR 1,500 per year.
• Saudi Post Address (Wassel): the registration for the company’s Saudi post address costs SAR 1,000 per year

When it comes to Company Formation in Saudi Arabia or business setup in Riyadh, you must be aware of all the costs and fees so you do not have to face unexpected expenses. Knowing the steps to Saudi Arabia business setup makes it easier.

People always wonder how to start a business in Saudi Arabia. Foreign investors can carry out the Company Formation in Saudi Arabia or business setup in Riyadh since it is a straightforward process. It offers a thriving marketplace where businesses from across all industries can find support to expand their operations.

Whether you are a GCC citizen or you come from a western country, you can carry out the Company Formation in Saudi Arabia or Setting up a company in saudi Arabia with no trouble.

To understand more about how to start a business in Saudi Arabia, you should know the process for Setting up a company in Saudi Arabia:

Choose the business activity and structure

Before going through the Company Formation in Saudi Arabia or setting up business in Saudi Arabia, you have to consider several business factors. First, you have to consider the industry and type of business you want to incorporate.

What are the activities you are intending to undertake with your Saudi Arabia business setup? In which industry are you planning to work? The answer to these questions will help you determine if it is more suitable to establish your company in the Mainland or a Free Zone, and if it will be best to set up an LLC or a branch.

Get the investment license

You have to apply to the Ministry of Commerce for a commercial registration certificate. This is mandatory if you are a foreigner looking to carry out the Company Formation in Saudi Arabia.

Prepare the documents

Collect all the necessary documentation for incorporating your company. These are the paperwork you need to gather for the Company Formation in Saudi Arabia:

• Memorandum of Association
• Articles of Association
• ID and proof of address for shareholders and directors
• Passport copies for shareholders and directors
• Bank statement letter
• Trade name certificate

Once you submit all of these documents, you will obtain the Issuance of Commercial Registration.

Complete the registration

The final step is to complete the registration process of your company. You will have to visit the General Authority of Zakat and Tax, the Saudi Ministry of Labour and Social Development, and the General Organization for Social Insurance.

Some businesses may have to carry out additional steps, such as opening a corporate bank account to deposit the share capital. This will depend on the type of legal entity chosen by the investors. So know better on How to start small Business in Saudi Arabia.

Company Formation in Saudi Arabia or Saudi Arabia business setup is a process that is not complicated, in fact, it is pretty simple even for foreign investors that may not have any knowledge about the legislation of the country. Subsequently, it is not difficult to find an answer to how to start a small business in Saudi Arabia.

For this reason, the Kingdom of Saudi Arabia is one of the preferred places in the MENA region to conduct business. It has many economic and social advantages for foreign investors and entrepreneurs from all kinds of sectors.

Some of the benefits you can receive by carrying out the Company Formation in Saudi Arabia are the following:

• The business setup in Saudi Arabia is cost-effective and convenient for businesspersons from around the world
• It offers a secure business environment that builds confidence among business owners and customers
• Setting up a company in Saudi Arabia allows investors to enjoy the luxury and quality of its premium infrastructure and social environment
• The Government encourages Company Formation in Saudi Arabia by offering tax support, state-of-the-art facilities, and ease of doing business.
• You can find outstanding commercial spaces and offices equipped with the latest technology, furniture, and amenities.
• With the Company Formation in Saudi Arabia, you get access to international markets due to its strategic location.
• Possibility to trade and carry out commercial transactions with both east and west markets.
• To carry out the Company Formation in Saudi Arabia or Business setup in Saudi Arabia you can choose among the various options of jurisdictions and legal entities available.

To do the business setup in Saudi Arabia you must select among the types of legal entities available. 

The types of legal structures for Company Formation in Saudi Arabia or Setting up a business in Saudi Arabia are the following:

• Sole Proprietorship: it is also known as the Saudi Arabia Establishment. To carry out the Company Formation in Saudi Arabia of this type of legal entity you will only need one owner. However, this type can only be registered by GCC citizens and Saudi nationals.
• Limited Liability Company: It is one of the preferred types of Company Formation in Saudi Arabia. It is mandatory to have a shareholder and a director, and a minimum capital of SAR 100,000.
• General Partnership Company: also known as a joint liability company, this Saudi Arabia Company Formation must be incorporated with at least two partners.
• Partnership Limited by Shares: it must include one joint partner and one dormant partner. The former is liable for the partnerships’ debts while the latter is liable to the extent of his share in the capital.
• Joint Venture: Another common type of legal structure for the Company Formation in Saudi Arabia is the Joint Venture. It is formed by the combination of two or more parties that decide to attain a goal by using their joint resources.
• Joint-Stock Company: Also known as a Public Limited Company, it can have two forms, unlisted or listed. The Company Formation in Saudi Arabia of this type of company requires a minimum of two shareholders and a minimum of three directors.

To carry out the Company Formation in Saudi Arabia or to understand on how to start a small Business in Saudi Arabia you must understand which type of legal entity suits your business best. If you have any doubts, you can ask us for help and our team of consultants will analyze your particular case and offer valuable advice.

LLCs are one of the most common types of businesses. Since it is the preferred choice among investors that want to carry out the Company Formation in Saudi Arabia, it is crucial to understand the entire process to incorporate it.

Here we have the steps for incorporating an LLC for your Saudi Arabia company formation:

Submit the application form to SAGIA

You can carry out the process online or in person at your convenience. This will allow you to obtain the Investment license from the Authority. It is a mandatory document for foreign investors that want to carry out the Company Formation in Saudi Arabia.

Notarization of the documents

To continue with the Company Formation in Saudi Arabia, you must collect the following documents:

• Articles of Association
• SAGIA license
• Signed paperwork by shareholders and directors
• Passport copies for each shareholder
• ID card copies for each shareholder

Once you have gathered the paperwork, you have to complete the notarization process.

Gazette publication

The next step is to pay the fees for the gazette publication of company details. This will include information such as the company name, approval certificates, AoA information, and more.

Open bank account

It is mandatory to open a corporate bank account to comply with the formalities of the Company Formation in Saudi Arabia or business setup in Saudi Arabia. You have to deposit the share capital and it can be useful to pay government fees. Once you have finished the process you can use the account for the financial transactions of your business.

Rent an office

Your business needs to have a corporate address since it is one of the steps for incorporating an LLC in Saudi Arabia. After that, you can obtain the Municipality License.

Commercial certificate and membership registration

The final step is to submit the company paperwork to finish the registration at the Commercial Registry. It is a department of the Ministry of Commerce and Industry. The verification of your company’s documentation should last at least two working days.

After that, you have to complete the membership registration at the Chamber of Commerce. Keep in mind that you have to consider all the fees for this process.

Although undergoing the process for Company Formation in Saudi Arabia can be simple, you may need to have assistance. You can receive help to incorporate your company from start to finish thanks to our hands-on approach.

One of the advantages the Government has given foreign investors wanting to carry out the Company Formation in Saudi Arabia is that the process can be done online. This is thanks to the reforms that Saudi Arabia’s Kingdom’s Vision 2030 has set forth.

To carry out the Company Formation in Saudi Arabia online you have to go through the following steps:

1. Select the trade name for your company. Keep in mind that it must be unique and in accordance with the nature of your business. Moreover, it should follow the regulations of the authorities regarding trade names. Reserve it through the Ministry of Commerce and Industry’s website.
2. Decide the type of business you want to incorporate. The next step in the Company Formation in Saudi Arabia or setting up business in Saudi Arabia should be to determine the legal structure of your corporation. It is important because this will determine the steps you have to go through.
3. Obtain the SAGIA license. You can obtain the Foreign Investment License by applying online. Depending on your type of business you may require to request an additional license.
4. Submit all of the paperwork necessary for the Company Formation in Saudi Arabia to the Unified Center to obtain approval.
5. Notarize the documents that require it.
6. Open the corporate bank account
7. Rent the office space that will help you carry out your operations smoothly.
8. The next step for the Company Formation in Saudi Arabia done online should be the registration in the Commercial Registry.
9. Once you have registered your company, you have to carry out the tax registration at the Department of Zakat and Income Tax.
10. Then, you will have to carry out the social insurance registration. This is done to register both your employer and employees at the General Organisation for Social Insurance (GOSI)

Another additional step you can carry out for your Saudi Arabia company formation is creating a website. This will help you attract potential customers and start working online to offer your services.