Saudi Arabia, one of the most developed nations in the Gulf region, is introducing many changes in its policies, aiming to attract foreign investors. From simplifying the business setup process to opening new sectors, the KSA is implementing many efforts to achieve its goals under Saudi Arabia’s Vision 2030 plan. Visionary entrepreneurs and strategic business owners can secure excellent benefits with company formation in Saudi Arabia, as the government is consistently launching new policies to make business operations easier within the region.
With expert support from Express Business Service, the most trusted provider of company formation Saudi Arabia services, you can make your dream of building your business empire in KSA a reality. Our team has great experience and in-depth knowledge about the business opportunities, compliance requirements, and growing market trends. We handle the company setup process in KSA for our clients from start to end, ensuring they don’t have to worry about anything, so that they can completely focus on their business expansion.
Company formation in Saudi Arabia is a profitable investment opportunity for foreign investors. However, they need to follow a step-by-step process to secure a successful company setup in KSA, and here is the detailed information about this process:
1. Prepare Legal Documents in Home Country
The first step in the company registration in Saudi Arabia is to prepare all requested personal and business legal documents, like proof of identification, a business plan, proof of capital, etc. Some additional documents that need to be submitted for initial approval are articles of incorporation and a certificate that proves your experience in the field. These documents need to be approved by the Saudi embassy and the MOFA. Once they are approved, they need to be translated into Arabic, and this step is completed within 3 to 6 working days.
2. Apply for Foreign Investment License (MISA)
The next step is to submit the approved documents to obtain a MISA foreign investment license. While submitting the documents, you also need to select a business activity. Obtaining this license is a necessity to further proceed with the company formation in Saudi Arabia. This step is usually completed within 3 to 5 working days.
3. Register Company in Ministry of Commerce (MOC)
After obtaining the MISA license, you need to register your company with MOC, and for successful registration, you need to provide investor details, AOA, and meet other formalities. In this step, you also need to draft the AOA, ensure it complies with all local laws, and get these documents approved and certified. Moreover, you need to decide and reserve a trade name that complies with the nation’s naming policies. The authority will review the registration application and documents, and then issue a Commercial Registration (CR) certificate, which serves as a company’s legal identity in KSA.
4. Rent a Physical Office or Shop
The next step in the company registration process in Saudi Arabia is to rent a suitable office, depending on your business activities. You can consider factors, like location, size, and facilities provided, when choosing a place to rent for your business in KSA. Once you select a physical office, proceed with preparing and registering a valid commercial lease contract on the relevant Ejar platform.
5. Open a Corporate Bank Account
Opening a corporate bank account in a local bank is a necessity when setting up a company in Saudi Arabia. Some popular bank options among foreign investors are SNB, Al Rajhi Bank. You need to submit requested documents like a CR and MISA license to open a corporate bank account, and after verification, you need to deposit the required capital.
6. Register with ZATCA (Tax Authority)
After completing the bank account opening process, proceed with registering your business with ZATCA , the Saudi Arabian tax authority, which will offer your business recognition for tax purposes. If your business is eligible for VAT registration, you need to apply and secure a VAT certificate, as this is mandatory to legally collect and pay VAT for your products or services in the UAE. Registering with ZATCA during company setup in KSA is a necessity, and maintaining your business compliance with local tax laws.
7. Register with the Qiwa Platform (HR Ministry)
The next step is to register your company on the Qiwa platform which will help you secure a valid work permit license, called Ruqsa Amal. It is required to start legal operations in Saudi Arabia. Once this work permit is approved, you need to apply for work visas for your employees. Moreover, Qiwa also helps you to manage your employee records and maintain compliance with Saudization policies.
8. Register in the Balady Platform (Municipality)
After this, you need to apply for a municipal operating license for your office or shop on the Balady platform, which is managed by the local authority. To successfully obtain this license, you need to provide documents, including a lease, a location map, a CR, and others.
9. Issue Investor Work Visa (if outside Saudi Arabia)
If you’re handling the process of company registration in Saudi Arabia from outside the country, you need to first secure a visa authorization number. This number can be secured by applying through the Qiwa platform. After getting this number, complete the visa application on the Enjaz platform. Lastly, you need to send visa authorization to a Saudi embassy in your home country and get your work visa stamped.
10. Enter Saudi Arabia and Finalize Iqama
After that, you can enter Saudi Arabia and take the medical test and undergo biometric fingerprinting. Then complete the further procedure to secure a legal residency permit (Iqama) through the Muqeem or Absher platform. After entering all the details, you need to pay the required fees and issue insurance. Once your Saudi residency visa is approved, you can’t live outside the country for more than 6 months. If you stay outside for over 6 months, your residency will be automatically cancelled.
11. Hiring Employees
The last step in the company registration in Saudi Arabia is to register an employment contract through the Qiwa platform. You can also use this platform to apply for work visas for your employees if you are hiring foreign nationals. Once they arrive in KSA, they also need to undergo medical tests, secure insurance, and secure an iqama through Muqeem.
Family Sponsorship (Wife, Children, Parents) Requirements
The best part about company formation in Saudi Arabia is that it makes foreign investors automatically eligible for a valid Iqama or residency. Moreover, business owners and foreign employees with valid iqamas can sponsor visas for their family members, and Express Business Service can help them with this. These requirements need to be satisfied:
- The first requirement to take advantage of family sponsorship with company formation in KSA is the availability of a sponsor (investor or employee) with a valid iqama.
- If the sponsor is an employee, the monthly salary must be at least SAR 3,000 per month to be an eligible sponsor.
- Only employees with a professional job title can sponsor their family members’ visas, as general labor or service positions are not permitted.
- Applicants under this category need to provide documents like a marriage or birth certificate and housing proof to confirm their relationship with the sponsor.
- Applicants applying under this category need to follow some simple steps on the Absher or Enjaz platform.
- Apart from submitting documents and providing required information, you need to pay fees ranging between SAR 2,500 and 4,000, which include visa, iqama, and insurance charges.
- Parents can only visit through a visit visa, which is renewable.
- Valid iqama holders cannot sponsor their siblings’ visas, except in special cases.
Who Does What: Major Saudi Platforms and Authorities
1. Ministry of Investment (MISA)
Primarily, this authority is responsible for issuing the initial investment license that allows foreign companies and investors to start a business in KSA. MISA evaluates the investment applications from foreign investors to make sure their values and goals align with the nation’s objectives, including technological development and creating new job opportunities. Moreover, this authority simplifies the company formation process by offering foreign investors the required support.
2. Ministry of Commerce (MOC)
This authority handles the business registration and issues CR, which is mandatory to secure by all companies that want to operate legally in Saudi Arabia. MoC makes sure that all businesses getting CR certificates follow the strict legal frameworks, trade laws, and other national laws. Moreover, it also overviews the issuance, renewal, and modification of commercial licenses. This authority works together with MISA and ZATCA to simplify the company registration in Saudi Arabia for foreign investors. Its portal offers services for trade name registration and AOA verification.
3. Qiwa Platform
This platform combines various government services related to employment and human resources, making it easier for foreign companies and investors to navigate company registration in the Saudi business market. This platform automates many processes, including contract management, work permits, visa issuance, etc. Moreover, it helps them stay updated with changed labor laws and regulations, assisting them in maintaining compliance with Saudization policies. Not only business owners, but it also helps their employees, as they can easily verify their details and contract terms using this platform. It serves as a connection point with employers, employees, and government agencies, helping them access important information and reduce potential disputes.
4. Muqeem Platform
This digital platform helps in managing the residency status of foreign employees and offers services for issuance and renewal of iqamas, handles exit and re-entry visas, and helps businesses maintain compliance with Saudi residency regulations. This platform also reduces the paperwork overload related to managing foreign employees, helping companies to focus on core business operations. Moreover, it integrates with other platforms like Qiwa that handle other aspects of company formation Saudi Arabia.
5. Absher Platform
This is the primary platform used to verify individuals involved in the process of company formation in Saudi Arabia, including owners, employees, and sponsors. It also assists with many company-related tasks, like issuance and renewal of residency permits, handles transfer sponsorship, and manages visa processes. Even though it is not directly responsible for company formation, it helps in completing necessary steps like document processing and verification.
6. ZATCA Authority
All businesses operating in Saudi Arabia need to register with this authority for ZAKAT, VAT, and corporate tax purposes. It oversees and makes sure all businesses maintain complete financial records and timely file accurate tax returns. The primary responsibility of this authority is to implement, control, and collect various taxes in the country. Moreover, it also regulates the entry and exit of goods, and maintains compliance with customs laws. It has the authority to audit businesses to verify they are accurately reporting their incomes, expenses, and taxes.
7. Balady Platform
The primary role of this platform is to grant initial approvals to new businesses, helping them make a smooth entry into the Saudi Arabian market. It also helps companies in checking and reserving a desired business name. Moreover, it also has an important role in handling the CR issuance process.
Business Activities in Saudi Arabia and Their Setup Requirements
Here are the details of the three common business activities and their setup requirements for foreign investors in Saudi Arabia:
- Setup Requirements- Company registration in Saudi Arabia for a service-based company is relatively simple. You need to apply for a MISA investment license, which doesn’t have a minimum capital requirement in most cases. Then you need to secure an office lease or Ejari contract and an experience or qualification certificate in the related field. Even if you don’t have a foreign parent company, you can start a service company in KSA. Additional requirements are to secure a CR from MoC, a municipal license through the Balady platform, registration with ZATCA, Qiwa, and Muqeem.
- Estimated Costs- The total estimated cost for a service company setup in Saudi Arabia ranges from SAR 35,000 to SAR 80,000, depending on your office location and professional setup. This includes fees for the MISA license (SAR 2,000 annually), CR (SAR 1,200 to 1,500), lease (SAR 15,000 to 40,000), setup costs like legal and tech (SAR 10,000 to 20,000), and Iqama or work permits per person (SAR 10,000 to 13,000).
- Setup Requirements- To start a trading company in Saudi Arabia, you’ll need a stricter MISA trading license. Another requirement is that your foreign company must operate in at least three different countries and have a global capital of SAR 30 million. You’ll also need a physical office or showroom (virtual offices aren’t accepted), a CR from the Ministry of Commerce, and registration with ZATCA for VAT. You must also complete registrations with Qiwa and Muqeem. Moreover, it is mandatory to have a warehouse or showroom depending on your business model.
- Estimated Costs- The estimated cost for company registration in Saudi Arabia for a trading company ranges from SAR 70,000 to SAR 150,000, which does not include global capital requirements. This covers MISA (SAR 2,000 annually) and CR fees (SAR 2,000), office or showroom lease (SAR 25,000 to 100,000 annually), legal/admin setup (SAR 20,000 to 30,000), customs registration (SAR 3,000 to 5,000), and Iqama, work permit, and insurance per person (SAR 10,000 to 13,000).
- Setup Requirements- If you’re planning to a manufacturing factory in Saudi Arabia, you must first need to obtain a MISA industrial license along with approval from the Ministry of Industry. You’ll also need to lease or own industrial land and secure safety and environmental clearances from Civil Defense and SFDA authorities (especially for food production). Other requirements include CR, a municipal license from Balady, and customs registration if you’re importing raw materials or machinery. Capital requirements depend heavily on the type of manufacturing you plan to do.
- Estimated Costs- A manufacturing company formation in Saudi Arabia is the most expensive option, with estimated startup costs ranging from SAR 300,000 to SAR 700,000 or more. This includes MISA license fees (SAR 2,000), industrial license fees (SAR 5,000 to 15,000), factory construction or leasing (SAR 200,000 to 500,000 and more), equipment purchases, legal paperwork and CR fees (SAR 5,000 to 10,000), and Iqama and labor permits per person (SAR 10,000 to 13,000).
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Benefits of Company Formation in Saudi Arabia
Company formation in Saudi Arabia not only helps you expand your business in new markets but also secures many other exclusive benefits, like securing long-term residency in one of the most developed nations of the Gulf region. Here is why company formation Saudi Arabia is a promising investment:
Advantageous Location
The main benefit of starting a business in KSA is its advantageous location, which offers a great opportunity to expand business in global markets. It only provides access to new markets and consumer bases, but also provides long-term residency benefits.
Diversifying Economy
Another reason that makes company formation a profitable investment is its expanding and diversifying economy. Under the Vision 2030 plan, the Saudi government is making active efforts to develop new sectors and end the dependence of economic stability on the oil sector.
Government Support
The nation’s government is supporting foreign investors and business owners with excellent incentives and tax breaks, making company formation in Saudi Arabia more convenient and promising for them.
Business-Friendly Policies
The recent changes in the policies have made it easier for foreigners to start and run a successful business in Saudi Arabia. Most of the sectors offer 100% foreign ownership without the need for local sponsors. Moreover, the benefits, like favorable tax rates and world-class infrastructure facilities, make setting up a company in Saudi Arabia a smart move.
Business Setup In Saudi Arabia With Express Service
Launching your business in Saudi Arabia is a strategic move in a thriving market.
Legal Business Structures for Foreigners in Saudi Arabia
Foreign investors are provided with multiple legal business structure options for company registration in Saudi Arabia. Here are the common legal business structure options available, and Express Business Service can help you set up a business in KSA with any of them:
Limited Liability Company (LLC)
This is the most popular choice among foreign investors, as it offers extra protection for owners and flexibility in operations. Moreover, this business structure helps them start a company in KSA with a minimum capital investment of SAR 500,000.
Joint Stock Company (JSC)
If you own a large business that needs to grow capital through public or private share offerings, then this legal structure is the best option. It is established by one or more individuals or entities, and a minimum investment of 10 million Saudi Riyals is mandatory for it.
Branch Office
This type of legal structure allows a foreign company to establish a physical presence in Saudi Arabia with a branch office setup. If you’re planning to establish a branch office in KSA, you need to understand that it is not treated as a separate legal entity but only as an extension of the parent company.
Representative Office
It is best for those businesses that don’t wish to be directly involved in commercial activities and only conduct market research and promote their product and services in the country.
Get Expert Support from Express Business Service
Company formation in Saudi Arabia is now easier for foreign investors, especially after the introduction of recent changes in the foreign ownership, setup procedures, and requirements. Moreover, the Saudi Arabian government is now offering more lucrative incentives and investment opportunities for visionary entrepreneurs and large foreign companies.
Connect with Express Business Service, the most trusted provider of company registration services in Saudi Arabia. We offer required support and make sure our valued clients can easily navigate all the difficulties in the business setup process in KSA. From handling the paperwork load to helping them understand compliance laws and requirements, we assist our clients with everything.
