Middle East · Company formation
Company formation in Saudi Arabia
This suits founders who need real, on-the-ground access to the Saudi or GCC market. It calls for genuine substance: a resident general manager, Saudisation and GOSI compliance, and an actual local presence. It is not a light holding structure.
At a glance
- Entity
- Limited liability company (sharikah dhat mas'uliyyah mahdudah / LLC) — the standard vehicle for foreign founders, formed under a MISA foreign-investment licence and a commercial registration (CR)
- Corporate tax
- 20% corporate income tax on the foreign-owned share of profits, as of 2026. The Saudi/GCC-owned share is instead subject to zakat at 2.5% of the zakat base; a mixed-ownership LLC pays both on the respective shares. Oil/hydrocarbon activity is taxed 50-85%.
- Incorporation time
- ~2-6 weeks realistically end-to-end: MISA investment licence can issue within days, but the CR, notarised articles, municipality/GOSI/ZATCA registrations and bank account add time
- Minimum capital
- No general statutory minimum under the 2023 Companies Law — capital must simply be adequate for the activity. MISA sets sector minimums instead: nil for many service activities, but SAR 500,000 for some classes and SAR 30,000,000 for a foreign-owned trading (wholesale/retail) licence
- Resident director
- No resident director/board requirement, but the LLC must appoint a general manager who is resident in the Kingdom on a valid Iqama. The GM may be any nationality; partners/directors need not be resident
- Audit
- Statutory audit by a SOCPA-licensed auditor. The small/micro-company exemption does NOT apply to foreign-owned entities, so a foreign-owned LLC is effectively always audited and files annually with ZATCA
- Remote set-up
- Can largely be initiated remotely through a notarised power of attorney, but corporate documents (incorporation certificate, board resolution, PoA) must be notarised and apostilled/legalised in the home country with certified Arabic translation, and the articles are notarised in the Kingdom; the GM ultimately needs an Iqama in-country
- Government fee
- MISA investment licence fee is SAR 2,000 per year (historically bundled to ~SAR 12,000 in year one), plus CR, Chamber of Commerce and notarisation fees; MISA has run fee-waiver windows for entrepreneur/service licences, so the effective figure varies
- Best for
- This suits founders who need real, on-the-ground access to the Saudi or GCC market. It calls for genuine substance: a resident general manager, Saudisation and GOSI compliance, and an actual local presence. It is not a light holding structure.
The process
- Obtain the MISA foreign-investment licence for the chosen activity (ISIC code), submitting apostilled/legalised and Arabic-translated corporate documents
- Reserve the trade name and draft/notarise the articles of association, then issue the commercial registration (CR)
- Register with the Chamber of Commerce, municipality (baladi licence), ZATCA (tax/VAT), GOSI and the Ministry of Human Resources; appoint the resident general manager and obtain his Iqama
- Open a corporate bank account and deposit/evidence the required capital
What can go wrong
- Minimum capital is activity-driven via MISA, not a single headline number — a foreign-owned trading licence still carries a SAR 30 million requirement, so verify the exact figure for your ISIC code before relying on 'nil'
- '100% foreign ownership' is allowed in most sectors but not all — media, certain professional and strategic activities remain restricted or need a Saudi partner/extra approvals
- Real operating obligations bite quickly: a resident GM with an Iqama, Saudisation (Nitaqat) hiring quotas, GOSI, mandatory SOCPA audit and ZATCA e-invoicing — this is a substance jurisdiction, not a paper one
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Form a company in Saudi Arabia?
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