Company Registration Requirements in Saudi Arabia

Updated on Wednesday 06th October 2021

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The procedure on how to open a company in Saudi Arabia is more complicated, but with proper assistance provided our team of specialists in company formation any foreigner can set up a business here, provided that all the requirements are met. To register a company in Saudi Arabia can be different depending on the gender of the applicant as there are specific regulations that have to be completed by entrepreneurs who are women. The legislation is flexible in terms of the types of companies that can be set up here, ranging from the limited liability company (available for natural persons) to the branch office or the representative office (both business forms can be set up by other companies interested in investing in Saudi Arabia). 

Commercial registration in Saudi Arabia can be completed with the help of our local advisors. We can help you set up a company in Saudi Arabia, no matter the type of legal entity you choose. Setting up a business in Saudi Arabia can be an easy process if you choose us for legal representation. 

Types of companies to be set up in Saudi Arabia 

Following the provisions prescribed by the New Companies Regulations, effective since 2nd of May 2016, investors who want to start a business in Saudi Arabia may choose one of these business forms:
limited liability company;
joint stock company;
joint venture;
limited partnership company;
joint liability company.

If you have any questions on the company registration process in Saudi Arabia, do not hesitate to email them to our representatives. We will offer you complete details about the process of setting up a company in Saudi Arabia. 

Foreign companies may operate on the local market as one of the following:
representative office
The process of registering a company in Saudi Arabia is also prescribed by the Foreign Investment Law 2000 and the Implementation Regulations 2013, which establishes the fields of activities that are prohibited to foreign investors. 
The investors interested in setting up a business in Saudi Arabia are required to obtain an investment license, which is issued by the Saudi Arabian General Investment Authority (SAGIA). The license has to be obtained prior to starting any business operations on the country’s territory and our team of consultants in company registration in Saudi Arabia can offer in-depth assistance on the procedures that are set up in this particular case.

If you are interested in registering a company in Saudi Arabia, our consultants are at your disposal with tailored services. We will help you open a company in Saudi Arabia in the shortest time possible. 

Steps for company registration in Saudi Arabia

Commercial registration in Saudi Arabia implies several steps and our specialists can act as agents on behalf of foreign investors who want to set up their own businesses in this country. The following must be respected:

1.       the preparation of the statutory documents of the Saudi business, which comprise the Memorandum and Articles of Association;
2.       other documents must also be prepared, among which identification papers of the shareholders or incorporation papers in the case of foreign companies;
3.       the company must also have a registered address that must be recorded with the Trade Register;
4.       these documents must be filed with the Trade Register in Saudi Arabia;
5.       opening a company bank account in which the share capital will be deposited must be set up with a local bank
6.       register with the Saudi tax authorities for taxation purposes and for obtaining a VAT number.

The last step of the company registration process in Saudi Arabia is obtaining the necessary licenses which depend on the industry the business will operate in.

Similar procedures must be completed upon foreign company registration in Saudi Arabia and our agents can help you set up branch offices and subsidiaries for the extension of your foreign business.

What to consider when registering a company in Saudi Arabia

Foreign or local investors who want to register a company in Saudi Arabia must comply with various requirements prior to the company registration process in Saudi Arabia. If having a registered address and a unique trading name is a mandatory condition no matter the type of operations to be created, there are also other aspects that need to be respected and that depend on the selected business entity.

For example, the minimum number of shareholders, directors, and share capital requirements are different for each type of company.

Foreign investors interested in setting up a business in Saudi Arabia will usually open limited liability companies which are one of the most appealing structures in Saudi Arabia because they can also be set up in other countries.

For example, in the case of private limited liability commercial registration in Saudi Arabia, at least one shareholder and one director are required, and the entire procedure can be completed in approximately 2 months.

With respect to the minimum share capital, for an LLC, at least 100,000 SAR (approximately 26,700 USD) must be paid upon the formation of the business.

In the case of a joint stock or public company, the minimum requirements in terms of shareholding and management are two, respectively three who are not required to be Saudi residents if they do not plan on living in Saudi Arabia while doing business here. The minimum share capital for the company registration process in Saudi Arabia, in this case, is 500, 000 SAR (around 134,000 USD).

Another business form often selected by foreign investors who come to Saudi Arabia is the limited partnership. While this entity does not have a minimum share capital requirement, it is bound to have at least two partners and at least one director.

Those who are interested in foreign company registration in Saudi Arabia, the subsidiary that can take the form of a limited liability company (private or public) when seeking to be an independent business, or of a branch office when the owners want to run it as a dependent entity (this legal vehicle is usually employed by financial companies because of the activity restrictions).

If you need details on company registration in Saudi Arabia, our officers can explain the necessary steps and they will also offer guidance in choosing an appropriate type of entity.

Legal procedures for Saudi Arabia company formation  

As mentioned above, foreigners have to obtain a license from SAGIA, a procedure that will incur specific fees. Company’s documents are to be legalized by the Saudi consulate. Later on, the investors will need to obtain an approval for the company’s trading name, issued by the Companies Department, working under the Ministry of Commerce and Industry. The application has to contain the company’s articles of association, which have to be drawn in front of a public notary in Saudi Arabia
When setting up a company in Saudi Arabia, the next step refers to the publication of the company’s trading name and a summary of the company’s articles of association in the official gazette. 
Depending on the legal entity chosen for incorporation, the investors will also have to open a corporate bank account, in which they will deposit the minimum share capital prescribed by the local legislation. 

Foreign company registration in Saudi Arabia is not complicated as long as all requirements are respected, and our agents can guide you through them. If you want to know details about the accounting and reporting requirements, our team of accountants can help you.

Why open a company in Saudi Arabia?

Saudi Arabia can be a great choice for foreign investors interested in investing in the Middle East, provided that:
  • the 3rd quarter of 2020 brought foreign direct investments worth 1,034 million USD;
  • the state budget for 2021 is set at around 263.91 billion USD;
  • the country’s Gross Domestic Product (GDP) is expected to grow by 3.2% in 2021;
  • the online market is expected to reach 19.28 million consumers in 2022;
  • Saudi Arabia’s population is expected to grow to 38.38 million people at the end of 2025.

The incorporation procedure will also require other compulsory steps and foreign entrepreneurs are invited to address to our team of company registration agents in Saudi Arabia for further assistance. Contact us when you decide to register a company in Saudi Arabia.