How to Register Your Company in Saudi Arabia: Expert-Backed Guide

Saudi Arabia in 2024 - An amazing number tells an amazing story. Public investment grew by 79% over last year, with 121,000 commercial registrations issued in Saudi Arabia during the second quarter alone, bringing the total number of commercial registrations to more than 1,518,000 across all regions of the Kingdom. [1]

Saudi Vision 2030 has effectively transformed the Kingdom into a thriving business hub that creates unprecedented opportunities for global entrepreneurs and has given movement to the Saudi market in the year and the Middle East in particular. The process of registering a company in Saudi Arabia may seem like a complex maze of regulations, requirements and procedures to many foreign investors due to their lack of knowledge of some of the systems, registration methods and the best ways to open a company in Saudi Arabia.

Your plans to register a company in Saudi Arabia as a small business owner or establish a large company by establishing a company in Saudi Arabia need a clear roadmap to guide the process effectively. Each step requires guidance from experts who have the knowledge and familiarity with this method - from choosing the right corporate entity for the foreign investor to completing the mandatory registrations with all government agencies.

The simple and practical steps will help you understand the complex procedures for establishing a company in Saudi Arabia. Your Saudi business dreams can become a reality with the right approach!

Understanding Business Structures in Saudi Arabia

Saudi Arabia offers a variety of business registration structures and entities. The Saudi system allows businesses to choose from different types of entities, each with its own benefits and requirements.

Foreign investors typically choose from the following common business structures:

Limited Liability Company - requires a capital of not less than 25 thousand Saudi Riyals [1] and it is not required to deposit the capital in the investor's bank account.

Joint Stock Company - requires a capital of not less than 500,000 thousand Saudi Riyals for private companies [1] and the paid-up capital is not less than a quarter.

Branch Office - requires a capital of not less than 25 thousand Saudi Riyals [1]

Representative Office - does not require a capital of not less than 25 thousand Saudi Riyals

It should be noted that each type of license has its own requirements, such as a commercial license for import and export, a professional license, and a real estate license if the company is 100% foreign owned.

Foreign investors can now fully own wholesale and retail trading companies with a minimum capital of SAR 30 million [2]. These companies must show their presence in at least three regional or global markets [2].

The new Investment Law of 2024 has made things easier by removing the need for foreign investment licenses [3]. This law ensures equal treatment of domestic and foreign investors while protecting intellectual property rights.

Industrial projects need a minimum capital of SAR 25 thousand, and agricultural projects require SAR 25 thousand. These requirements might change based on your business activity and ownership structure.

Most foreign investors choose the LLC structure because it offers flexibility and limited liability protection. An LLC can have 2-50 shareholder, and their liability extends only to their contributed capital.

Essential Pre-Registration Requirements

Basic Pre-Registration Requirements

Want to register your company in Saudi Arabia? Let’s take a look at what you need to get started.

Foreign investors need to obtain an investment license from the Ministry of Investment. You will need three important documents to obtain this license:

A copy of your home country’s commercial registration with the Saudi Embassy [5] or Apostille certification.

Last year’s financial statements from an internationally recognized law firm with the Saudi Embassy register a business in saudi arabia [5] or Apostille certification.

The company’s articles of association with the Saudi Embassy [5] or Apostille certification.

Any company registering in Saudi Arabia needs a physical office space. Saudi Post must register this location as your official mailing address and this is where Motaded Limited comes in, providing workspaces as well as virtual office services and a national address for foreign investors free of charge for a limited time.

The based on what type of business you want to start:minimum investment varies

Industrial projects: 25 thousand Saudi riyals for the capital mentioned in the commercial register of the foreign company and it is not required to deposit it. The operating cost is not included in the capital, as the foreign investor has the right to start from 25 thousand Saudi riyals to any capital number that suits his project. Here it must be clarified that the capital is the number mentioned in the commercial register and not the operating capital.

Agricultural projects: 25 thousand Saudi riyals for the capital mentioned in the commercial register of the foreign company and it is not required to deposit it.

Commercial projects: For import, export and e-commerce, the investment amount must not be less than 30 million Saudi riyals for the first year and 300 million Saudi riyals during the first five years. It is also necessary to know the difference between the capital and the investment amount, as the required amount is the movement of the bank account and the total income of the company must be 30 million Saudi riyals during the first year, including operation and establishment costs, etc., and also during the first five years the total income must be 300 million Saudi riyals, and assets such as goods or others are included in the investment amount.

Real estate projects: Any real estate project that is established to build apartments, villas, commercial buildings, or sell any real estate property, the investment amount must be 30 million riyals, including the value of the land and the cost of construction and establishment.

Foreign participation under the foreign investment system: 25 thousand Saudi riyals for most investment licenses.

Note: A distinction must be made between the investment amount and the capital.

Certified professionals must translate all official documents to Arabic [8]. On top of that, you need attestation from the Ministry of Foreign Affairs and the Saudi Embassy [5].

Opening a local bank account in Saudi Arabia makes sense. You'll use this account to deposit your original capital and handle your business transactions [9].

Note that professional services firms must have at least 25% of licensed Saudi partners. In the field of financial, accounting, legal, administrative, engineering consulting and any professional activity, the foreign investor must be a partner with a Saudi person or company that has a professional license approved by Saudi Arabia.