Procedures for setting up a company in Saudi Arabia

Saudi Arabia is transforming drastically, becoming a promising global economic center. Setting up a company here is not only a smart investment decision, but also a strategic move to tap into a rapidly growing market. With its diversified economy, policies to encourage foreign investment, and strategic geographical location, Saudi Arabia offers access to a vast consumer market and neighboring markets. The Saudi government is investing heavily in infrastructure, technology, and new industries, creating a dynamic and potential business environment. Besides, the country’s political and social stability is also an important factor, bringing peace of mind to investors. With these outstanding advantages, Saudi Arabia is an ideal destination for businesses looking to expand their operations and achieve success in the Middle East and beyond.

Choosing the type of company to set up in Saudi Arabia

Limited Liability Company LLC

LLCs are the most popular type of business among foreign investors in Saudi Arabia. The distinctive feature of an LLC is the limited liability of the shareholders, which is limited to the assets of the company. This type brings flexibility to small and medium-sized businesses. LLCs require a minimum of one shareholder and allow for 100% ownership of foreign capital in most sectors.

Joint Stock Company (JSC)

JSC is suitable for large enterprises that need to raise capital through public or private investment. This type has a higher minimum capital requirement, namely SAR 500,000 for private companies and SAR 10 million for public companies. The liability of shareholders in JSC is limited to the number of shares they own. JSCs typically require a minimum of two shareholders and three directors.

Branches of foreign companies

An offshore company branch allows a foreign company to operate in Saudi Arabia without the need to establish a separate legal entity. This type is suitable for international businesses that want to expand their presence in Saudi Arabia. The establishment of a foreign company branch requires prior approval from MISA.

Some other types

In addition, there are less common types of businesses such as Partnerships, Limited Partnerships, Private Enterprises, Joint Ventures, Office of Scientific and Technical Services, Business Establishments, and Regional Headquarters. However, some types such as Private Enterprises may only be available to citizens of Saudi Arabia or GCC countries.

Comparison table of the main types of law:

Apply for an investment license when setting up a company in Saudi Arabia

Saudi Arabia’s Ministry of Investment (MISA), formerly known as SAGIA, plays a key role in licensing investments to foreign investors. Depending on the type of business and organizational structure, investors may need to apply for different types of licenses, including:

• Foreign Investment License: Allows foreign investors to establish and own a company in Saudi Arabia.
• Commercial Registration: Allows the company to conduct business legally in Saudi Arabia.

A dossier of request for an investment license includes:

• Legal documents of the parent company (if any):
  • A copy of the business registration certificate or equivalent license.
  • The company’s charter.
  • The parent company’s audited financial statements in recent years.
  • The board’s decision on investing in Saudi Arabia.
• Personal profile of the investor (if an individual):
  • A copy of a valid passport.
  • Resume.
  • Documents proving financial capacity.
• Investment project dossier:
  • Detailed business plan, including: Business description, Market analysis, Financial plan, Expected profit and cash flow, HR plan.
  • Detailed investment plan, including: Total investment capital, Investment capital source, Investment schedule.
• Documents related to the investment location.

The process of applying and receiving a MISA license can take 5 to 7 business days 3. However, according to the new Law on Investment 2025, it is likely that this process will be simplified into a registration process thanks to an electronic registration system.

Procedures for setting up a company in Saudi Arabia

Company Name Registration

The company name must satisfy the following conditions:

• Avoid names that are misleading, unethical, or likely to harm the public interest.
• In addition, the company name must not infringe the registered trademark.

Check availability: Before registering, it is necessary to check the availability of the company name on the MoC’s website to ensure it is not already in use.

Submit the application: After the inspection, submit the online company name registration application through the MoC’s portal.

Drafting and notarization of the company’s charter

• Drafting the charter: The company’s charter is an important legal document regulating the organization and operation of the company.
• Notarization of the charter: After drafting, the company’s charter needs to be notarized by a competent authority such as the Saudi Arabian Business Center under the Ministry of Commerce.

Apply for Commercial Registration (CR)

Application: Apply for a CR license online through the MoC’s portal.

The dossier should include the following documents:

• Investment license from MISA.
• The company’s charter has been notarized.
• Company name registration certificate.
• Other documents as required by the MoC.

Receive a CR license: Once the application is approved, a CR license will be obtained. CR serves as a certificate of incorporation and a local business license