Learn how to set up a company in Saudi Arabia in 2025 with our step-by-step guide. Explore business structures, licenses, Saudization, and compliance.
Do you know in Saudi Arabia, business registrations increased to 48% in the first quarter of 2025 with 154,638 commercial records issued? Sounds amazing! Saudi Arabia has emerged as the most attractive destination for investors and entrepreneurs. Under Vision 2030, Saudi Arabia is opening up new sectors including technology, tourism, entertainment, and renewable energy. So, it is crucial to know about the company set up in KSA.
This blog will provide a step-by-step guideline about how to set up a company in KSA.
Business Opportunities in KSA
In line with Vision 2030, the focus of the Kingdom has been shifted from oil to other sectors like infrastructure, technological innovation, public-private partnership, tourism, and entrepreneurship to become a dynamic global business hub. Here are the business trends in Saudi Arabia 2025:
- Renewable Energy
- Real Estate and Construction
- Technology & Innovation
- Sports & Entertainment
- Biotechnology & Healthcare
- Financial Services
- Industrial Manufacturing
- Tourism
Types of Business Structures in KSA
Choosing the right business structure while setting up a company in KSA is the first crucial step. Before choosing any business structure, it is important to look into taxation, employee obligations, and licensing.
Here are the different types of business structures in KSA:
- Sole Proprietorship
- Joint Stock Company
- Limited Liability Company (LLC)
- Representative Office
- Joint Venture
- Branch of a Foreign Company
How to Set Up a Company in Saudi Arabia?
If you’re interested in setting up a company in KSA and don’t know where to start, don’t worry. We’ve got you covered. Here is a step-by-step guide to help you navigate the process of company setup in KSA:
Step 1: Choose Your Business Structure
The first step is to choose a business structure for your company. There are various business structures including Sole Proprietorship, Joint Stock Company, Limited Liability Company (LLC), and Branch Office of a Foreign Company. Whether it’s financial services, IT, trading, real estate, or manufacturing, this will determine which permits or licenses you will need to proceed.
Step 2: Foreign Investment License
This step is only applicable if you’re a non-Saudi investor. The first step for you is to apply for a foreign investment license. This can be done through the Saudi Arabian General Investment Authority (SAGIA) which is now known as the Ministry of Investment (MISA). Here are the documents that are required:
Financial Statements
- Business Plan
- Company Profile
- Passport Copies of Owners or Shareholders
Step 3: Reserve Company Name
Another step is to reserve your company name. All you have to do is choose a unique name and reserve it through the Ministry of Commerce (MOC). You can check the availability of a name and reserve it online via the MOC portal.
Step 4: Documentation
The other crucial step is to draft the articles of the association. This is a company founding document that outlines your ownership, capital structure, and responsibilities. If your business structure is based on an LLC then it must be notarized and approved by MOC.
Step 5: Commercial Registration (CR)
After the authentication of your document, you will get your company registered to get the commercial registration (CR). It is legal proof that your company is registered, and you can set up a company in KSA.
Step 6: Registration with Government Authorities
Your company must get registered with government authorities. Here are the following government bodies:
- Municipality to obtain a local business license (Baladiya License)
- General Organization for Social Insurance (GOSI) for employee registration
- Zakat, Tax and Customs Authority (ZATCA) for tax purposes
Step 7: Corporate Bank Account
Once your company is registered, you will be allowed to open a corporate bank account. Most banks require your CR, company seal, and authorized signatory documents.
Step 8: Office Space and Address
The next step is to find an appropriate location for an office as you will need a physical address for your company.
Step 9: Saudization Compliance
Saudization is known as Nitaqat. It is a Saudi Arabian government initiative that mandates companies to hire a certain percentage of Saudi nationals according to the size of the company.
Challenges in Setting up a Company in Saudi Arabia
Here are some of the key challenges that you may face while setting up a business in Saudi Arabia:
- Complex Regulatory Environment
Whether you’re a Saudi national or not, you may find difficulty in compliance with legal rules and regulations. Compliance procedures, company registration, licensing, and documentation often take some time.
- Cultural and Social Norms
You must respect the social and cultural norms of KSA as it is essential for successful business. Therefore, it is necessary to understand Islamic business practices, traditions, and cultural sensitivity. You can only succeed if you deal with the locals by respecting their norms and customs.
- Language Barrier
If you are someone who doesn’t know Arabic, you are going to have a tough time. The locals speak Arabic but in business, English is often used. The documents are in Arabic. You must have a translator or language expert who can guide you through the documents to avoid misunderstandings.
- Saudization Policies
It is mandatory for a company to employ a certain percentage of Saudi nationals. It can become challenging for you to find an expert local Saudi national in your particular field.
- Compliance with Sharia Law
If you’re interested in setting up a business in KSA, you must learn about Sharia law which is based on Islamic law. For dispute resolution, contracts, and legal proceedings, you may require legal counsel familiar with Shariah law.
- Finding Local Partners
You can also find it challenging to identify reliable local partners or sponsors. To avoid this issue, you can use government-approved platforms like the Ministry of Investment (MISA) and local chambers of commerce for reliable partners.
- Bureaucratic Delays
You may experience a delay in paperwork, licenses, registration, and approvals. For this, you can prepare documents with the help of local Public Relations Officers (PRO) services to avoid unnecessary delays.
Dos and Don’ts of Businesses in Saudi Arabia
Here are some dos and don’ts that should be kept in mind if you’re about to do business in Saudi Arabia:
Dos While Setting up a Company in KSA
- Do your market research
- Do select the right business structure
- Do ensure compliance with the legal frameworks of Saudi Arabia
- Do get help from expert legal advisors or consultants
- Do register with concerned government authorities
- Do keep all documents translated and verified
- Do monitor regulatory updates
Don’ts While Setting up a Company in KSA
- Don’t proceed without a proper license
- Don’t ignore the cultural and traditional norms
- Don’t use generic or inaccurate company name
- Don’t overlook tax obligations
- Don’t forget to renew your licenses
- Don’t ignore Sharia law compliance
Saudi Arabia is opening vast opportunities for investors under Vision 2030. From choosing the right structure to navigating regulations, setting up a business in KSA requires expert guidance.
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