Saudi Arabia offers vast business opportunities with its strong economy and investor-friendly policies. PI Startup Advisory simplifies the company formation process, ensuring smooth registration and compliance for both local and foreign entrepreneurs. step by step guide (2025)
Understand the Saudi Market
Research KSA’s economy, industry trends, and regulations to determine the best business opportunities. Consider Vision 2030 initiatives that encourage foreign investment.
Choose the Right Business Structure
Decide between an LLC, Sole Proprietorship, Branch Office, Joint Stock Company, or Free Zone Company based on your business goals and ownership preferences.
Register with the Ministry of Commerce
Submit your company name registration and Articles of Association through the Ministry of Commerce portal to get initial approval.
Secure a Commercial Registration (CR)Certificate
Apply for a Commercial Registration (CR) from the Ministry of Commerce, which is mandatory for all businesses operating in KSA.
Obtain a MISA Investment License(For Foreign Investors)
If you’re a foreign investor, secure a Saudi Ministry of Investment (MISA) license to operate legally in KSA.
Open a Corporate Bank Account
Set up a Saudi-based business bank account to handle transactions and financial operations.
Register for VAT & Taxation (ZATCA)
Enroll your business with the Zakat, Tax and Customs Authority (ZATCA) for VAT and other tax obligations, depending on your revenue.
Obtain Necessary Licenses & Approvals
Certain industries (e.g., healthcare, construction, IT) require specialized permits from respective government authorities.
Hire Employees & Issue Work Visas
If hiring employees, register with GOSI (General Organization for Social Insurance) and process Iqama (residency permits) for expatriate workers.
Establish a Physical Office or Virtual Presence
Ensure your business has a physical address, whether a mainland office, free zone setup, or coworking space, to comply with regulations.
Limited Liability Company (LLC)
✅ Most Common Business Structure ✅ Suitable for small to medium-sized businesses ✅ Can be 100% foreign-owned with a MISA license (except in restricted sectors)
SoleProprietorship
✅ Easiest & Fastest business setup ✅ Owned by a single individual ✅ Lower compliance requirements
ForeignBranch Office
✅ Allows an existing foreign company to expand into KSA ✅ Operates under the parent company’s name ✅ No separate legal identity (parent company assumes full liability)
Joint Stock Company(JSC)
✅ Suitable for large businesses planning to go public ✅ Can have unlimited shareholders ✅ Can be listed on Tadawul (Saudi Stock Exchange)
Free Zone Companies (If Applicable)
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Training andDevelopment
✅ Provides tax benefits, 100% foreign ownership, and customs advantages ✅ Ideal for export-driven & international trade businesses 🔹 Features: Located in designated Economic & Industrial Zones
Business Entities in Saudi Arabia
Business Entity
Ownership
Liability
Key Features
Best For
Limited Liability Company (LLC)
1-50 shareholders
Limited liability
100% foreign ownership with MISA license, flexible structure
SMEs, foreign investors
Sole Proprietorship
Single owner
Full personal liability
Simple setup, mainly for Saudi nationals
Freelancers, small businesses
Foreign Branch Office
Foreign parent company
Parent company fully liable
Operates under parent company’s name, requires MISA license
International companies expanding to KSA
Joint Stock Company (JSC)
Unlimited shareholders
Limited liability
Suitable for public listing, board of directors required
Large corporations, investors
Free Zone Company
100% foreign ownership
Limited liability
Tax benefits, customs exemptions, operates in special economic zones
International trade, tech, logistics
Step-by-StepGuide to Starting a Business in Saudi Arabia
Setting up a business in Saudi Arabia involves legal, regulatory, and operational steps. To ensure a smooth process, follow this structured guide.
Choose the Right Business Structure
Selecting the correct legal entity (LLC, Sole Proprietorship, Foreign Branch, Joint Stock, etc.) impacts ownership rights, liability, and taxation. LLCs are the most common for foreign investors due to their flexibility.
Obtain a MISA Investment License (For Foreign Investors)
Foreign-owned businesses must get approval from the Ministry of Investment Saudi Arabia (MISA). This step ensures compliance with Saudi regulations and determines the scope of permitted activities.
Reserve a Unique Trade Name
Register a distinct company name with the Ministry of Commerce (MOC), ensuring it complies with Saudi naming laws and is not already in use.
Draft and Notarize the Articles of Association(AOA)
The Articles of Association (AOA) define ownership structure, operational procedures, and shareholder responsibilities. It must be authenticated by a notary and submitted to the MOC.
Obtain a Commercial Registration(CR)
A Commercial Registration (CR) is issued by the Ministry of Commerce, officially licensing the business. The CR is essential for opening a corporate bank account and conducting business legally.
Open a Corporate Bank Account & Deposit Capital
Choose a Saudi bank and open a business account. Certain business structures require minimum capital deposits before proceeding with further registration.
Register with ZATCA for Tax & VAT Compliance
Businesses must register with the Zakat, Tax, and Customs Authority (ZATCA) for VAT, corporate tax, and zakat obligations. VAT applies if annual revenue exceeds SAR 375,000.
Obtain Municipality & Industry-Specific Approvals
Depending on the industry, businesses may require additional municipality permits and approvals from relevant authorities such as the Saudi Food & Drug Authority (SFDA) or the Saudi Arabian Monetary Authority (SAMA).
Register with GOSI for Employee Social Insurance
If hiring employees, businesses must register with the General Organization for Social Insurance (GOSI) for social security compliance and employee benefits.
Obtain a Saudization (NITAQAT) Certificate & Hire Employees
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Business Licensing & Regulatory Requirements For Businessin Saudi Arabia
Setting up a business in Saudi Arabia requires compliance with legal, regulatory, and industry-specific licensing requirements. Here’s a breakdown of the key steps and approvals needed.
Obtain a Commercial Registration (CR) from the Ministry of Commerce
Every business must apply for a Commercial Registration (CR) from the Ministry of Commerce (MoC). This is the official business license required to operate legally. Requirements: ✔️ Approved trade name ✔️ Articles of Association (for LLCs) ✔️ Owner’s ID and relevant approvals ✔️ Payment of registration fees
Secure a MISA License forForeign Investors
Foreign-owned businesses must obtain approval from the Ministry of Investment Saudi Arabia (MISA) to establish a company in the Kingdom. Key Requirements: ✔️ Business plan & financial projections ✔️ Proof of international experience (for some sectors) ✔️ Minimum capital investment (varies by sector)
Register with ZATCA for Taxation & VAT Compliance
All businesses must register with the Zakat, Tax, and Customs Authority (ZATCA) for taxation purposes. Tax Requirements: ✔️ VAT Registration (if annual turnover exceeds SAR 375,000) ✔️ Corporate Income Tax (for foreign-owned companies at 20%) ✔️ Zakat (for Saudi-owned companies)
Obtain Municipality & Industry-Specific Licenses
Certain businesses require additional approvals based on their industry. Examples: 🏗️ Construction & Real Estate 🍽️ Restaurants & Cafes 🏥 Healthcare & Pharma 💳 Financial Services
Register with GOSI for Employee Social Security
If hiring employees, companies must register with the General Organization for Social Insurance (GOSI) for workforce benefits and labor law compliance. ✔️ Covers Saudi and expatriate employees ✔️ Employer & employee contributions required
Obtain a Saudization Certificate (NITAQAT Program)
Saudi Arabia mandates companies to meet a minimum quota of Saudi employees under the Nitaqat Program. ✔️ Percentage varies by company size & industry ✔️ Essential for work visas & government contracts
Additional Compliance: SAGIA, Labor Law & Iqama Sponsorship
Foreign businesses need to comply with additional regulations: ✔️ Work Visas & Iqama Sponsorship – Employers must sponsor expatriate employees. ✔️ Labor Law Compliance – Contracts, wages, and benefits must align with Saudi labor laws. ✔️ Anti-Money Laundering & Compliance (AML) – Mandatory for financial and corporate sectors.
Why Choose PI Startup Advisory?For starting business inSaudi Arabia
Setting up a business in Saudi Arabia can be challenging, but PI Startup Advisory simplifies the process with expert guidance and end-to-end support. Here’s why we are the best choice for entrepreneurs.
Expert Business Setup Consultants
We have deep knowledge of local laws, regulations, and business environments in Saudi Arabia, ensuring smooth company formation.
Hassle-Free Company Registration
We handle the entire business setup process, from selecting the right structure to obtaining all necessary licenses and approvals, so you can focus on growing your business.
Fast & Efficient Process
Our streamlined approach helps you register your company quickly, reducing delays and ensuring compliance with government regulations.
Local Sponsorship & PRO Services
For businesses that require a local sponsor, we connect you with reliable partners while ensuring you maintain full operational control. Our PRO services manage visas, work permits, and corporate documentation.
Banking & Financial Support
We assist in opening corporate bank accounts, handling VAT registration, and ensuring your business is financially compliant from day one.
100% Transparency & Compliance
With PI Startup Advisory, there are no hidden fees—we provide clear, upfront pricing and ensure your business follows all legal and regulatory requirements.
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Contact Us
Email
info@pistartup.co
Phone
+973 13118811
Address
Office 31, Building 96, Road 333,Block 321 Kingdom of Bahrain
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Frequently Asked Questions
Find answers to commonly asked questions about our products and services.
Can a foreigner own 100% of a company in Saudi Arabia?
Yes, foreign investors can own 100% of a company by obtaining a MISA (formerly SAGIA) license from the Ministry of Investment Saudi Arabia. Some sectors may require a local partner.
How long does it take to register a company in Saudi Arabia?
The company registration process typically takes 2 to 4 weeks, depending on the business type and approvals required.
What is the minimum capital requirement for setting up a business?
The minimum capital varies by business type: LLC – SAR 500,000 (varies by sector) Some consulting businesses – No minimum capital required
Do I need a local sponsor to start a business in Saudi Arabia?
No, a local sponsor is not required if you have a MISA license. However, certain industries may require a Saudi partner.
What are the tax requirements for businesses in Saudi Arabia?
Corporate Tax – 20% (for foreign-owned businesses) Zakat – 2.5% (for Saudi and GCC-owned companies) VAT – 15% on goods and services
Can I open a corporate bank account in Saudi Arabia?
Yes, once your company is registered, you can open a business bank account with a Saudi bank such as Al Rajhi Bank, Riyad Bank, or Alinma Bank.
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