With 100% foreign ownership, business setup in Saudi Arabia for foreigners (international companies) has become a recurrent strategic decision.
Saudi Arabia stands among the world’s fastest-growing economies, with a projected growth rate of 4.7% next year and 4.6% in 2025 – far outpacing advanced economies, which are expected to grow at just 1.6% to 1.7%. It’s no surprise that global giants like Google, Morgan Stanley, IBM, and many others have established a strong presence in the Kingdom.
This guide outlines the essential steps to establish a foreign-owned business in Saudi Arabia, drawing on our experience of seamlessly expanding over 700 high-growth companies from 50+ countries across 37 sectors in their expansion to the Kingdom.
Requirements for a Foreign Business Setup in KSA: What Do I Need to Know?
1. Laying the Groundwork: Legal Entity Establishment (Projected timeline: 1 month)
The initial phase of setting up a business in Saudi Arabia involves establishing a legal entity.
This entails obtaining a one-year investor license from the Ministry of Investment of Saudi Arabia (MISA), reserving a company name, drafting and notarizing the Articles of Association (AoA), securing a Commercial Registration (CR) certificate, and registering with the Chamber of Commerce (CoC).
- Obtain a MISA Investor License
- Name Reservation
- Draft Local Articles of Association (AoA) – the document is established by the law and companies can only adjust their general manager’s powers.
- Secure Commercial Registration (CR)
- Obtain the Chamber of Commerce (CoC) Registration
2. Assembling a Team: Authorization and Hiring (Projected Timeline: 2 months)
After procuring a company seal, the next step is to get the authorization to hire staff.
This phase requires registering with the Ministry of Labor (MoL), enrolling in the General Organization for Social Insurance (GOSI), registering a national address, securing a visa for a general manager, and registering with the General Authority of Zakat and Tax (GAZT) for tax compliance, including VAT.
6. Obtain a company seal
7. Register with the Ministry of Labor
8. Register with the General Organization for Social Issuance (GOSI).
9. Register a National Address
10. Issue a GM Visa
11. Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration
3. Finalizing the Setup Process: Residency and Banking (Projected timeline: 3 months)
Continuing on the steps, the final stage involves completing the residency process for the general manager and opening a corporate bank account.
This includes activating the Chamber of Commerce account, obtaining health insurance, scheduling a medical checkup, securing an Iqama (residence permit), registering on various government portals (Muqeem, Absher, Qiwa, Mudad), and opening a bank account.
12. Activate the Chamber of Commerce (CoC) account.
13. Obtain Health Insurance
14. Get a Medical Check-up
15. Issuing the GM’s Iqama
16. Register with the Muqeem portal for streamlined visa and residency management.
17. Register with the Absher portal for an array of e-government services.
18. Register with the Qiwa portal for business services designed for SMEs.
19. Register with the Mudad Portal to manage essential municipal services for your company.
20. Open a bank account
Business Setup in Saudi Arabia for Foreigners: Answers to FAQs
- How long does it take to start a business in Saudi?
Once all the necessary documents are ready, it takes around 6 months to have a fully operational business in Saudi. Our team expedites the process significantly (on average, AstroLabs clients become operational in three months), thanks to their decade-long expertise in company formation in Saudi Arabia and strong connections with key partners, including MISA along with various private sector entities, and local banks
- Can foreigners set up a company in Saudi?
Yes, foreigners can set up their company with 100% ownership. As one of the fastest-growing economies in the world, Saudi offers the optimal launch for foreign businesses due to its pro-enterprise environment, tax benefits, and ease of the process of establishing a business.
In the event of expanding a business to Saudi Arabia, foreigners would need to appoint a general manager for the Saudi entity, who would need to be a resident of Saudi Arabia.
- How many shareholders are required to set up a business in Saudi?
To start your business in Saudi, you will need at least one shareholder to do so. The shareholder can be a Saudi resident or a foreigner.
- What is the average cost of setting up a business in Saudi?
The average cost of expenses covering the business setup during its first year of operation can be SR550,000 or $172,000. The renewal process for a license covering the following year starts in the 11th month of the year, meaning that it is vital to ascertain this in the budget for the first year.
- Why do I open a corporate bank account in Saudi?
Opening a bank account is an essential step towards forming a business in Saudi. AstroLabs’ team can help foreign businesses unlock direct access to leading banks such as SAB, and other banks in the Kingdom, including Riyad Bank and Albilad Bank, allowing companies to jump-start operations.
TIP: Companies need to transfer funds to their bank account within 60 days to avoid account blockage.
Additionally, obtaining a Saudization certificate is necessary to access the Etimad portal and participate in government tenders. For foreigners, the minimum capital required to start a bank account is SR25,000.