Expert regulatory compliance consulting services in Saudi Arabia can be instrumental in shaping your company’s success.
Setting up a business in Saudi Arabia is an important milestone and a beneficial move for foreign companies. Staying compliant with both pre- and post-registration procedures in a correct and timely manner is crucial to support regulatory compliance, safeguard operational integrity, and build stakeholder confidence.
This article outlines the primary compliance obligations in Saudi Arabia, the corporate governance frameworks, and how businesses can utilize regulatory compliance services in the Kingdom.
What is Regulatory Compliance in Saudi Arabia?
Put simply, regulatory compliance ensures that a company operates in accordance with applicable laws and regulations typically imposed by governing authorities such as the Saudi Central Bank (SAMA), the Ministry of Investment (MISA), and the Ministry of Commerce (MoC), to name a few.
Here’s the catch: regulatory compliance is not only about rules and procedures but also about internal audits and oversight, proving that governance controls are embedded in the company’s culture and day-to-day operations.
Why Does Compliance Matter for Foreign Companies Setting Up a Business in Saudi Arabia?
According to the AstroLabs’ 2025 Saudi Market Entry Report, 81% of businesses concurred that adhering to regulatory compliance is affecting their ability to execute their expansion strategy. That makes regulatory compliance the highest contributing factor to a full landing in the Saudi market and an element in securing opportunities, partnerships, and potential customers.
This ever-growing regulatory framework in Saudi Arabia creates continuous obligations for businesses, which shift the demands of corporate compliance and risk management.
Regulatory Framework for Saudi Arabia Corporate Governance and Compliance
Saudi’s regulatory framework for corporate governance and compliance is governed by several pieces of new and updated legislation applicable to foreign companies.
The New Companies Law (2023)
Saudi Arabia introduced a new Companies Law in January 2023, requiring all companies to update their Articles of Association (AoA) or Memorandum of Association (MoA) in alignment with the new legal requirements. It is worth mentioning that having an updated AoA is the cornerstone of a compliant business setup process for foreign companies.
Related read: Drafting Memorandum of Association (MoA) and Articles of Association (AoA) in Saudi Arabia
Corporate Governance Regulations by the CMA
The Capital Market Authority (CMA) has recently established comprehensive Corporate Governance Regulations within the framework of the Companies Law. Updated most recently in January 2023, these rules are mandatory for Joint Stock Companies listed on the Tadawul exchange while also providing recommended best practices for other organizations.
Corporate Governance Authorities and Government Entities
Several key government bodies regulate business operations in Saudi Arabia.
The Ministry of Investment (MISA) issues licenses that allow foreign companies to legally operate, while the Ministry of Commerce (MoC) manages core requirements such as Articles of Association, trade name reservation, and Commercial Registration.
Moreover, the Chamber of Commerce supports commercial activities by offering document verification, certificates of origin, and permits. Overseeing labor regulations, Saudization compliance, and GM visas is the responsibility of the Ministry of Human Resources and Social Development (HRSD), while the Zakat, Tax, and Customs Authority (ZATCA) enforces tax compliance, including VAT, Zakat, and corporate tax.
Meanwhile, the General Organization for Social Insurance (GOSI) ensures social insurance contributions are made for employees, often required for government project eligibility.
Breaking Down Barriers: Overcoming Common Challenges in Meeting Corporate Compliance Laws
Understanding Local Regulations
Saudi Arabia aims to rank among the world’s leading 15 economies by 2030. Achieving this goal requires continuous updates to business regulations, but navigating these constantly evolving laws can be a challenging feat for foreign companies.
Navigating Business Setup Procedures
Starting a business in Saudi Arabia requires adherence to specific regulatory compliance requirements that extend into all aspects of operations, including recruitment and employment practices. Noncompliance can have serious consequences.
Example: Companies that fail to remove terminated employees from official systems may face fines for “ghost employees,” which can be treated as occupational fraud.
Building a Strong Network
For foreign companies, relationship-building should be a high business priority and can be fostered through networking events, business dinners, and meetings, including those held and managed by AstroLabs.
With more than 20,000 members from both the private and public sectors, the AstroLabs Network provides access to curated industry events and other networking opportunities to help you connect with potential clients, partners, and suppliers, empowering your business to expand and deeply integrate into the Kingdom’s business and cultural environment.
Key Regulatory Compliance Requirements
Here are the most important compliance processes that foreign companies must consider after incorporating a company in Saudi.
Saudization (Nitaqat) Requirements
Under Saudi labor law, companies must meet Saudization quotas determined by their size and sector. Failure to comply may place a business in the Red Zone, leading to operational restrictions and potential legal penalties. New Saudization regulations state that companies should enforce new rates for 269 professions in the private sector in the accounting, engineering, and healthcare sectors.
Government Platform Management
Businesses incorporated in Saudi are required to keep their accounts updated and accurate on key government platforms such as Muqeem, Qiwa, and Mudad. The interconnected nature of these systems means that noncompliance in one platform can trigger a chain reaction of negative operational outcomes.
Example: Failure to submit Zakat or VAT on time can result in the deactivation of Muqeem, which hinders businesses from issuing exit and reentry visas for expatriate staff.
Tax Filing with ZATCA
All entities must file annual tax returns with the Zakat, Tax, and Customs Authority (ZATCA) accurately and on time to remain compliant. In Saudi, corporate income tax is levied at 20% of net adjusted profits, while withholding tax (WHT) ranges from 5% to 20%, and Zakat is applied at 2.5% on the company’s Zakat base.
Payroll and HR Compliance
Companies employing Saudi nationals must ensure proper salary payments and maintain accurate payroll records in line with labor regulations, which are subject to frequent changes. This creates difficulties in keeping up with changing requirements, particularly for those not well-versed in local labor regulations.
Business License Renewal
Businesses must stay on top of mandatory license renewals, including critical documents such as the General Manager’s Iqama, commercial registration (CR), and MISA license. Obtaining the help of regulatory compliance consulting services in Saudi Arabia is often used to track and manage these renewals to avoid disruptions.
Related read: Keeping Up With Business License Renewal Requirements in Saudi Arabia (2025)
Additional Compliance Considerations for Foreign-Owned Businesses
Have a Local Resident General Manager (GM)
Your business must have a general manager who is a resident of Saudi Arabia. The GM needs to sign the paperwork for the Iqama in person in Saudi to complete the establishment process.
Secure a Registered Address
To operate legally in Saudi Arabia, every business must maintain a registered office to obtain its National Address, a key requirement to formally incorporate a foreign business.
Open a Bank Account
Using the GM’s Iqama, foreign businesses can secure a corporate bank with a Saudi-based entity, a crucial move that marks the end of a three-stage business setup process in Saudi Arabia.
Real-World Impact: When Regulatory Compliance Consulting Becomes a Growth Enabler
Failure to comply with portal regulations in Saudi can result in immediate system blockages.
For companies aiming to participate in major government tenders, including giga projects, noncompliance may disqualify them from submitting proposals. In more severe cases, violations can lead to fines that accumulate over time, ultimately delaying or preventing the renewal of mandatory licenses and permits.
Case in point: In 2022, a construction company expanding from the UAE into Saudi Arabia faced significant setbacks due to noncompliance. The company faced a Ministry of Labor services blockage that prevented it from issuing work visas. At the same time, it was unable to obtain a crucial GOSI certificate, an essential requirement to prove compliance on government projects. These issues nearly cost the company a project with the Saudi Public Investment Fund (PIF).
How Foreign Companies Can Ensure Full Compliance with Local Laws
Given the frequent updates to Saudi regulations on labor, taxation, and governance, businesses must continuously monitor legal changes, conduct compliance audits, and update processes accordingly.
Maintaining accurate records on government portals is equally important, as non-compliance in one area can restrict access to critical services such as visa issuance and license renewals.
Engaging a regulatory compliance consulting service can help businesses stay on track, as these specialists are well-equipped to proactively manage compliance risks while minimizing errors.
As companies grow, expand their customer base, and diversify their offerings, their regulatory obligations also increase. This makes the professional expertise and guidance of third-party consultants invaluable for foreign businesses aiming to establish a sustainable, long-term presence in Saudi Arabia.
Frequently Asked Questions
- What are the rules and regulations in Saudi Arabia?
In 2025, Saudi Arabia introduced several regulatory updates to streamline business setup and strengthen compliance.
Foreign companies must obtain the appropriate MISA license and register with the Ministry of Commerce under a new unified Commercial Registration (CR) system, which consolidates branch activities under one record.
Moreover, trade name rules have also been modernized, allowing non-Arabic names, number usage, and name reservations, while ensuring stronger protection against duplication.
Companies are still required to update CR information annually, even though registrations no longer expire.
- What are the requirements for Saudi Arabia?
For foreign companies intending to do business in Saudi Arabia, it is important to secure an MISA investor license, choose a unique trade name and locally registered office, prepare the Articles of Association, obtain a Commercial Registration (CR), and register with the Chamber of Commerce. These steps are what constitute the first stage of the Saudi market expansion.
- What are the new rules for Saudi Arabia 2025?
Commercial Registration (CR) Changes
- New “Commercial Registration Law” changes: a unified CR system, where branches’ activities are under one principal CR.
- Existing companies have a five-year grace period to fix any inconsistencies in branch CRs, consolidating branches under a unified system.
- Even though the CRs will no longer expire, companies must confirm/update their CR information annually, else risk suspension/cancellation.
Saudization (Nitaqat) Policy Expansions:
- Saudization requirements (nationalization quotas) are being increased. More professions are now subject to Saudization: 269 professions, including health, dentistry, accounting, and engineering.
- Phased implementation through 2025. The government will provide support for recruitment and training to help businesses comply.
New Trade Name Law
- Advance reservation of trade/tradenames with possible extension.
- Use of non-Arabic names/transliterations/numbers allowed.
- Trade names are independent assets.
- Stronger protection for reserved names; uniqueness requirement (trade names must not resemble others).
- What is SAMA compliance in Saudi Arabia?
It refers to the regulatory framework established by the Saudi Central Bank (SAMA), which financial institutions and fintech firms are required to follow as a fundamental aspect of their business operations.
- What is SOC 2 compliance in Saudi Arabia?
SOC 2 Certification in Saudi Arabia is an auditing procedure that ensures your service providers securely manage your data to protect the interests of your organization and the privacy of its clients.
- What does a regulatory consultant do?
A compliance management provider like AstroLabs enables companies to comply with a range of regulatory obligations during the setup and post-registration phases by enforcing proactive audits, predictive risk management measures and handling compliance issues more effectively.
With more than 12 years of expertise, AstroLabs has become the foremost partner for business setup and regulatory compliance in Saudi Arabia, supporting over 850 high-growth companies in launching successfully, ensuring seamless operations, and driving long-term growth.
- What is ZATCA?
ZATCA refers to the Zakat, Tax and Customs Authority, responsible for the collection of taxes in Saudi Arabia.
- What is the legal framework for financial institutions and fintechs in Saudi Arabia?
For companies looking to enter the Saudi fintech market, key startup documentation includes attested Commercial Registration or Certificate of Incorporation, Memorandum and Articles of Association, a pitch deck/startup brief, and support letters from incubators or venture capital.
Established businesses need, in addition, audited financials.
After setup, fintechs must register with either SAMA or the CM, depending on their business activity (payments, banking, securities etc.), often via regulatory sandbox programs.