The Kingdom of Saudi Arabia is a sovereign Arabic Islamic monarchy based on the religious law. The country has a unique legal system which combines the principles of Sharia and modern civil law.
Sources of law in Saudi Arabia, besides Sharia based on Coran, Sunna, fatwas of the Supreme Mufti, are acts drafted by ministries and agencies and approved by the Majlis-ash-Shura (legislative body).
Legislation of Saudi Arabia (Article 3, Companies Law) provides for the establishment of the following types of local companies:
Unlimited liability company is a company that consists of two or more individuals who bear joint and several liability to the extent of all their property for debts and obligations of the company. A member of such a company acquires legal capacity of a merchant.
Limited partnership consists of two kinds of partners, one of which includes at least one partner that bears joint and several liability to the extent of all its property for debts and obligations of the partnership (general partner), and the other includes at least one partner whose liability is limited to the value of its share in the partnership’s capital (limited partner). A limited partner may not be a merchant.
Partnership is a company that is not disclosed to third parties, has no legal capacity, is not subject to the publication procedure and is not registered in the Commercial Register.
The authorized capital of a joint-stock company is divided into negotiable shares of equal value. A joint-stock company is fully liable for debts and obligations resulting from its activity.
The authorized capital of a joint-stock company at its incorporation must be sufficient for the attainment of its goals (at least SAR 500 000).
A joint-stock company is required to form a Board of Directors and hold annual meetings of shareholders.
Limited liability company is a company consisting of at most 50 members liability of which is separate from the financial liability of each member. A company bears exclusive liability for its debts and obligations. The owner of the company or its member is not liable for such debts or obligations.
Such companies are usually chosen for small and medium-sized business for simplicity of management and limited liability of its members.
It is also possible to open representative offices or branch offices of foreign companies.
A foreign company may only establish branch offices or representative offices in Saudi Arabia after obtaining a license from the Saudi Arabian General Investment Authority (SAGIA) and the Agency responsible for the regulation and supervision of the kind of activity or business conducted by the foreign company in the Kingdom.
The list of kinds of activity that are available to foreign members is limited. The Supreme Economic Council prohibits a number of kinds of activity for companies with foreign members (negative list). For example, activity connected with investment in real estate in Mecca and Medina, real estate brokerage or oil production activity is prohibited.
Foreigners may normally be 100% members of companies conducting service activities and providing some kinds of consulting (for example, engineering consulting).
Foreign members are also allowed for the following licenses:
For many kinds of activity, there is a threshold of compulsory membership of a local partner in the company; the minimum authorized capital that must be contributed by a foreign investor is set for some of them.
There may be other restrictions that the law imposes on companies with foreign members.
Limited Liability Company is the most popular form of conducting foreign business in Saudi Arabia.
The name of a company must not be similar (singular or plural) or identical to a name that is already registered.
The name of a company must not include an individual’s name, except when:
A company name must not include a title (attorney, prince, sheikh, father, etc.).
It is not allowed to add to a company name a kind of activity (trade, real estate, etc.).
All company names with religious implications are prohibited.
The name of a company must not contain the name of a non-Arabic country or city.
The name of a company must contain its form of incorporation (for example, limited liability company, LLC).
If a company is owned by one person, its name must contain an indication that it is a limited liability company owned by one person.
Procedure of incorporation of a local company in Saudi Arabia.
1) Reserving a company name (at least 3 options).
A company name must consist of Arabic or Arabized words and may not contain foreign words. The exception from this provision is names of foreign companies incorporated abroad, companies with well-known international names, and mixed capital companies, which must be determined by resolution of the Minister of Commerce.
2) The kind of activity and structure of the company need to be determined (member, director).
Most sectors / branches of business are available to companies with foreign members in Saudi Arabia. However, there are exceptions: a limited liability company in Saudi Arabia may not engage in banking, finance, savings, insurance or investment for the benefit of third parties.
3) Payment for services.
4) Preparation of documents for directors / attorneys / beneficiaries (originals or notarized copies):
The following documents are required for the company’s founder (legal entity):
Beneficiaries of the founder company must also provide personal data in writing: phone number, email address, residential address, country of residence, mother’s name, marital status, religion, citizenship.
5) Filing an application for an investment license from the Ministry of Investment of Saudi Arabia (MISA).
To obtain a license, the following needs to be provided:
All documents must be preliminarily legalized and translated into Arabic.
When incorporating a company under a power of attorney, a legalized power of attorney must be presented.
After reviewing the application, the Ministry issues a license. The company, however, will only be able to conduct its business after all the steps of the incorporation procedure are finished.
The review of an application normally takes around 1 month.
6) Registration of the company with the Registry.
The full set of incorporation documents must be provided to the Ministry of Commerce:
Based on the result of the check, the Ministry issues a Certificate of Commercial Registration (CR). This process normally takes around 6 weeks.
Upon commercial registration, one may proceed to the procedure of obtaining a residence visa (Iqama) for director.
7) Registration of the company with the Chamber of Commerce (CoC) within 30 days after obtaining the Certificate of Registration.
8) Opening the company’s migration file at the Ministry of Human Resources and Social Development (MSLD).
9) Issuance of a residence visa (Iqama) for director.
Director comes to Saudi Arabia on a regular visa and applies for a residence visa (Iqama).
This procedure must be completed within 90 days after director crosses the border of Saudi Arabia.
10) Obtaining a license from the relevant ministry (if necessary).
11) Opening a bank account and depositing the Authorized Capital into it.
The company must notify the Ministry of Investment of depositing the Authorized Capital into the account by filing a specialized form.
12) Finding an office and entering into a lease.
14) Registration of the company with ministries and obtaining remaining permits, in particular:
15) Registration of the company’s profile at portals, including:
Upon completion of the registration procedure, the following documents are issued to the company:
The head office of a company incorporated in accordance with legislation of Saudi Arabia must be in the territory of the Kingdom.
A limited liability company is required by law to lease a local physical office; a virtual office address will not be enough.
The law provides that a limited liability company has a seal.
Not allowed.
The company is managed by one or more directors from among members of the company or other persons.
Both a local citizen and a foreign person may be director of the company. A foreigner, however, will have to obtain a residence permit in Saudi Arabia (Iqama), provide a legalized diploma (Bachelor’s degree) and demonstrate at least 1 year of relevant experience.
Members appoint director(s) in the Memorandum of Association of the company or by a separate contract for a finite or indefinite period. If there are several directors, a board of directors may be formed by resolution of members.
Directors bear joint and several liability for losses incurred by the company, members or third parties as a result of breach of provisions of the Law or Articles of Association of the Company and as a result of offences committed by them when performing their duties.
A limited liability company (LLC) may be established by one person. The maximum number of members is 50. If the number of members exceeds 50, the company must be reorganized into a joint-stock company within one year.
There is no residency requirement for members of an LLC. A company may be established with 100% foreign ownership. But restrictions regarding available kinds of activity and ownership interest are imposed on foreigners.
Members of a company with foreign capital are preferred to be legal entities (that meet economic substance criteria). However, exceptions are possible. A local partner is required for some kinds of companies’ activities.
Liability of a limited liability company is separate from financial liability of each member and it bears exclusive liability for debts and obligations. The company’s beneficiary or member are not liable for such debts or obligations.
Currently, Saudi Arabia does not have specific legislation regarding disclosure of information on beneficial owners (UBO).
The authorized capital of a limited liability company at its incorporation must be sufficient to attain the company’s goals. There are no legal requirements regarding the size of the authorized capital of an LLC (except for some kinds of activity).
In practice, the Ministry of Investment of Saudi Arabia (MISA) may require a foreign member to contribute an authorized capital of at least SAR 500 000 (~ USD 135 000) as a condition for issuance of a license.
The authorized capital must be deposited into the bank account of the company opened with a bank of Saudi Arabia, which will allow the company to complete the incorporation procedure.
A company shall keep a special register containing full names of members, number of shares held by each of them and actions taken in connection therewith.
To speed up diversification of the economy and turn the Kingdom into a global hub of logistics and promising industries, Saudi Arabia has opened 5 special economic zones (SEZs) with special commercial rules.
Each SEZ is intended for serving a certain industry and does not compete with other SEZs.
Ras Al-Khair Special Economic Zone, the initial area of which is 20 sq. km, is a fast-expanding zone with two main sectors: King Salman’s international complex of maritime industry and services, and offshore cluster supply chain.
The SEZ is located near the port of Ras Al-Khair, the newest industrial port of the Kingdom, in the heart of the Persian Gulf. Around one-third of all oil sold by sea passes through the Persian Gulf.
Local and foreign investors do not only get access to the largest and technically perfect shipyard and fully integrated offshore cluster in the region of the Near East and North Africa, but also can find everything they need for their maritime potential of the future: construction of new vessels, development of innovative technologies and materials or maintenance, repairs and overhauls of existing vessels (maritime support vessels, drilling rigs or very large oil tankers).
King Abdullah Economic City (KAEC) is an investment center on the shore of the Red Sea in Saudi Arabia. It is located a short distance north of the trade capital Jeddah and is a city of 185 sq. km in area where King Abdullah Port recently named by the World Bank the most efficient port in the world and KAEC Industrial Valley that aims to develop the logistics and light industry of the Kingdom are located.
Over 100 multinational and Saudi companies have already settled down in KAEC.
The Jazan SEZ offers access to the largest port in the region for export and import of goods helping investors benefit and contribute to large-scale infrastructural projects in Saudi Arabia and around the world, backed by easy access to natural and industrial resources.
Jazan is part of the fruitful southwestern region of the Kingdom providing opportunities for production, recycling and distribution of food products to meet growing regional demand and solve food security issues in the whole region.
In King Abdulaziz City for Science and Technology, the Cloud Computing SEZ is the center for developing and newest technologies.
The SEZ has in place a unique flexible model that allows cloud service providers to provide diverse cloud computing services in the zone as well as build and use data processing centers throughout the Kingdom.
The Special Integrated Logistics Zone (SILZ) is the first SEZ of the Kingdom and the first project within the program of creation of the national logistics platform. It was officially launched by the Minister of Transport and Logistics Services in 2022.
Located in the heart of the capital of the Kingdom and covering an area of 3 sq. km, Riyadh Integrated is just 8 km from King Khalid International Airport and connected to it with a corridor that grants companies unhindered access to the airport’s infrastructure and global air routes. The strategic location of Riyadh Integrated allows companies to shorten the time between the arrival of goods in the zone and entrance to the largest consumer market of the Near East, which, in turn, allows companies to increase efficiency and reduce expenses to have an opportunity for serving their customers better.
Creation of special logistics zones near large airports of the Kingdom is an integral part of achieving one of the goals of VISION 2030 – turning the Kingdom into a global logistics hub. Being the first special logistics zone, Riyadh Integrated contributes to achieving the goal of the Saudi Aviation Strategy (SAS) of attracting 4.5 million tons of air freight and facilitates the passing of knowledge and experience to support development of local talents and local content as well as sets the standard for the promotion of logistics zones in the Kingdom and the region.
Pricefrom 28 000 USD
(including incorporation tax and state registry fee)
Pricefrom 25 000 USD
(including registered address and registered agent)
Price250 USD
DHL or TNT, at cost of a Courier Service
Paid-up “nominee director” set includes the following documents
Paid-up “nominee shareholder” set includes the following documents
Compliance fee is payable in the cases of: incorporation of a company, renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)? signing of documents
Price350 USD
simple company structure with only 1 physical person
Price150 USD
additional compliance fee for legal entity in structure under GSL administration (per 1 entity)
Price200 USD
additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)
Price450 USD
Price100 USD
