The registration of businesses ranges from very simple to moderately complex in Saudi Arabia, as the market is growing and recent company-friendly reforms have been implemented. In this article, we explain the methods for registering a foreign business in Saudi Arabia.
How Can I Register My Foreign Company in Saudi Arabia?
Establishing foreign national entities in Saudi Arabia can initially seem like a challenging task. The process becomes much easier. If you plan to expand your business or start a new venture in the Kingdom:
The Saudi government is actively working to facilitate access to foreign capital.
Step 1: Get the Right License
- Start by preparing an application for an investment license.
- Submit the application to the Ministry of Investment (MISA).
- This license gives your foreign entity the legal right to operate in Saudi Arabia. You will need to submit key documents, including:
- Your company profile
- Financial statements
- Proof of your company's activities in its home country.
Step 2: Choose a Legal Structure
Think about the operational model of your company. The most popular legal forms among foreign businesses are branches and limited liability companies (LLCs). The ideal option depends on your objectives and the level of authority you wish to retain.
Step 3: Reserve a Company Name
Ensure you select a name within the bounds of your locality and avoid anything offensive or similar to existing registered names. Approval of the name is required prior to moving to the next step.
Step 4: Complete Registration
As soon as you receive approval for your name, you can apply for the Ministry of Commerce for a Commercial Registration (CR) by submitting the required documents. This is essentially your company's national ID.
Step 5: Register With Other Authorities
You’ll also need to register with tax, labor, and insurance bodies:
- Zakat, Tax, and Customs Authority
- Ministry of Human Resources
- GOSI (for employee insurance)
- Saudi Post (for national address)
- Chamber of Commerce (based on your location)
Implementing a foreign company in Saudi Arabia requires some planning - however after preparing the documentation, everything else is a mere formality. It's a burgeoning market that deserves more attention.
Read also: Why Invest in Saudi Arabia? A Concise Guide for Foreign Investors.
Can a Foreigner Own 100% of a Business in Saudi Arabia?
Saudi Arabia is now offering more flexibility to foreign investors than ever before. One of the most significant changes is the ability for foreign investors to own 100% of a business across various sectors.
This major shift was introduced by the government as part of its efforts to attract and boost foreign investment, strengthening the Kingdom’s position as a global business hub.
Who Is Eligible?
In order to gain unrestricted ownership, a business plan along with a documented solid reputation (should the business already exist abroad) alongside economic and legal criteria outlined by the government is required.
In this scenario not only the funds, but also experience and long-term commitment to the region becomes a necessity.
What Makes This Achievable?
This step is aligned with Saudi Arabia’s Vision 2030. The Kingdom plans to diversify its economy by developing other sectors in addition to oil. To achieve this, they are liberalizing the economy and cutting red tape for foreign investors and businesses.
Things to Keep in Mind
- Foreign investment is still capped in some sectors. Each activity is assigned a specific level which has different rules.
- The approval process involves a thorough review, so attention to detail is key.
- Legal representation is strongly recommended to avoid mistakes or delays.
Why It Matters
Having full ownership of your business means you retain complete control over all decisions, including how profits are distributed and how the company is managed.
This structure also fosters greater trust among international investors. Knowing that the business operates under your name and brand adds a layer of credibility.
How Much Does It Cost foreign company registration in Saudi Arabia?
If you are eagerly seeking to establish a company in Saudi Arabia, careful and strategic budget planning is absolutely crucial. Although the overall process has been impressively streamlined.
For a smoother, more seamless experience, here are the detailed, step-by-step insights into your expected expenses during the exciting company registration stage.
1.Reservation of Trade Name
The first step is to officially approve a name for the company.
Cost: Around SAR 50 for name approval through the Ministry of Commerce.
2.Commercial Registration (CR)
The CR is your official license to operate. The fees you will encounter depend on the type and size of your business.
Cost: Usually between SAR 1,200 and SAR 2,000 per year, plus possible online service fees.
3.MISA License (If Foreign Owned)
If you’re a foreign investor, you’ll need a license from the Ministry of Investment (MISA) to operate legally in Saudi Arabia.
Cost: Starts from SAR 2,000 and goes higher depending on activity and structure.
4.Municipality License (Baladiyah)
Issued by local municipalities, this license depends on your city and business activity.
Cost: Varies, but commonly around SAR 1,000 to SAR 3,000 annually.
5.Chamber of Commerce Registration
This is mandatory for all businesses. Membership levels affect cost.
Cost: Around SAR 1,500, based on business size and location.
6.Legal, Notarization & Translation
Preparing your Articles of Association and other legal documents may involve legal firms.
Cost: From SAR 5,000 to SAR 15,000, depending on complexity and services used.
Translations of foreign documents may add another SAR 3,000 to SAR 5,000.
7.Corporate Bank Account
Some banks may require a deposit to activate the account.
Minimum Deposit: Often SAR 10,000 or more, depending on bank policy and company type.
8.Employee Visas & Labor Registration
Businesses intending to hire foreign employees must obtain work visas and residency permits (Iqama) for their staff.
Cost per employee: Typically SAR 7,000 to SAR 15,000 annually, including work permit, medical check, and insurance.
9.Additional Costs
You may encounter other small but important fees:
- Company Stamp: Around SAR 120
- Electronic Signature (Muqeem or GOSI system): Varies
- VAT Registration (if applicable): No fee, but required once revenue reaches the threshold
10..Total Estimated Budget
If you're registering a foreign-owned company, expect to spend between SAR 15,000 to SAR 30,000 to get fully licensed and operational—excluding office rent or employee salaries.
Read also: The most important differences between the updated investment system and the foreign investment system.
Can a Foreign Company Open a Bank Account in Saudi Arabia?
A corporate visa allows you to open a corporate account with an international bank in Saudi Arabia. However, there are earlier mentioned hoops you have to jump through first without completing them.
Who Can Open a Bank Account?
Foreign businesses must already be established legally in the Kingdom. This means having:
- A valid Commercial Registration (CR)
- A business license issued by MISA (Ministry of Investment)
- A registered national address
- An authorized signatory with a valid residency permit (Iqama)
These are the basics every foreign firm must meet before approaching any bank.
Documents You’ll Need
To begin the process, prepare the following:
- Articles of Association (AoA) and Memorandum of Association (MoA)
- Passport copies and IDs of key shareholders or directors
- A board resolution approving the account and naming the person authorized to handle it
- Proof of business address and legal formation documents
How to Open the Account
- Choose a bank: Local and international banks are available in Saudi Arabia. Select based on your needs.
- Submit your documents: File all required paperwork with your chosen bank.
- Bank review: The bank performs background and compliance checks.
- Approval and activation: Once approved, you deposit the required funds to activate the account.
How Long Does It Take?
This might take anywhere from 6 to 8 weeks depending on the bank and the documentation at hand. Most commonly, delays occur due to incomplete or unclear papers qualifying the requirements.
What is the Foreign Ownership Limit in Saudi Arabia?
There’s good news for investors in Saudi Arabia: new provisions now allow complete ownership in various sectors, providing greater access for foreign investors.
However, expanding opportunities is not as simple as a one-size-fits-all approach. The first step to entering this promising market is understanding the parameters and requirements that come without restrictions.
Where 100% Foreign Ownership Is Allowed
Saudi Arabia now permits complete foreign ownership in most non-restricted sectors. These include:
- Technology and digital services
- Education and training institutions
- Medical and healthcare centers
- Tourism projects and hotel operations
- Manufacturing in non-defense-related fields
These make part of the Kingdom’s Vision 2030 plan which seeks to boost foreign direct investment and drive spending beyond oil.
To get these, firms should obtain operating licenses through the MISA and fulfill compliance obligations on activities undergoing.
Industries That Still Have Ownership Restrictions
Some sectors maintain specific limits or conditions on foreign participation, such as:
- Military manufacturing
- Oil exploration and drilling
- Private security and surveillance services
- Recruitment agencies
- Real estate in Mecca and Medina, which is limited to partial foreign ownership through public companies
These industries are either considered sensitive to national security or subject to cultural and legal constraints.
Additional Considerations for Investors
In some open sectors, foreign investors may still be required to meet higher capital thresholds, especially in wholesale or retail. Operating across multiple countries may also be a condition in certain licenses.
Due diligence is critical. The list of permitted activities and restrictions is updated periodically by MISA. Getting advice from local professionals can help ensure that your investment aligns with the current regulations.
Who Can Open a Bank Account Without an Iqama?
It is possible to open a bank account in Saudi Arabia without an Iqama (residency permit) under certain conditions, particularly for individuals on short-term or business visas.
According to the Saudi Arabian Monetary Authority (SAMA), some expatriates may be eligible to open a bank account without an Iqama if they meet certain criteria:
- A business visit visa
- A government visit visa
- A scientific or professional visit visa
These provisions are typically for individuals engaged in assignments with government or quasi-government entities.
Required Documentation
To open an account under these circumstances, you will generally need:
- A valid passport with at least six months of validity
- The relevant visa (e.g., business visit visa)
- An official letter from your employer detailing the purpose and duration of your visit
- Proof of a temporary address in Saudi Arabia
- A completed bank-specific account application form
Note that the availability of this option may vary between banks, and some may require additional documentation.
While opening a bank account in Saudi Arabia without an Iqama is feasible for specific visa holders, it's subject to certain conditions and limitations. Ensure you have all necessary documentation and consult with the bank to understand their specific requirements.
Ready to Take the First Step?
Setting up a business in Saudi Arabia comes with great potential, but it also requires careful planning and local insight. Since each business has its path based on industry, location, and size it’s important not to rely on general advice alone.
Looking to launch or expand with clarity?
Partner with the experts at Motaded to receive tailored guidance, efficient company setup, and full regulatory support. Start your business journey in Saudi Arabia the right way to reach out to our Team in Motaded today.
FAQs about Foreign company registration in Saudi Arabia
Is it possible for a foreigner to own 100% of a business in Saudi Arabia?
Yes, the Ministry of Investment (MISA) licensing allows full foreign ownership in most sectors.
How much does it cost to register a company in Saudi Arabia?
Depending on the business activity, costs can vary, but they usually fall between SAR 15,000 and SAR 30,000.
Can a foreign company open a bank account in Saudi Arabia?
Yes, foreign businesses can open a bank account after obtaining the required licenses and registrations, provided that they adhere to Saudi banking regulations.
Do I need a local partner to open a business in Saudi Arabia?
Foreign investors can create wholly-owned companies in the majority of industries, so no local partner is necessary.
Can I get professional help to register my business in Saudi Arabia?
Motaded provides all-inclusive services to help with Saudi Arabian business setup, licensing, and compliance.