As one of the fastest-growing economies in the region, Saudi Arabia has become a top destination for business professionals worldwide.
If you're wondering how to set up a business in Saudi Arabia, this article outlines the golden 5 key steps that will guide you in legally establishing a 100% owned business.
How to set up a business in Saudi Arabia?
By following these 5 key steps, you'll be on your way to successfully establishing a 100% foreign-owned business in the Kingdom.
1. Building your business plan
Before taking steps, it is crucial to define your business goals, target market, and financial expectations. A solid plan lays the foundation for a successful launch in Saudi Arabia.
A- Select your business activity
Based on your expertise, available capital, and a comprehensive analysis of market demand and sector performance within the Saudi Arabian economy.
B- Determine your business structure
The business structure is the legal form under which a company operates. This structure defines how the business is owned, managed, and taxed.
C- Common business structures include:
- Sole Proprietorship: Owned by one person.
- Limited Liability Company (LLC): Offers limited liability and flexible management.
- Joint Stock Company (JSC): Owned by shareholders, suitable for larger businesses.
- Branch of a Foreign Company: Extension of a parent company abroad.
D- Crafting a comprehensive business plan
Creating a solid business plan is essential for launching a successful company in Saudi Arabia.
It outlines your goals, target audience, risks, and strategies in operations, marketing, and finance. More than finances, it’s your roadmap for growth.
A strong plan helps you adapt to market shifts and builds investor confidence, guiding smart decisions from day one.
2. Obtaining investment licenses from MISA
To start a business in Saudi Arabia as a foreigner, first apply for an investment license from MISA.
This license gives you the legal go-ahead to establish and run a company in the Kingdom.
For a 100% foreign-owned LLC, a minimum share capital of SAR 500,000 is required, which must be deposited into your company’s bank account as part of the registration process.
How to get a MISA business license in SA?
The application for an investment license from the Ministry of Investment (MISA) is fully online. Here's how it works:
A- Create an account on the MISA portal: Start by registering as a foreign investor through the official Ministry of Investment Saudi Arabia website.
B- Select your business activity: Choose the business activity your company will operate under. This will determine the type of license and any additional approvals needed.
C- Prepare the required documents including:
- The parent company’s commercial registration.
- A shareholder resolution approving the Saudi branch or entity.
- Audited financial statements for at least one year.
- Passport copy of the authorized representative.
- The company’s Articles of Association.
All documents must be translated into Arabic by a certified translator.
D- Submit the application online: Upload all documents and fill out the application via the online portal.
E- Pay the licensing fee for the first year: The initial fee for the investment license is SAR 12,000 for the first year.
F- Receive your license: Once approved, MISA will issue your investment license, allowing you to move forward with registering your company in Saudi Arabia.
Obtaining an investment license from the Ministry of Investment (MISA) in Saudi Arabia typically takes a few weeks after submitting your application.
Why is getting a MISA license essential?
Without the investment license you will be unable to move on building operating steps for your business, beside that it MISA license offers your company a good chance to grow legally through:
100% Foreign Ownership with full control over your business without the need for a local sponsor.
Business license is required to open a business bank account to manage finances and facilitate transactions.
Certain tax advantages may be available to licensed businesses, making operations more cost-effective.
Licensed businesses may qualify for government funding and support programs to boost growth and sustainability.
Read also: Types of Business Licenses in Saudi Arabia.
3. Registering your business with the Ministry of Commerce (MoC) and other authorities
A- Registration in the Ministry of Commerce (MoC):
After obtaining the MISA investment license, the next mandatory step is to register your company and reserve your trade name with the Ministry of Commerce to receive your Commercial Registration (CR).
This official trade license grants your company the legal right to operate under its chosen name in Saudi Arabia.
B- Additional governmental bodies:
Depending on the nature of your business, you may also need to complete additional registrations with other government bodies, such as:
Chamber of Commerce: You must register with the local Chamber of Commerce to access trade services and get approval for many official procedures.
Municipal License (Baladiya License): If your business has a physical location (office, store, factory), you’ll need a municipal license from the local municipality for that specific property.
General Authority of Zakat & Tax (ZATCA) Registration: You need to register with ZATCA for tax compliance, including VAT if your business income exceeds the threshold.
Social Insurance (GOSI) Registration: If you're hiring staff, your company must register with GOSI to manage social security and employment benefits for your employees.
Sector-specific licenses: Depending on your business activity—such as food, healthcare, logistics, or others—you may also need sector-specific licenses.
For example:
- Food/Pharmaceutical Industry: SFDA license required.
- Financial Services: SAMA approval needed.
- Hospitality Sector: Ministry of Tourism approval necessary.
4. Open a corporate bank account and register for taxes in Saudi Arabia
A- Opening a Corporate Bank Account:
Once you obtain your licenses, the next step is opening a corporate bank account in Saudi Arabia.
This account is crucial for handling company funds and building financial credibility.
To open one, you'll typically need your Commercial Registration (CR), MISA license, and Articles of Association.
Banks may request owner details and authorized signatories. Choose a bank familiar with foreign investors to simplify the process and ensure smooth financial operations.
B- Registering for Taxes:
You must also register with the General Authority of Zakat and Tax (ZATCA) to stay compliant with Saudi tax laws.
This includes registering for Zakat if you're a Saudi-owned business or corporate income tax if you're foreign-owned.
Additionally, if your annual revenue exceeds SAR 375,000, VAT registration is required. ZATCA will then issue a tax number, which is essential for invoicing, filing returns, and maintaining full legal compliance.
5. Secure Office Space and Comply with Saudization Regulations
Ensure your business has a suitable location that meets municipal requirements, and align your hiring practices with Saudization regulations by employing the required percentage of Saudi nationals.
A- Secure Office Space:
If your business involves physical operations, securing a location for your office or store is crucial.
This space must meet the municipality's requirements and align with your business type.
B- Comply with Saudization:
Saudization refers to the requirement for businesses to employ a certain percentage of Saudi nationals.
Ensure that your hiring practices align with these regulations to avoid penalties.
Top 5 business trends for foreigners in Saudi Arabia in 2025
Renewable Energy: Saudi Arabia is heavily investing in solar and wind energy, presenting significant opportunities in green technologies.
ICT (Information & Communication Technology): Expansion in digital infrastructure and tech startups is driving innovation and connectivity.
Healthcare & Wellness: Rising demand for advanced healthcare services and wellness solutions as the population grows and health awareness increases.
Tourism & Hospitality: Vision 2030 is fueling growth in the tourism sector, offering business opportunities in hospitality and related services.
Financial Services & Fintech: A surge in fintech innovation, offering new solutions in payments, banking, and investment services.
Final Thoughts
Starting a business in Saudi Arabia has never been more accessible, with streamlined processes and opportunities in diverse industries.
By following the right steps, you can establish a successful business with full ownership and take advantage of the Kingdom’s growing economy.
Ready to set up your business in Saudi Arabia? Contact us at Motaded today to learn more about how to navigate the process and launch your business in the Kingdom!
FAQs about how to set up a business in saudi arabia
How long does it take to start a business in Saudi Arabia?
It usually takes a few weeks to complete all the legal steps, including getting the MISA license, registering with the Ministry of Commerce, and opening a business bank account.
Can foreigners own 100% of a business in Saudi Arabia?
Yes, foreigners can legally own 100% of a company in Saudi Arabia if they obtain an investment license from the Ministry of Investment (MISA).
What is the minimum capital required for a foreign company in Saudi Arabia?
For a 100% foreign-owned LLC, the required minimum capital is SAR 500,000, which must be deposited in a Saudi bank account during registration.
What is the best business for foreigners in Saudi Arabia?
The best businesses for foreigners include technology, healthcare, retail, logistics, renewable energy, and tourism sectors, all supported by government incentives.
How do I start a small business in Saudi Arabia?
To start a small business, foreigners need to obtain an investment license, register with relevant authorities, open a corporate bank account, and follow industry-specific regulations.
Is Saudi Arabia a good place to start a business?
Yes, Saudi Arabia offers a growing economy, government incentives, and favorable policies, especially under Vision 2030, making it an attractive destination for foreign investments.