Saudi Arabia Entity Setup

A limited liability company is a popular corporate vehicle among foreign investors in Saudi Arabia. The personal liability for each of the partners/shareholders is limited to the individual partner’s contribution to the company’s share capital. LLC is one of the most common forms of legal entity chosen by foreign investors in the Kingdom of Saudi Arabia. Establishing an LLC is a multistep process. Incorporating an LLC may take up to several months from the date of submission of application to the Ministry of Investment of Saudi Arabia (MISA).

Foreign investors may also choose to establish a branch instead of an LLC to do business in the KSA. A branch operates on behalf of the parent company (foreign registered company) and has no separate legal existence in KSA. Registration of a branch in relation to issuance of the foreign investment license by MISA and the commercial registration certificate by MOC follows the same general procedure as that of an LLC.

Although there is no statutory minimum capital requirement, in practice, MISA often requires foreign LLCs to have a capital of at least SAR500,000. In certain types of activities, specific minimum capital is prescribed by MISA.

The Ministry of Investment of Saudi Arabia (MISA) offers foreign ownership of a company in the KSA without a local partner and minimal government restriction. MISA registration/license is required for a business to establish with 100% foreign ownership in Saudi Arabia.

The general manager needs to be a resident in the KSA. Directors are not required to be nationals or residents. There are specific requirements regarding the nationality of shareholders in certain activities.

A corporate secretary as a formal role is not required however similar activities are undertaken by the Government Relations Officer (GRO) which is required.

A local office lease and local address is required.

Companies must secure a foreign business license approval from the Ministry of Investment of Saudi Arabia – MISA (formerly known as the Saudi Arabian General Investment Authority). A MISA license enables foreign investors to legally and independently serve the local market without a Saudi sponsor.

Ministry of Commerce’s mission focuses on improving the business environment in Saudi Arabia with various relevant agencies locally and internationally to bolster confidence between the merchant and consumer and support the national economy.

Ministry of Labor and Social Development was established under the Royal Decre to formulate the general policy for social and labor affairs in the Kingdom within the values, principles and systems of the Kingdom of Saudi Arabia. It also oversees participation in guiding the social development in the Kingdom in a balanced direction aimed to raise the awareness of the citizens, improving their standard of living and creating the elements of a decent life within their spiritual and moral values and supporting them to build an integrated society. 

The General Organization for Social Insurance, or GOSI, is a Saudi Arabian government agency that’s responsible for managing social insurance for employees in the country. This is a mandatory insurance program, which means that not paying the required contributions can result in significant fines and penalties for both employees and employers.

The Authority aims to carry out the work of collecting Zakat and collecting taxes and achieving the highest degree of commitment by the establishments. Zakat system is an e-service provided by Zakat, Tax and Customs Authority and This service enables the beneficiary to recover payments for an unusual taxpayer.

National Post (SPL) is the government agency that oversees postal and logistics throughout Saudi Arabia. A National Address (or registered address) is mandatory and this is registered through the SPL agency.

The Ministry of Interior achieves kingdom security and stability, provides peace and safety for its citizens, and fights all forms of crime, vice, and corruption. It also maintains Saudi society’s safety, ensures its advance, and protects pilgrims safety from threats.

The final step is to decide the bank to work with. Saudi Arabia has rapidly developing banking infrastructure that startups and hyper growth companies alike benefit from. The process of establishing a bank account can be an unexpectedly long process that many companies do not sufficiently plan for. This can include extensive application documents, notarized director documents, KYC documentation and in person signatures. Common local banks in Saudi Arabia include Saudi National Bank, Al Rajhi, Riyad Bank, Saudi British Bank and Banque Saudi Fransi.

The complete solution provided by the Ministry of Labor and GOSI to manage your employees’ affairs. It is a high-level electronic system for organizing the payment of wages, developing monthly payroll processes, and proactively detecting violations of the wage protection system. It contains immediate and accurate information about the status of wages, facilitates their calculation and raises the level of their protection.

Qi is a unified and integrated platform from the Ministry of Human Resources and Social Development in Saudi arabia, which provides access to all labor sector services, with unified access, so that the platform works to improve the user experience and speed up the procedures and mechanisms followed to be a meeting point between establishments and workers in the private sector.

Muqeem” service allows organizations to review its resident workers data and complete their transactions online, anytime and anywhere.

GOSI was established to implement the provisions of the Social Insurance Law IN Saudi Arabia and follow-up the process of achieving the compulsory insurance coverage, collecting contributions from employers and paying benefits for the eligible contributors or their family members.

Health insurance is considered a necessity for obtaining and renewing residency, as well as a basic condition for employing Saudis and non-Saudis in the Kingdom of Saudi Arabia.