Company Formation in Saudi Arabia: A Complete 2025 Business Guide
Saudi Arabia has taken a bold step toward building a strong business environment. The government aims to attract global investors while supporting local entrepreneurs through simplified laws and transparent regulations. In recent years, the country has become a regional hub for industries like oil, technology, healthcare, and tourism. This guide, crafted by Mubarak Al Ketbi (MAK) Auditing, explains everything investors must know before setting up a company in Saudi Arabia.
1. Introduction to Business Environment in Saudi Arabia
Saudi Arabia stands as one of the fastest-growing economies in the Middle East. The nation possesses nearly 20 % of the world’s oil reserves and ranks among the top members of OPEC. Yet, its growth no longer depends only on petroleum. With initiatives like Vision 2030, Saudi Arabia now focuses on diversification and private-sector participation.
Over the last decade, the economy has shown consistent growth of about 4 % per year. International brands like Google, Uber, and Siemens have already established offices in Riyadh and Jeddah. Their entry has boosted employment and innovation across various sectors. For investors, the message is clear — Saudi Arabia welcomes business expansion with open arms.
2. What Is Company Formation in Saudi Arabia?
Company formation refers to the legal process of registering a business entity under Saudi commercial law. The process includes choosing a business structure, obtaining licenses, and registering with tax and labor authorities. Each step must align with local regulations issued by the Ministry of Investment (MISA) and the Ministry of Commerce (MoC).
At Mubarak Al Ketbi (MAK) Auditing, we assist investors in understanding every phase — from selecting a structure to obtaining final approvals. Our experts simplify the legal language, handle document translation, and ensure full compliance.
3. Why Choose Saudi Arabia for Your Business Setup?
Saudi Arabia provides several reasons why investors prefer it over other markets in the region:
- Strategic Location: Located between Europe, Africa, and Asia, the country offers unmatched logistics advantages.
- Economic Reforms: New policies reduce bureaucracy and support foreign ownership.
- Incentives for Investors: The government grants tax exemptions, low import duties, and land-lease benefits.
- Skilled Workforce: With over 50 % of citizens under 30, the country enjoys an energetic and educated labor force.
- Political Stability: The Kingdom maintains internal security and regional peace, offering a predictable business environment.
- Infrastructure Growth: Ongoing investments in roads, airports, and smart cities strengthen connectivity.
- Vision 2030: This program promotes entrepreneurship, digital transformation, and industrial innovation.
These combined factors create a stable foundation for both startups and global corporations.
4. How to Choose a Reliable Company Formation Consultant
Selecting the right consultancy can make or break your setup journey. When you hire Mubarak Al Ketbi (MAK) Auditing, you gain access to certified professionals who understand every regulatory requirement.
When evaluating a consultant, consider the following:
- Experience: Verify years of practice in Saudi incorporation procedures.
- Pricing: Ensure fees are transparent and justified by service quality.
- Customization: Choose a firm that tailors solutions according to your business model.
Our company ensures that each client receives personal guidance, proper documentation, and timely updates throughout the registration process.
5. Selecting the Legal Structure in Saudi Arabia
Your business success depends heavily on choosing the right structure. Saudi law offers several frameworks:
| Legal Structure | Key Features | Shareholder Requirement | Capital Requirement |
|---|---|---|---|
| Limited Liability Company (LLC) | Offers limited liability; flexible operations. | Minimum 2 shareholders. | SAR 100,000 minimum. |
| Joint Stock Company (JSC) | Ideal for large projects and fundraising. | 5 founders minimum. | Private SAR 2 M / Public SAR 10 M. |
| Sole Proprietorship | Full ownership and control; unlimited liability. | Saudi nationals only. | No specific minimum. |
| Branch of Foreign Company | Operates directly under parent license. | May require local sponsor. | Varies by sector. |
| Limited Partnership | Combines general and limited partners. | At least 2 partners. | No specific minimum. |
| Joint Venture | Collaboration between local and foreign firms. | 2 or more entities. | As per agreement. |
Our experts at Mubarak Al Ketbi (MAK) Auditing analyze your goals and recommend the structure that ensures compliance and growth.
6. Compliance and Tax Regulations in Saudi Arabia
All companies must follow tax and regulatory obligations governed by ZATCA (Zakat, Tax and Customs Authority).
| Tax Type | Rate & Details | Frequency |
|---|---|---|
| Corporate Income Tax | 20 % on net profits for foreign entities. | Annually (within 120 days of year end). |
| Withholding Tax | 5 %–20 % on payments to non-residents. | As per transaction. |
| VAT | 15 % on goods and services (some zero-rated items). | Monthly or quarterly. |
| Zakat | Religious contribution for Muslim businesses. | Annually. |
| Social Insurance (GOSI) | Covers health and pension benefits for employees. | Monthly. |
| Saudization Program (Nitaqat) | Sets minimum quota for Saudi employees. | Ongoing monitoring. |
Our firm provides full tax-compliance services, from VAT registration to audit representation, ensuring stress-free operations.
7. Step-by-Step Company Formation Procedure
Forming a company involves detailed legal procedures. Below are the essential steps that our consultants manage for you:
- Document Preparation: Gather passports, Memorandum of Association, and lease agreements.
- Apply for Investment License: Get approval from MISA.
- Draft Articles of Association: Define objectives and capital structure.
- Obtain Commercial Registration (CR): Register with MoC.
- Register National Address: Secure official location with Saudi Post.
- Register for Taxes & Social Insurance.
- Open Corporate Bank Account.
- Appoint General Manager: Apply for Iqama (residency).
- List Company with Authorities: Maintain record with MISA and ZATCA.
With Mubarak Al Ketbi (MAK) Auditing, these tasks become seamless — we coordinate directly with ministries to ensure timely completion.
8. Key Considerations Before Company Setup
- Local Sponsor: Certain activities require a Saudi partner.
- Work Visas: Foreign employees must obtain permits.
- Business Advisory: Professional guidance saves time and avoids penalties.
- Market Research: Understanding local demand ensures faster profitability.
Our advisory team evaluates your sector’s feasibility before initiating the formation process.
9. Required Documentation
To register your company, prepare:
- Certificate of company name reservation.
- Memorandum and Articles of Association (in Arabic).
- Copies of directors’ and shareholders’ passports.
- Commercial registration of parent company (if any).
- Lease agreement of office space in Saudi Arabia.
- Power of Attorney for representatives.
10. Challenges in Setting Up a Business in KSA
While the market is full of opportunities, new investors may face challenges:
- Complex regulations without expert support.
- Identifying trustworthy local sponsors.
- Understanding Saudization requirements.
- Adhering to strict tax filing and reporting deadlines.
Partnering with Mubarak Al Ketbi (MAK) Auditing eliminates these risks through precise legal and accounting supervision.
11. How Professional Consultants Help
Consultants play an essential role in simplifying company formation:
- Documentation Assistance: All applications and translations handled properly.
- Tax & Compliance Guidance: Ensure alignment with ZATCA rules.
- End-to-End Support: We liaise with ministries for smooth approval.
Our firm’s team possesses multi-disciplinary expertise — finance, law, and taxation — to help your business start strong.
12. Why Choose Mubarak Al Ketbi (MAK) Auditing for Company Formation
Choosing Mubarak Al Ketbi (MAK) Auditing means working with an authorized auditing and consultancy firm recognized by UAE and GCC authorities. Our consultants hold certifications from bodies such as ACCA, AICPA, and the UAE Ministry of Economy.
We ensure:
- Transparency in Process
- Legal Accuracy of Documents
- Affordable Service Packages
- Quick Turnaround Times
Our goal is to help every investor build a compliant, efficient, and profitable company in Saudi Arabia.
13. Your Path to Success
Saudi Arabia’s market is expanding rapidly across logistics, e-commerce, and energy transition. With government-backed infrastructure and a predictable economy, now is the perfect time to establish your footprint.
Mubarak Al Ketbi (MAK) Auditing stands beside you at every step — from registration to tax filing to growth planning. Our expertise makes company formation stress-free and ensures long-term compliance.
14. What Can Help — Mubarak Al Ketbi (MAK) Auditing
At Mubarak Al Ketbi (MAK) Auditing, we turn your business idea into reality with precision and confidence. We handle each legal and financial aspect, so you can focus on growth. Remember, Rome wasn’t built in a day, but with the right partner, your Saudi venture can rise fast.
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Contact / WhatsApp: +971 50 276 2132
