Business Setup

Cost of Doing Business in Saudi Arabia: What You Need to Know

Cost of Doing Business in Saudi Arabia: What You Need to Know

When we establish a business, we consider several variables, including our target audience, the products and services we will provide, and, most importantly, the cost.

If you want to start a business in Saudi Arabia, you should first grasp the costs of company formation in Riyadh.

Starting a business in any foreign nation can be difficult, particularly negotiating the legal and financial requirements.

However, by learning about the costs of starting a business in Riyadh, you will be able to better analyse your alternatives and select which sort of company structure is ideal for you.

In this post, we’ll go over all of the necessary steps for registering a new business in Riyadh, as well as the costs associated with starting your own firm.

With this information, you’ll be better prepared to make informed decisions about launching your own business in Saudi Arabia’s bustling metropolis. Explore our business setup services for detailed assistance in establishing your company in Riyadh.

Cost of doing business in Saudi Arabia

The cost of starting a business in Saudi Arabia is determined by a number of factors, including the sort of business you want to start, the amount of capital you have to invest, and the fees levied by various government organisations. Here’s a summary of some of the costs associated with establishing a corporation in Saudi Arabia:

Commercial Registration Certificate: A commercial registration certificate from the Ministry of Commerce and Investment (MOCI) costs SAR 500 ($133).

Municipal Licence: The cost of acquiring a municipality licence from the appropriate municipality varies according to the location and size of your business. It can range between SAR 1,000 ($267) and SAR 5,000 ($1,334).

Foreign Investment Licence: If you are a foreign investor, you must obtain a Foreign Investment Licence (FIL) from the Saudi Arabian General Investment Authority. The FIL costs between SAR 3,000 ($800) and SAR 8,000 ($2,133), depending on the size and type of your business.

The minimum capital necessary for establishing a company in Saudi Arabia varies depending on the sort of business you intend to start. The minimum capital requirement for a limited liability corporation (LLC) is SAR 10,000 ($2,667).

Professional fees: You may also have to pay professional fees to lawyers, accountants, and other experts who will assist you with the business creation procedure. The cost of these services varies based on the intricacy of your organisation and the breadth of the services supplied.

Overall, the cost of establishing a corporation in Saudi Arabia can range from SAR 15,000 ($4,000) to SAR 30,000 ($8,000), depending on the type of business and services required. It is critical to deal with a reputable advisor who can offer you a full analysis of the charges and guide you through the procedure.

Setting up a new business in a new nation may seem daunting due to the lengthy process, but not anymore. Thinkdirect BPO understands your problem, and we have a multitude of options available to assist you. You can get more information about us by contacting us right now.

Overview of Company Incorporation Services in Riyadh

To form a company in Riyadh, you must first grasp the various company incorporation services accessible. This section will provide an overview of the various services available for business formation in Riyadh.

Company incorporation services in Riyadh allow enterprises to electronically submit all applications for company incorporation contracts. This enables for a speedier and more effective process, lowering the time and expenses associated with starting a business.

In Saudi Arabia, there are various legal entities available for company incorporation. These include limited liability businesses (LLCs), joint stock companies (JSCs), and international company branches. The size and type of the business will influence the legal entity chosen.

The cost of forming a limited liability company in Saudi Arabia can range between 2,500 SAR and 12,000 SAR, depending on the size of the company and the kind of legal organisation. Limited liability and joint stock firms must also pay registration fees.

Entrepreneurs can use the Absher system to log into the national unified access system and submit applications for company incorporation. The Committee Examining Company Incorporation Applications reviews and approves company formation applications.

There may be obstacles to forming a corporation, and entrepreneurs should be informed of the requirements for starting a firm in Riyadh. It is critical to find a criminal attorney in Riyadh who can provide legal guidance and assistance throughout the company formation procedure.

Affordable legal services are accessible for business creation in Riyadh, and entrepreneurs should select the best company incorporation lawyer in Saudi Arabia who can give the essential legal assistance and skills. Entrepreneurs in Riyadh can successfully create and grow their firms if they have a thorough understanding of the available company incorporation services.

Cost of Establishing a Limited Liability Company in Saudi Arabia

Establishing a limited liability corporation in Saudi Arabia incurs significant charges that investors should be aware of. The General Authority for Investment and Free Zones levies a tax of one per thousand of capital, with a maximum of 1,000 SAR. The price for limited liability firms is 1,200 SAR, while companies are charged 800 SAR. It is crucial to note that these fees are subject to change and must be checked with the appropriate authorities.

When establishing a limited liability company in Saudi Arabia, investors must first determine the sort of legal entity they desire to form. This can be a joint stock company, a limited liability company, or a branch of a foreign corporation.

As part of the registration process, investors must pay the applicable fees and present the requisite papers. This may comprise identifying documents, proof of funding, and a business plan. It is recommended that investors seek the advice of a professional company formation agent or accountant to guarantee that the procedure is performed correctly and quickly.

The login process for national unified access via the Absher system must also be completed, which requires an active Saudi Arabian cell number. Once the application has been considered by the Committee Examining Company Incorporation Applications, there may be objections if specific conditions or standards are not met.

Investors could also consider employing a Riyadh criminal lawyer to ensure that all legal requirements are followed and that any potential legal difficulties are addressed during the incorporation process.

Despite the accompanying expenditures, setting up a limited liability company in Saudi Arabia provides investors with a number of advantages, including restricted liability protection and potential tax benefits. With reasonable legal services available, investors can feel confident about starting a corporation in Riyadh.

Types of Legal Entities for Company Incorporation

When it comes to business creation in Riyadh, it is critical to understand the many forms of legal entities accessible for registration. There are three basic options: limited liability company (LLC), joint stock company (JSC), and simple partnership firm.

An LLC is the most common type of legal structure and is best suited for small to medium-sized businesses. It offers shareholders limited liability protection, which means they are not personally accountable for the company’s debts. The minimum capital requirement for an LLC is 10,000 SAR (about $2,666 USD).

A JSC, on the other hand, permits corporations to issue public shares, making capital raising easier. However, this entails higher legal and financial duties, and the minimum capital requirement is 500,000 SAR (about $133,333 USD).

Finally, a simple partnership corporation is ideal for small firms with two or more partners. It is simple and inexpensive to set up, but partners are liable for the company’s debts with personal assets.

Before making a decision, speak with a legal practitioner to determine the best solution for your business’s aims and interests. With the incorporation services offered in Riyadh, you may submit your company incorporation applications electronically in a hassle-free fashion, ensuring that your business registration is seamless. Learn more about launching your online business in the Saudi Arabia market with our comprehensive guide.

Registration Fees for Limited Liability and Joint Stock Companies

When establishing a corporation in Riyadh, it is critical to be aware of the associated costs. The registration fees for limited liability and joint stock companies differ according to the kind of business.

A limited liability company’s registration charge is 1200 Saudi riyals. A joint stock company’s charge is 1600 Saudi riyals. It is crucial to note that these fees are in addition to the other expenses related with business formation.

It is advised that applications for company incorporation be submitted electronically. This enables a faster and more efficient operation. When submitting incorporation documents, the applicable government fees must also be paid.

The charge for registering a limited liability company’s name is 1,200 Saudi riyals. A joint stock company costs 1600 Saudi riyals. There is also an incorporation charge of 1200 Saudi riyals for limited liability firms and 800 Saudi riyals for companies with a parent company branch in Egypt.

It is vital to keep in mind that there may be objections to forming a firm, and certain conditions must be fulfilled. This emphasises the need to look into economical legal services and select a criminal attorney in Riyadh to guarantee that the procedure goes successfully.

In conclusion, when forming a company in Riyadh, it is critical to be aware of the associated fees. The registration fees for limited liability and joint stock firms are 1,200 and 1,600 Saudi riyals, respectively. Additionally, incorporation fees must be paid. Companies can carefully handle the procedure of business incorporation in Riyadh by using electronic tools and consulting with legal advice. For more insights into owning a business in Saudi Arabia as a foreigner, visit our article on Can a Foreigner Own a Business in Saudi Arabia?


1. What are the primary costs associated with starting a business in Saudi Arabia?

The key costs include registration fees, licensing, office space, and initial capital investment.

2. What is the corporate tax rate in Saudi Arabia?

As of my last knowledge update in January 2022, the corporate tax rate in Saudi Arabia is 20%. However, tax regulations may change, and it’s advisable to check for the most recent updates.

3. Are there any incentives or tax breaks for foreign investors?

Yes, Saudi Arabia offers various incentives and tax breaks to attract foreign investment, such as exemptions from import duties, subsidized energy costs, and participation in government initiatives.

4. What are the costs associated with hiring local and expatriate employees?

Costs include salaries, benefits, and potential sponsorship fees for expatriate workers. Additionally, there may be fees related to the Saudization program, encouraging the employment of Saudi nationals.

5. How does the cost of living in Saudi Arabia impact business operations?

The cost of living can affect employee compensation and operational expenses. Understanding local living expenses is crucial for setting competitive salaries and managing overall business costs.

6. Are there any industry-specific fees or regulations impacting business costs?

Certain industries may have specific fees or regulations. It’s essential to research industry-specific requirements and compliance standards to accurately estimate associated costs.

7. What is the process for obtaining business licenses and permits?

The process involves submitting required documentation to relevant government authorities. Costs may include application fees, processing fees, and any industry-specific permits.

8. Are there restrictions on foreign ownership of businesses in Saudi Arabia?

While there have been recent changes to promote foreign investment, some restrictions may still apply in certain sectors. It’s crucial to understand the regulations specific to your industry.

9. How does the exchange rate impact business costs for international transactions?

Fluctuations in the exchange rate can affect the cost of imports, exports, and repatriation of profits. Businesses should consider currency risk management strategies.

10. What support does the Saudi government provide to businesses?

The Saudi government offers various support mechanisms, including grants, subsidies, and access to economic cities. Understanding available support can positively impact the overall cost of doing business.

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