How to Register a Business in Saudi Arabia: A Step-by-Step Guide

Written By Akshaya Ashok, Reviewed By Retheesh R S

Published on 07/12/2024

Starting a business in Saudi Arabia always provides great growth opportunities, due to its strong economy, good location, and support for entrepreneurs. Whether you are a local or international investor, establishing a business in the Kingdom can seem complex, but with the right guidance, it is streamlined. In this step-by-step guide, we will walk you through everything you need to know to set up your business in Saudi Arabia, from legal requirements to registration procedures, helping you navigate the process easily and confidently.

Step 1: Choose a Legal Structure

A successful business setup is always based on the legal structure it chooses, and in Saudi Arabia, the available choices are:

• Limited Liability Company (LLC): The most popular choice among foreign investors, offering limited liability protection to shareholders.
• Sole Proprietorship: A simple and cost-effective option for small businesses managed and owned by a single individual.
• Partnership: For businesses owned by two or more individuals who share profits and liabilities.
• Joint Stock Company (JSC): Best suited for large-scale businesses with public shareholding.

Each structure has its own legal and financial requirements, so choose the one that aligns with your business goals.

Step 2: Obtain Necessary Approvals

Depending on your business activity, you may need approvals from specific government agencies before proceeding with registration. Examples include:

• Ministry of Commerce: For general business activities.
• Ministry of Industry and Mineral Resources: For industrial and manufacturing businesses.
• Saudi Central Bank (SAMA): For financial services and banking-related businesses.
• Ministry of Health: For healthcare, pharmaceutical, and medical activities.

Ensure you research and secure the required approvals to avoid delays.

Step 3: Choose a Business Name

One of the most important steps is choosing a suitable business name. The name must comply with Saudi regulations, which means it should be:

• Unique and not identical to existing businesses.
• Free from offensive or misleading terms.
• Reflective of your business’s purpose.

You can check name availability and reserve it online through the Ministry of Commerce’s platform.

Step 4: Secure a Commercial Register (CR)

Registering your business with the Commercial Registry at the Ministry of Commerce is mandatory. Prepare the following documents for submission:

• Passport copies of shareholders and managers.
• Memorandum of Association (MOA) and Articles of Association (AOA).
• A no-objection certificate (NOC) from your sponsor (if applicable).
• Power of attorney for legal representatives.

Once approved, you will receive a Commercial Registration (CR), which serves as proof of your business's legal status.

Step 5: Obtain a Commercial License

With your CR in hand, apply for a commercial license from the relevant regulatory authority overseeing your business activity. This will validate your business operations and ensure compliance with Saudi laws.

Step 6: Register for VAT

If your business’s annual turnover exceeds the VAT threshold (currently SAR 375,000), you must register for Value-Added Tax (VAT) with the General Authority of Zakat and Tax (GAZT). This involves:

• Completing a VAT registration form.
• Providing your CR and business license.
• Maintaining proper accounting records to meet VAT compliance requirements.

Step 7: Obtain Necessary Permits and Licenses

Based on your industry and business type, you may need additional permits and licenses, such as:

• Municipal License: Required for physical business premises.
• Health License: For businesses in the food, health, or hospitality sectors.
• Labor Office Registration: For hiring employees locally.
• Import/Export Licenses: For businesses involved in international trade.

Consult relevant authorities to ensure all required permits are secured.

Step 8: Establish a Corporate Bank Account

A corporate bank account in Saudi Arabia is essential for managing business transactions. Select a trusted bank and submit the required documentation, such as:

• Your Commercial Registration (CR).
• A copy of your business license.
• Authorized signatories’ identification documents. 

This step ensures efficient and seamless financial management for your business in the Kingdom.

Conclusion

Registering a business in Saudi Arabia is a rewarding journey that opens doors to immense opportunities in one of the region’s most dynamic economies. By following these steps and adhering to local regulations, you can establish a strong foundation for your venture.

For a smooth and stress-free experience, partner with Reyson Badger, a name in business consultancy. With expert guidance and comprehensive support, Reyson Badger ensures that your business setup process is smooth, compliant, and efficient while allowing you to focus on achieving your entrepreneurial goals in Saudi Arabia.

Written By

Akshaya Ashok

Akshaya Ashok is a content writer specializing in creating content focused on accounting and auditing. With over two years of experience, she has developed expertise in crafting professional content for the financial sector.