Investing in Saudi Arabia’s Future: A Guide to KSA Business Setup


When considering global expansion, the Kingdom of Saudi Arabia (KSA) consistently emerges as an appealing destination for international businesses. This can be attributed to its strong economy, ease of doing business, and welcoming attitude toward foreign investment. However, in order to start a business in Saudi Arabia, you must first understand the regulations and steps involved. This detailed guide will help you understand the KSA Business setup process and make your entry into the Saudi market as smooth as possible.  

Saudi Arabia’s non-oil sector activity rises at the quickest rate in five months

Saudi Arabia’s non-oil sector saw a significant growth boost in February, with business activity rising at the fastest rate for five months. The Riyad Bank Saudi Arabia Purchasing Managers’ Index (PMI) showed a sharp improvement in operating conditions across the non-oil private sector economy, driven by accelerated business activity and strengthened new order growth. The sector recorded a 4.6% increase, with expectations of a modest recovery in demand this year driven by the acceleration of Vision 2030 projects. The growth in output and new business in the non-oil sector bolstered labor demand, with February seeing one of the fastest increases in employment in the past eight years. Despite ongoing inflation, the rate of inflation softened in February, supporting growth in the non-oil sector.

Advantages of business setup in KSA for foreigners

From start-up process to efficient tax system, Saudi Arabia offers many advantages for starting a business in the country:

  • Tax Benefits- foreign investors in Saudi Arabia pay minimal personal income tax, while corporate tax remains at 15%. Although, Saudi Arabia has introduced VAT most goods and services are still exempted and therefore zero-rated.
  • Innovation- Saudi Arabia plans to become a global technology hub by implementing initiatives worth over $1 billion, aiming to increase tech contribution to GDP by AED 50 billion, double the emerging market sector, and create over 25,000 jobs, fostering innovation and entrepreneurship.
  • Broad economy- Saudi Arabia is rapidly diversifying its economy beyond oil and gas, with billions of dollars being provided to businesses in various industries, including tourism, manufacturing, technology, financial services, cosmetics, and pharmaceuticals. This aims to build a strong, future-proof economy.
  • Welcoming Environment- Saudi Arabia is embracing a welcoming environment, welcoming foreign visitors and investments to achieve a cosmopolitan future. The country’s friendly nature and exceptional service make it easy for entrepreneurs to conduct business, ranking 62nd on the World Bank’s Doing Business Index.
  • Safety, security, and quality of life- Saudi Arabia is a secure country with a high quality of life, ranked as the safest of all G20 countries. Its high standard of living, education, and healthcare make it an ideal destination for expatriates, easing the initial culture shock and promoting a comfortable relocation experience.

Steps to start a business in Saudi Arabia for foreigners

Schedule a free consultation with Business Link before applying for a business license to gain a comprehensive understanding of business setup in Saudi Arabia.

Step 1: Choose your industry and business structure

Choose your industry and business structure, and determine whether to establish in mainland Saudi Arabia or a free economic zone. For each legal entity, there is a certain license to consider. 

Step 2: Business Premises

Starting in 2023, Saudi Arabia will no longer issue licenses to foreign companies without a regional headquarters, requiring branch office leasing or local service agents, and allowing new businesses to set up on the mainland or in free economic zones.

Step 3: Investment license

Foreigners seeking to start a business in Saudi Arabia require an investment license issued by SAGIA/MISA. along with a commercial registration certificate from the Ministry of Commerce and Investment.

Step 4: Additional documentation

Next, you’ll need a few more documents from the Ministry of Commerce, Business Link will work with the appropriate bodies to obtain your Memorandum of Association and Commercial Registration. To confirm the establishment of your company, you must appoint a General Director and provide the following documents:

Proof of identity and address for directors and shareholders
Passport copies are for shareholders and directors.
Copy of Trade Name Confirmation
Memorandum of Association (MoA)
Articles of Association (AOA).
Bank reference letter
You will also require a business visa to live, work, and reside in Saudi Arabia.