How to set up a company in Saudi Arabia (2026): MISA licence, cost & tax
A foreigner can now own an LLC outright in most Saudi sectors — but this is a real market-entry move, not an offshore shell.
Yes — since the 2025 Investment Law, a foreign investor can own 100% of a Saudi limited liability company in most sectors through a Ministry of Investment (MISA) investment licence. Profits attributable to the foreign owner are taxed at 20% corporate income tax; the Saudi/GCC-owned share pays 2.5% Zakat instead. Budget realistically for setup plus first-year running costs and roughly one to three months to be operational.
Overview
Saudi Arabia is no longer a market you enter through a local sponsor holding your shares. Under the Investment Law that took effect in 2025, foreign investors register through the Ministry of Investment (MISA) and can own 100% of a Saudi company in most sectors, with only a short excluded-activities list still reserved or restricted. The vehicle almost everyone uses is a limited liability company (LLC), licensed by MISA and then given a commercial registration by the Ministry of Commerce.
This guide is deliberately sober. Saudi Arabia is a substantive, on-the-ground market — the point of setting up here is to actually do business in the Kingdom, win contracts, hire, and serve a large domestic economy under Vision 2030. It is not a lightweight offshore jurisdiction, and it should not be used as a paper shell. Expect real compliance: Zakat/tax filings with ZATCA, 15% VAT registration, e-invoicing, a physical presence and a resident general manager. Handled properly it is very workable; treated as a mailbox, it is a poor fit.
Who it's for
This suits operators with a genuine reason to be inside Saudi Arabia — a growing consumer market, government and Vision 2030 spending, and access to GCC supply chains. It rewards businesses that will hire, sign local contracts and build a real presence. It is a poor fit for anyone chasing a cheap, hands-off, low-tax holding structure.
- Companies bidding for Saudi government or Vision 2030 contracts, where local presence is increasingly required
- Multinationals consolidating regional operations — see the Regional Headquarters (RHQ) programme below
- Founders selling into a large domestic market: retail, tech, consulting, construction, healthcare, logistics
- Operators who will genuinely relocate or station a general manager in the Kingdom
- Not for: passive holding companies, pure IP shells, or anyone wanting an offshore structure with no local substance
Types of company
Foreign investors overwhelmingly use the LLC. The alternatives matter mainly for specific situations — a branch to execute a fixed contract, a joint-stock company for larger capital-raising, or the RHQ licence for regional management.
| Structure | Who uses it |
|---|---|
| Limited liability company (LLC) | The default for foreign investors; 100% foreign ownership possible in most sectors via a MISA licence |
| Branch of a foreign company | A foreign parent operating directly, often to deliver a specific project or contract in the Kingdom |
| Joint-stock company (JSC) | Larger ventures, capital-raising or future listing; more governance and higher capital |
| Regional Headquarters (RHQ) | Multinationals centralising regional management in Riyadh — separate licence with major tax incentives |
Corporate tax & key taxes
Saudi Arabia runs a dual system split by shareholder nationality. The share of profit attributable to non-Saudi / non-GCC owners is subject to 20% corporate income tax (CIT). The share attributable to Saudi and GCC owners is instead subject to 2.5% Zakat (a religious wealth levy on the Zakat base, not on profit). In a mixed-ownership company the base is apportioned by ownership percentage, so a fully foreign-owned LLC effectively pays 20% CIT on all its profit, while a 50/50 Saudi-foreign company splits between the two regimes. Both are administered and filed with ZATCA.
| Tax | 2026 rate / treatment |
|---|---|
| Corporate income tax (foreign-owned share) | 20% on the foreign owners' proportionate share of net adjusted profit |
| Zakat (Saudi/GCC-owned share) | 2.5% of the Zakat base on the Saudi/GCC owners' share (a levy on capital/base, not profit) |
| VAT | 15% standard rate; registration and ZATCA e-invoicing (Fatoora) required once thresholds are met |
| Withholding tax — dividends | 5% (can be higher absent treaty relief); reduced or eliminated under an applicable double-tax treaty |
| Withholding tax — royalties | 15% |
| Withholding tax — services | 5% for technical/consulting services; 20% for management fees (treaty rates may reduce these) |
| Oil, gas & hydrocarbons | Special higher rates apply to natural-gas and oil/hydrocarbon producers — outside the scope of a normal LLC |
The Regional Headquarters (RHQ) programme
To draw multinationals into centralising regional management in Riyadh, MISA — with the Ministry of Finance and ZATCA — offers the RHQ programme: a 30-year incentive package with 0% corporate income tax and 0% withholding tax on the RHQ's approved regional-management activities, from the date the RHQ licence is granted. By early 2026 roughly 700 multinationals had set up Saudi RHQs, partly because RHQ status has become a practical condition for winning many Saudi government contracts. The 0% applies only to qualifying RHQ activities that meet substance and eligibility rules — it is not a blanket exemption for a normal operating LLC, so verify current eligibility with MISA before relying on it.
How to set it up, step by step
- Confirm your activity is open to 100% foreign ownership (check the MISA excluded-activities list) and choose your structure — usually an LLC.
- Prepare and legalise parent-company documents (commercial registration, articles, board resolution, financials), attested/apostilled and, where required, authenticated by the Saudi embassy and translated into Arabic.
- Obtain the MISA investment licence / register in the National Investor Register — MISA aims to act on complete applications within about 30 days.
- Reserve the company name and issue the Commercial Registration (CR) with the Ministry of Commerce; draft and notarise the articles of association.
- Register with ZATCA for Zakat/CIT and for VAT, and set up e-invoicing (Fatoora) compliance.
- Register with the Ministry of Human Resources, GOSI (social insurance) and open the Muqeem/Qiwa portals; appoint a resident general manager.
- Open a corporate bank account (expect enhanced due diligence — see below) and deposit capital where the activity requires it.
- Arrange visas/Iqama residency for the general manager and staff, and secure a physical office to satisfy substance requirements.
Costs & timeline
| Item | Detail (verify current figures) |
|---|---|
| MISA licence — application | Around SAR 2,000 application fee |
| MISA licence — annual subscription | Roughly SAR 10,000 the first year, rising toward SAR 60,000 in later years depending on licence type |
| Commercial Registration (CR) | Around SAR 1,200 per year, plus a one-off e-publishing fee (~SAR 500) |
| Professional / setup fees | Legal, translation, attestation and PRO services commonly SAR 15,000–75,000+ all-in |
| Realistic all-in first year | Often SAR 60,000–150,000+ once licence, CR, office, GM visa/Iqama and advisers are included |
| Minimum capital | No fixed statutory minimum for an LLC, but MISA commonly expects ~SAR 500,000 for foreign-owned LLCs; trading/retail activities require far more (SAR 30m+ with investment commitments) |
| Local director / partner | No local shareholder required in most sectors; a resident general manager and a physical office are expected |
| Typical timeline | MISA licence in weeks; fully operational (CR, bank, GM Iqama, VAT) usually 1–3 months, sometimes longer |
Substance, banking & the reality
Saudi Arabia expects real substance: a licensed activity, a physical office, a resident general manager and genuine local operations. This is by design — the Kingdom wants operators, not letterbox companies. Corporate bank-account opening is the step foreign founders consistently underestimate: banks apply thorough KYC/AML checks, often want the general manager physically present with a valid Iqama, and can take several weeks. Build that into your timeline rather than assuming the account follows automatically from the CR.
Common mistakes
- Treating a Saudi LLC as an offshore shell — it is an onshore, 20%-taxed, fully-regulated company
- Assuming 100% ownership means no substance is needed; a resident GM and physical office are still expected
- Underestimating corporate banking — KYC is slow and often needs the GM present with an Iqama
- Confusing Zakat and CIT — the 2.5% Zakat applies to the Saudi/GCC share, not to a foreign owner's profit
- Forgetting VAT registration and ZATCA e-invoicing (Fatoora), which apply from the start of trading
- Picking a restricted activity, or a trading/retail activity with high minimum-capital and investment commitments, without checking first
- Relying on the RHQ 0% rate for a normal operating LLC — it only covers qualifying RHQ regional-management activities
Frequently asked questions
Can a foreigner own 100% of a company in Saudi Arabia?
Yes, in most sectors. Since the 2025 Investment Law, foreign investors register with MISA and can wholly own a Saudi LLC without a local partner, except for a short list of excluded or restricted activities. Trading and a few other sectors carry higher capital and investment conditions, so check your activity first.
What is the corporate tax rate in Saudi Arabia?
The foreign-owned share of a company's profit is taxed at 20% corporate income tax. The Saudi or GCC-owned share is subject to 2.5% Zakat instead of CIT. A fully foreign-owned LLC therefore effectively pays 20% on its profits, with both regimes filed through ZATCA.
How much does it cost to set up a company in Saudi Arabia?
Budget realistically. MISA fees run from about SAR 2,000 application plus SAR 10,000–60,000 annual subscription, and the CR around SAR 1,200 a year. With legal, translation, office and the general manager's visa, a realistic first year is often SAR 60,000–150,000 or more. Verify current fees before you commit.
How long does it take to register a company?
MISA aims to process complete licence applications in around 30 days, and the commercial registration follows quickly after. Getting fully operational — CR, VAT, corporate bank account and the general manager's Iqama — usually takes one to three months, occasionally longer if documents or banking cause delays.
Do I need a local partner or to live in Saudi Arabia?
You do not need a Saudi shareholder in most sectors. You do, however, need real substance: a licensed activity, a physical office and a resident general manager who holds an Iqama. Saudi Arabia expects genuine local operations, so it suits people actually doing business in the Kingdom.
Official & government sources
Rules change — always confirm the current position with the primary authority:
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