How to Start a Business in Saudi Arabia Step-by-Step

Saudi Arabia become one of the most attractive destinations for foreign investments not just in the Middle East but in the world, driven by the country’s 2030 vision that supports the non-oil economic transition which made the country make tempting progressive policies and new legislation in favor of foreign investors.

You probably see a lot of results for How to start a Business in Saudi Arabia but lucky you that you’ve landed in our full detailed checklist that would be your guide for founding and expanding your business in KSA and won’t need to search anywhere else for this topic, because Sadany & Partners is not just your typical legal advisor, We’re specialized law firm in business formation as starting a Business in KSA is our main expertise that we have been doing for years, so what is coming in this blog is all what you have to do get started.

8 Steps on How to Start a Business in Saudi Arabia?

To start your business in Saudi Arabia, you need 8 steps and a good partner!

Here’re the 8 steps in detail..

1 - Complete Your Market Research & Business Planning:

The most important steps in starting a business in Saudi Arabia and before starting any business are researching, analyzing the market, and planning your business for launch.

You need to check if there is a need or demand for your product or the service you are going to offer, are you going to fill a gap in the market, or your product or service is an innovative one that would solve a huge problem for the audience, what is your value proposition if you are going to provide the same excited product or service available in the market, what is your marketing strategy, how would you finance your project, 4Ps, competitor analysis, identify your suppliers, which positions would you hire for in the beginning and what is exit strategy.

2 - Identify Your Business Type:

You are now for sure know what business you are going to enrol in, then the second step on how to set up a business in Saudi Arabia is knowing and identifying what type of legal structure would you establish your company with, and this depends on several factors like the kind of partnership you would to deal with, or you are on your own, do you have investors putting their money with you, or it’s self-funded start-up, the size of the company really matters, would start with a small or mid-size company, franchise or a corporate that looking to expand whether it’s a private one or public one or just a regional headquarters you are a planning to move it.

Each business type differ for it’s key features and description, read more about company formation types in Saudi Arabia.

Read More about:

• How to setup a Limited Liability Company (LLC) in Saudi Arabia
• How to Start a Joint Stock Company (JSC) in Saudi Arabia
• Setup a Regional Headquarters

3 - Issue The Business Licence:

After we’ve set your company's legal structure and conducted your market research to found that there is a chance to grab and saw a lot of potential to be taken by your business plan, the third step in how to start a business in Saudi Arabia is to get your business licence to set our foot on the new land of opportunities.

You have to note that every business line has its own business licence and every one has its own registration fees, timeframe and documents to prepare in order to obtain.

Get to know all the kinds of business licences available in Saudi Arabia, which one is suitable to your business, benefits, renewal and cancellation from by exploring our blog: obtaining the appropriate business license.

4 - Rent a Commercial Space:

Renting a commercial space is an important step on how to set up a business in Saudi Arabia as a Lease agreement for the commercial space would be one of the necessary documents you need to get ready with the necessary documents we are about to identify in the following steps, so keep reading!

5 - Obtain a Municipal Approval:

A municipal license or approval is required to operate a business in a specific location in Saudi Arabia. To obtain a municipal license, you'll need to:

• Submit an application: Submit an application to the local municipality.
• Provide Lease agreement for the commercial space: a copy of the lease agreement, and other relevant documents.
• Pay fees: Pay the required fees for the municipal licence.
• Obtain the licence: Once all requirements are met, the municipality will issue the municipal licence.

6 - Prepare Necessary Documents:

To start a business in Saudi Arabia you need to have necessary documents and to equip the following other documents for completing a successful registration process, such as:

• Passport copies of shareholders and managers
• Visa copies
• Feasibility Study
• Power of Attorney
• No Objection Certificate (NOC) from the sponsor (if applicable)

Once you get these documents done, you can submit your application to the relevant government authority.

So the Ministry of Commerce and Industry (MCI) or Ministry of Investment of Saudi Arabia (MISA) will review your application, they will provide their approval and get you the commercial register.

Need to complete your documents hassle-free? Contact us now!

7 - Get The Tax Number:

After identifying your company type and issuing your industry-specific license, you'll need to obtain a tax registration number from the General Authority of Zakat and Tax (GAZT) for complying with tax obligations and filing tax returns.

Need your Tax Number in Saudi Arabia as a foreigner?

Get in Touch with our Tax lawyers to complete your paper!

8 - Start operations:

Congratulations!, you've done all the work above on how to set up a business in Saudi Arabia, and now you can start producing your first prototype or delivering the first service required.

How Much Does It Cost To Set Up A Business In Saudi Arabia?

A new business means more profit.

This is the goal! but before forecasting your profitability you must have asked, how much is this going to cost me to setup the business in Saudi Arabia?

No one can give you an exact number for setting up your company.

Because business license and documents charge fees vary from one field to another, add to that the usual cost of market research and planning, the salary limit you are willing to pay and the cost of production or operation depending on your business models.

If you are keen on identifying the initial investment you should prepare to start a business in KSA, you may contact us for a noncommitment-free consultation to help you get the right estimation.

Most profitable business in Saudi Arabia?

Speaking of profit, did you ever wonder about the most profitable business field in Saudi Arabia?

Real Estate Developing, Construction, and wholesale building materials.
 

Real Estate is the most booming business sector in Saudi Arabia as the volume of real estate financing has increased since 2018 to reach 800 billion riyals, with expectations of reaching 1.3 trillion riyals by 2030, while the value of real estate deals executed since the beginning of 2024 until now has reached 630 billion riyals.

The Kingdom’s real estate projects are expected to make it the world’s largest construction market by 2028, with projects across all sectors valued at $181.5 billion. Under Vision 2030, more than 660,000 residential units, 320,000 hotel rooms, 5.3 million square meters of retail space, and 6.1 million square meters of new office space are expected to be delivered by the end of the decade.

Check out our real estate services and construction services if you want to get started in this field in Saudi Arabia.

Conclusion:

This concludes our guide on establishing a business in Saudi Arabia. We trust that the step-by-step guidance provided has clarified the necessary procedures, processes, and resources required for commencing operations within the Kingdom.

For more information, you can contact Sadany&Partners Law Firm to start your business immediately.