Establish A Limited Liability Company (LLC) Company in Saudi Arabia
Explore the benefits, setup process, costs, and key requirements of setting up an LLC in Saudi Arabia.
LLC Company Formation in Saudi Arabia
With greater flexibility, operational autonomy, and tax advantages, the LLC (subsidary) structure remains a popular choice for companies looking to set up a business in Saudi Arabia.
Foreign investors can establish a Saudi LLC with full ownership and no requirement for a local partner across most eligible activities, provided they meet MISA’s approval and licensing conditions.
LLC Company Formation in Saudi Arabia: A Step-by-Step Guide
Step 1: Obtain MISA License
Step 2: Draft & Notarize Articles of Association (AoA)
Step 3: Register with the Ministry of Commerce
Step 4: Obtain a Commercial Registration (CR) Certificate
Step 5: Open a Corporate Bank Account
Step 6: Register with the Chamber of Commerce
Step 7: Register with ZATCA
Characteristics of a Foreign LLC in Saudi Arabia
Ownership & Liability
An LLC operates as a separate legal entity, limiting shareholders’ personal liability.
It can be set up as a wholly owned subsidiary of a foreign parent company or as a joint venture (JV) with local partners, offering flexibility across a wide range of business activities.
Operational Scope
Unlike a branch, a subsidiary can operate across a broader range of activities, including trading, manufacturing, and other services, depending on the scope of its license.
Saudization Requirements
Both branches and LLCs must employ at least one Saudi national within their first 12 months of establishment to meet Saudization requirements and become eligible to obtain visas for expatriate employees.
Incorporation Timeline
Establishing a subsidiary in Saudi Arabia typically takes 2–4 months, depending on the time required to prepare the Articles of Association, obtain the necessary approvals, and finalize the registration process.
Bank Requirements
The minimum capital requirement varies by the business license type. For a service license, the minimum paid-up capital is SAR 25,000.
Trading activities may require up to SAR 30 million, while industrial activities typically require SAR 100,000–150,000, depending on the business.
Taxation
A subsidiary must comply with Saudi corporate income tax and Zakat requirements. Key tax obligations include:
- Corporate income tax: 20% on the taxable share attributable to foreign shareholders.
- Zakat: 2.5% of the Zakat base for Saudi and GCC shareholders.
- Withholding tax: 5%–20%, depending on the type of payment and business activity.
- VAT: 15% standard rate on taxable goods and services.
- Tax filing: Annual tax returns must generally be submitted within 120 days of the financial year-end.
- SEZ incentives: Eligible companies operating in designated Special Economic Zones may benefit from a 5% corporate income tax rate for up to 20 years and 0% withholding tax on profit repatriation from the SEZ to foreign countries.
Depending on the business and applicable programs, it may also qualify for certain tax incentives and government support.
Additional Considerations for Foreign Companies
Commercial Name
The subsidiary must operate under a unique commercial name, which has to be approved by the Ministry of Commerce.
Management & Legal Responsibility
An LLC must have a general manager, who acts as the primary signatory for the entity and is legally accountable for ensuring the company complies with Saudi business regulations, including tax and labor laws.
The GM must be a legal resident of Saudi Arabia and hold a valid Iqama.
Shareholder Requirements
A Saudi LLC can be established with at least one shareholder and up to 50 shareholders.
Employee Sponsorship
A Saudi LLC can sponsor employees and facilitate their residency and work permits in the Kingdom.
Annual General Meeting (AGM)
The LLC must hold at least one AGM each year, during which managers present the company’s financial statements and operational reports.
AstroLabs Advantage
| Offering | AstroLabs | Corporate Services Companies offering PRO & GRO | Law Firms | In-House |
|---|---|---|---|---|
| 40+ on-ground local team of experts |  |  | | |
| Government portal management and compliance support | | | | |
| Full management of your company licenses and certificates | | | | |
| Management of registered employees across the employee journey, from hiring to ongoing management | | | | |
| Full suite of support: PRO, GRO, HRs support and access to a pool of Saudi talent | | | | |
| National Address Registration with varied coworking and private office locations | | | | |
| Seamlessly manage GRO services online using a digital platform | | | | |
| Corporate bank account opening | | | | |
| Access to a community of 700+ high-growth businesses in Saudi Arabia | | | | |
| Extended media and exposure support through press releases, social media coverage and articles | | | | |
| Opportunity-matchmaking with potential partners in governmental entities and corporates | | | | |
| Access to global and regional events such as BIBAN, LEAP, Seamless, etc | | | | |