Establishing an LLC Company in Saudi Arabia
A Limited Liability Company (LLC) is the most popular structure for foreign companies setting up a business in Saudi Arabia. Although owned by a foreign parent company, a subsidiary operates as an independent legal entity and maintains its own financial records and obligations.
LLC Company Formation in Saudi Arabia
This structure in particular offers a great deal of flexibility, operational autonomy, and tax advantages, making it the most sought-after business structure for companies intending to set up a business in Saudi Arabia.
Characteristics of a Foreign LLC in Saudi Arabia
Shareholding and Capital
An LLC requires at least one Saudi or GCC shareholder unless it qualifies for 100% foreign ownership.
Scope of Activities
A foreign LLC is allowed to have multiple commercial registrations (CRs) and engage in a wide range of licensed commercial, industrial, or service activities.
Tax Compliance & Incentives
Foreign subsidiaries file taxes independently with the Zakat, Tax and Customs Authority (ZATCA) and may benefit from tax breaks or other government incentives.
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
Additional Considerations for Foreign Companies
Trade Name
The subsidiary must operate under a unique commercial name and have distinct bylaws separate from the parent company.
Incorporation Timeline
Typically takes 2 to 4 months.
Local Director
Appointing a local director is optional but recommended to facilitate interactions with governmental agencies and handle compliance matters; however, an LLC must have a general manager, who acts as the primary signatory for the entity.
Hiring and Saudization Requirements
A foreign LLC must hire at least one Saudi employee within the first 12 months of expansion.
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