19 Sep Business Setup in Saudi Arabia: New 2025 Regulations Explained
Saudi Arabia is transforming faster than any other economy in the Middle East. Under Vision 2030, the Kingdom continues to simplify foreign investment laws, diversify its economy beyond oil, and attract entrepreneurs from around the world. In 2025, the business setup landscape in Saudi Arabia is more transparent, investor-friendly, and digital than ever before.
Whether you’re a multinational corporation or an individual entrepreneur, understanding the new 2025 regulations is essential before you begin the incorporation process. This guide explains everything you need to know about establishing a company in Saudi Arabia, including the latest updates from the Ministry of Investment (MISA) and other government authorities.
1. Evolving Investment Environment in 2025
Over the past few years, Saudi Arabia has undertaken sweeping reforms to make company formation easier and faster. In 2025, the process is almost entirely online through MISA’s unified digital platform, enabling investors to apply, upload documents, and receive approvals remotely.
One of the biggest changes is the complete elimination of minimum capital requirements for most commercial activities. Investors can now establish limited liability companies (LLCs) without depositing share capital in advance. In addition, the government has expanded the list of activities eligible for 100% foreign ownership, particularly in retail, wholesale, and services sectors.
Foreign businesses are also benefiting from new tax and customs incentives, especially those investing in key non-oil sectors such as tourism, logistics, manufacturing, healthcare, education, and renewable energy.
2. Legal Entities Available in Saudi Arabia
In 2025, investors can choose from several legal structures depending on business goals and liability considerations:
A Limited Liability Company (LLC) remains the most popular option, offering limited liability for shareholders and flexibility in management.
A Joint Stock Company (JSC) is ideal for large corporations and public offerings.
Foreign companies can open a branch office if they wish to operate directly under their parent entity.
Professional service providers such as consultants or engineering firms can register as professional companies licensed under Saudi professional bodies.
Each structure has different documentation requirements, but all are regulated by MISA and must comply with Saudi Commercial Law 2025.
3. 100% Foreign Ownership and MISA Licensing
Until a few years ago, foreign investors needed a local Saudi partner holding 51% ownership. Today, in 2025, this is no longer mandatory for most business sectors. The Ministry of Investment (MISA) issues licenses allowing 100% foreign ownership, provided the applicant meets certain eligibility criteria such as proof of financial stability and prior industry experience.
The MISA license is the first and most critical step for any foreign company. Once issued, investors can register their entity with the Ministry of Commerce (MoC) and obtain a Commercial Registration (CR) certificate, which legally authorizes operations in the Kingdom.
4. Updated 2025 Business Setup Procedure
The incorporation process has been streamlined into a clear, digital sequence:
Step 1 – Choose Your Activity and Legal Structure: Select your intended activity from the updated MISA list and decide whether to register an LLC, JSC, or branch.
Step 2 – Apply for a MISA License: Submit your application with the company’s Articles of Association, a feasibility study, and proof of identity. Approvals are typically granted within five to seven working days.
Step 3 – Register with the Ministry of Commerce: Once you receive your license, create the company’s CR and notarize the Articles of Association through a Saudi notary public.
Step 4 – Join the Chamber of Commerce: Membership is mandatory and enables you to sign government contracts, open bank accounts, and sponsor visas.
Step 5 – Register for Zakat and Tax: All entities must register with the Zakat, Tax and Customs Authority (ZATCA). The standard corporate tax rate remains 20%, while VAT continues at 15%.
Step 6 – Open a Corporate Bank Account and Obtain Visas: After completing the above, you can open a business bank account and begin visa processing for shareholders and employees through the Qiwa and Muqeem portals.
5. New Compliance Requirements in 2025
To enhance transparency and prevent financial misconduct, Saudi Arabia has introduced new corporate governance and compliance frameworks. Every registered company must:
- Maintain audited financial statements annually.
- Disclose Ultimate Beneficial Owner (UBO) information.
- Comply with anti-money laundering (AML) and know-your-customer (KYC) obligations.
- Ensure that all contracts are bilingual (Arabic and English) for legal validity.
Companies operating in strategic sectors such as healthcare, construction, or logistics must also obtain sector-specific permits from relevant authorities before commencing operations.
6. Labour and Saudization Updates
In 2025, the Ministry of Human Resources and Social Development (MHRSD) continues to emphasize employment of Saudi nationals under the Saudization Program (Nitaqat). New thresholds have been introduced to ensure balanced workforce participation.
For most SMEs, at least 20–30% of the workforce should now be Saudi citizens. However, foreign investors can benefit from flexible quotas if they operate in high-priority sectors or commit to skills-transfer programs.
Visa issuance and renewal are also faster than before, thanks to the integrated Qiwa platform, which automates employment contracts and labour compliance.
7. Corporate Tax and Zakat in 2025
Corporate taxation in Saudi Arabia remains one of the most stable frameworks in the GCC. Resident foreign companies pay 20% corporate tax on profits. Local Saudi-owned entities continue to pay Zakat at 2.5% on net worth.
The introduction of e-invoicing, digital Zakat filing, and online VAT returns has simplified compliance significantly. Companies that meet performance and transparency standards can also apply for tax exemptions in strategic investment zones such as NEOM, The Red Sea Project, and King Abdullah Economic City.
8. Opening a Bank Account and Office in Saudi Arabia
To operate smoothly, every company must maintain a physical registered address. In 2025, commercial lease contracts are verified through the Ejar platform, which links your address with the Ministry of Municipal and Rural Affairs.
Opening a bank account requires the company’s CR, MISA license, UBO declaration, and shareholder IDs. Major banks such as Al Rajhi, SABB, and Riyad Bank offer dedicated corporate packages for foreign investors.
9. Why Saudi Arabia Is the Next Big Investment Destination
Saudi Arabia’s strategic location, robust infrastructure, and fast-growing population make it an ideal base for regional operations. The government is investing heavily in smart cities, tourism, logistics, and technology, creating diverse opportunities for startups and established corporations alike.
With 100% foreign ownership, digital licensing, and world-class infrastructure, the Kingdom has become a magnet for global investors seeking long-term stability and scalability.
10. How GCC Solutions Can Help
Navigating the Saudi business setup process requires local insight, attention to legal detail, and precise documentation. GCC Solutions specializes in guiding entrepreneurs and corporations through every stage, from MISA license acquisition and MoC registration to Zakat filing, office leasing, and visa processing.
Our on-ground experts handle all regulatory submissions, ensuring your company is compliant with the 2025 laws and ready for operations without delays. Whether you’re establishing a new LLC or expanding a global brand, GCC Solutions simplifies the process and delivers complete peace of mind.
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