One of the main reasons to open a business in Saudi Arabia as a foreigner is the relatively low taxes to pay. However, apart from these, you must also consider the annual maintenance costs, such as utilities and administration fees. This is why, after reviewing the Saudi company formation procedures in several articles, we invite you to discover in the lines below what it entails to run a business here.
| Quick Facts | |
|---|---|
| Fastest way to start a business in Saudi Arabia as a foreigner | Limited liability company registration |
Time frame to register a business in Saudi Arabia | Around 2 months |
Composition of the business registration costs | – documents preparation and notarization, – registration fee, – consultancy fee (PRO services).
|
| Maintenance costs | – office maintenance, – employment costs, – accounting fees, – licensing fees |
| Special costs/fees to consider (if any) | License renewal costs |
| Bureaucracy | Moderate bureaucracy levels |
| Availability of online business administration services (YES/NO) | Yes, most operations can be completed online. |
| Corporate tax rate | 20% on the net adjusted profits |
| Particularities of the workforce | – large number of foreign workers, – most employees have tertiary studies, – young workforce |
| Social contributions to pay as an employer | 12% of an employee’s gross salary + housing allowance when required |
| Best performing industries | – construction, – IT, – tourism, – renewable energy, – agriculture |
| Possibility to register a business remotely in Saudi Arabia(YES/NO) | Yes |
| Personal income tax | There is no personal income tax in Saudi Arabia. |
| Restrictions on foreign investments (if any) | Foreign investors are subject to specific licensing requirements and monitoring from the authorities. |
| Why set up a business in Saudi Arabia as a foreigner? | – economic stability, – relaxed foreign investment regulations, – possibility to operate in various industries |
Table of Contents
Regular administration costs for a Saudi business
When you set up a business in Saudi Arabia as a foreigner, the first costs you will consider are the consulting and legal ones. However, after the incorporation procedure is completed, you need to take into account the following ones:
- the office space, which is one of the highest business maintenance costs, depending on the option you choose – the virtual office is the cheapest with an average price of SAR 700 per month (approximately USD 190);
- utilities costs which depend on the type of activity your business undertakes;
- accounting costs which depend on whether you set up an internal department or externalize this service (our accountants in Saudi Arabia can make you a personalized offer which is often more advantageous than hiring such a specialists);
- business license renewal fees, which is often the case of the MISA permit fee for a foreign-owned enterprise etc.
Our company registration agents in Saudi Arabia can offer updated information on specific license fees you need to consider.
Here is also an infographic on this subject:
Key aspects of the Saudi business environment
As a foreign investor you will need to adapt to various cultural values if you start a business in Saudi Arabia, however, you will also have the possibility to tap into numerous opportunities. Here are some of the most important things to consider about the Saudi business environment:
- It relies on strict, but clear regulations, which will make it easy for you to navigate them;
- bureaucracy levels are starting to lower, even at regional level, coordination issues may still appear, however, most interactions with the authorities are completed online;
- the work week in Saudi Arabia starts on Sunday and ends on Thursday, an important aspect to consider when setting up business meetings, for example;
- the main administrative bodies you will have to deal with, when it comes to doing business in Saudi Arabia, are the Ministry of Investment, Ministry of Industry and Commerce, Ministry of Human Resources and Social Development, and the Ministry of Municipalities and Housing.
Also, in some cases, you will need representation from a local service provider, such as our Saudi company formation and lawyers.
We also have a video below:
Labor market characteristics
No matter the sector you open a business in Saudi Arabia, you will need to hire workers. From this point of view, you can take into account the following:
- the total number of workers in Saudi Arabia was 17.2 million at the end of 2024;
- 13.2 million (77% of the total number of employees) were foreigners;
- 66% of all employees worked in the private sector, 7% in the government, and 3% in the public sector;
- 39% of the domestic workers and 28% of the foreign ones had tertiary, respectively, secondary studies;
- by age, Saudi Arabia has a young workforce, with the age group 25 to 29 being predominant in the first quarter of 2025.
An interesting aspect is that Saudi Arabia is among the few countries in the world with an annual population increase of 1.6% in the past few years. Also, about 1/3rd of the population was born abroad.
If you want to open a business in Saudi Arabia as a foreigner and need support, our local specialists are at your disposal with various services, so feel free to contact us.