TME Legal
Company Formation in Saudi Arabia
TME Legal provides comprehensive advice on company formation in Saudi Arabia: legal forms, licenses, taxes & compliance.
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International business activities require a careful understanding of the applicable local legislation, whether for exports, imports or the establishment of companies. In order to avoid legal risks and costly disputes, it is therefore essential to examine the relevant regulations of the target country at an early stage. This applies in particular to the establishment of branches in Saudi Arabia.
TME Legal offers comprehensive, international legal and tax advice for companies, investors, family offices and private individuals who wish to settle in the MENA region. With over 15 years of local experience, we combine precision with in-depth knowledge of the local legal and economic system. In this way, we ensure that your projects are legally secure, regulatory compliant and strategically optimally implemented.
Strategic Legal Advice for Saudi Arabia
You should not allow cultural and legal challenges to prevent you from establishing a company in Saudi Arabia and opening up new business opportunities. With our intercultural and international legal expertise, we provide competent and strategic support for you in this step.
Our Legal Consulting Fields in Saudi Arabia
We provide comprehensive support for all legal particularities in the Saudi market, including:
- Choice of legal form and company structuring, taking into account tax, regulatory and industry-specific requirements
- Support during the formation process, including commercial register entries, permits and licensing
- Preparation of articles of association and contracts as well as notarial and official implementation
- Support with the establishment of bank accounts in Saudi Arabia
- Labor law advice (individual and collective), including the preparation of employment contracts, terminations, etc.
- Drafting of distribution agreements, supply contracts and agreements in export and foreign trade
- Litigation before state courts and arbitration proceedings
- Legal advice and support for the purchase, sale or rental of private and commercial properties
International Tax Advice for the Saudi Market
The structuring and administration of international asset and company structures requires the highest precision, strategic foresight and absolute discretion. For companies and investors with activities in Saudi Arabia, fragmented advice across different jurisdictions can entail significant risks. These range from conflicting tax information to inefficient structures and tax disadvantages.
TME Legal offers holistic tax advice that combines international legal and tax expertise. We develop customized solutions that optimize your tax interests across borders, minimize risks and sustainably secure the efficiency of your corporate structures.
Our Tax Consulting Services for Saudi Arabia
We support you with all tax issues and special features in the Saudi market. Our tax consulting services include:
- Tax structuring and optimization of company and investment structures
- Registration with the General Authority of Zakat, Tax and Customs (ZATCA)
- Preparation and submission of tax returns (corporate tax, Zakat, sales tax)
- Support and preparation of tax audits
- Ongoing compliance advice and adherence to statutory reporting obligations
- Advice on double taxation agreements and international tax issues
- Tax planning for foreign investors and family offices
- Support for cross-border transactions and corporate restructurings
Legal and Tax Consultants
Our Expert Team
Clear answers
Frequently asked questions about
Saudi Arabia
Which legal forms are available for establishing a company in Saudi Arabia?
In Saudi Arabia, various legal forms are available for establishing a company. The most common include the Limited Liability Company (LLC), the Joint Stock Company (JSC), the branch of a foreign company and various partnership forms. The choice of the appropriate legal form depends on the planned business activities, the shareholder structure and the respective regulatory framework.
How does company formation proceed in Saudi Arabia?
The establishment of a company in Saudi Arabia takes place in several successive steps:
- Company name: Choose a unique company name that complies with Saudi regulations. Availability can be checked on the website of the Ministry of Commerce and Investment (MoCI) and reserved after confirmation.
- Licenses and permits: Depending on the business activity, different permits must be obtained, e.g. from the Ministry of Investment, the Commercial Register or from industry-specific supervisory authorities.
- Articles of Association: Prepare the Articles of Association (AoA), which define the structure, corporate objectives and corporate governance. This document must be notarized and submitted to the competent authorities.
- Registration: Submit all company documents, including AoA and identification documents of the shareholders, to the Investment Authority and the Ministry of Commerce and Investment (MoCI). At the same time, the required fees must be paid in order to obtain the Investment Registration Certificate and the Commercial Registration (CR).
- Bank account: After receiving the CR and the residence permit (Iqama), a company bank account can be opened. The deposit of the share capital is required depending on the company form.
- Taxes and social security: Register your company for tax purposes with the General Authority of Zakat, Tax and Customs (ZATCA). You must also register with the General Organization for Social Insurance (GOSI) to comply with labor laws regarding employee insurance.
- Additional licenses: For certain industries, additional permits or licenses are required from the relevant regulatory authorities, such as the Saudi Food and Drug Authority (SFDA) or the Saudi Arabian Monetary Authority (SAMA).
- Work visas and residence permits: If you want to hire foreign employees, it is necessary to apply for work visas and residence permits (Iqama). This process requires coordination with the Ministry of Labor and Social Development.
What ongoing obligations exist after the company formation?
After the successful establishment of a company in Saudi Arabia, companies are obliged to continuously fulfill various legal obligations. These include the regular submission of tax returns, compliance with labor regulations including the hiring of a Saudi citizen and the performance and submission of annual financial audits.
What is the VAT rate in Saudi Arabia?
The value added tax (VAT) in Saudi Arabia is currently 15% on most goods and services. In addition, there is a special consumption tax. This amounts to 100% on tobacco products and energy drinks and 50% on soft drinks.
How much tax do companies have to pay in Saudi Arabia?
In Saudi Arabia, no income tax is levied on salaries. However, foreign companies are subject to corporate income tax at a rate of 20% on adjusted net profit. In contrast, Saudi companies are required to pay a Zakat of 2.5% on net assets. Some industries are subject to special tax rates. For example, companies in the oil and hydrocarbon industry must pay a tax of 50% to 85%.
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