Company formation in Saudi Arabia step by step: entity, articles, fees

Company formation in Saudi Arabia is done online. You pick one of the five forms in the Companies Law, usually a limited liability company, complete the articles of association on the business platform, have every partner approve them electronically, and pay the Ministry of Commerce fees: SAR 1,200 for an LLC's registration plus SAR 500 publication, with VAT [1][2].

This guide follows the Ministry of Commerce service pages and the Companies Law as we read them on 14 October 2026. The business.sa address now opens the site of the Saudi Center for Competitiveness and Business, which runs the business platform where the applications are filed [3]. It is general information, not legal advice: for a specific case, check the Ministry's service page or ask a licensed lawyer.

Types of companies in Saudi Arabia under the Companies Law

Article 4 of the Companies Law lists five forms: the general partnership, the limited partnership, the joint stock company, the simplified joint stock company and the limited liability company [1]. Professional companies, non-profit companies and holding companies are not extra forms; each one takes one of these five, as Articles 185, 198 and 216 state [1].

Article references are to the Companies Law [1]. Each registration fee is listed with SAR 500 for publishing the founding document and 15% VAT.

Which form suits a small or medium business?

• LLC: the usual choice for a trading, services or software business. One person can own it alone, and the company alone answers for its debts, with each partner's exposure capped at their share in the capital [1][2].
• Simplified joint stock company: worth a look if you plan to bring in investors or give shares to staff. Its capital is divided into tradable shares, and the shareholders design the company's structure in the by-laws [1][4].
• Joint stock company: for large projects that can commit SAR 500,000 of issued capital from the start [1].
• Partnerships: rare for new ventures, because the general partners answer for the company's debts from all their own assets [1].

Before you apply: name, activities, partners and capital

Four decisions shape the application. Settle them before you open the service.

The trade name. You can reserve a name for up to 60 days while the company is set up. The Ministry charges SAR 200 for an Arabic name and SAR 500 for an English name, and you can propose up to five names in one request [8]. The name must not resemble a name already reserved or registered, a well-known trademark, or a government body, and it must not carry a political, military or religious meaning [8]. Article 5 adds that the name must show the company's form [1].

The activities. A company may start its activities only after it is entered in the commercial register and has obtained any licence the activity needs (Article 10) [1]. If an activity needs a licence or initial approval from the Saudi Central Bank, it must exist before you apply [2].

The partners. Each partner must be at least 18 (a guardianship deed is needed for a minor) and must not be a government employee [2]. A partner that is a company needs an active register entry, and a foreign partner needs investment registration first, covered further down.

The capital. Shares may be cash or in kind (Article 13). If in-kind shares exceed half the capital, an accredited valuer must report their fair value, a rule Article 159 applies to LLCs through Article 141 [1].

Company formation in Saudi Arabia step by step

The Ministry's pages describe the same path for LLCs and simplified joint stock companies, with forms that adapt to each [2][4]:

1. Log in to the business platform with the National Single Sign-On (Nafath) or an investor account.
2. Choose the service: E-services, then Start a business, then Establish a company, and pick the form.
3. Set the basics: registration type, the company's term and head office, then accept the terms.
4. Enter the activities and objects, with licence details where needed, and tick e-commerce if you will sell online.
5. Add the partners and verify their mobile numbers and email addresses.
6. Choose the trade name and financial year, and enter contact details and the address.
7. Set the capital: its type, amount and split between partners, including any in-kind assets, and how profits and losses are shared.
8. Set the management: the structure, the managers and their powers.
9. Complete the contract terms: partner resolutions, how notices reach partners, and any article you add or edit.
10. Review and submit: the platform generates a draft contract for you to check before sending.
11. Partner approval: each partner approves through a link sent to them with a verification code [4]. When a partner is foreign, authentication goes through a Saudi Center for Competitiveness and Business employee [3].
12. Pay and print: pay by card or SADAD, then print the registration details.

For an LLC, the Ministry lists the service time as immediate [2]. The same transaction records the commercial registration and articles, publishes the articles in the Aamali gazette, and opens files with the Ministry of Human Resources and Social Development, ZATCA, GOSI, Saudi Post's business address service and the local chamber of commerce [2]. The Center's FAQ adds that the unified national number for the establishment, known as the 700 number, is issued with the registration [3].

Articles of association: what the Companies Law requires

Every company has articles of association, except joint stock companies, simplified joint stock companies and single-owner LLCs, which have by-laws instead (Article 7). The document must be in Arabic, may carry a translation, and the Ministry publishes model templates [1].

Article 8 adds two rules. The articles and every amendment must be in writing, or they are void. And they cannot be relied on against third parties until they are entered in the commercial register [1].

For an LLC, Article 158 lists what the articles must contain [1]:

• the partners' names and details, and the company's name, head office and objects;
• the capital, how it is split between partners, and the partners' declaration that their shares are paid;
• the company's term, if any, and how it is managed;
• how shares are transferred, how notices reach partners, and how partners take decisions;
• how profits and losses are shared, the financial year, and how the company ends.

The template covers these headings. The clauses worth writing yourself are the ones that matter when partners disagree: majorities for big decisions, what happens if a partner wants to leave, and pre-emption on share transfers. Article 11 also allows a separate partners' agreement or a family charter, which binds the partners as long as it does not contradict the law or the articles [1].

On signing, the Center's FAQ says articles and partner resolutions are authenticated through Absher when the business requirements are met; otherwise, at a Ministry-accredited agent, a notary or a Center branch [3].

Fees for setting up a limited liability company in Saudi Arabia

The table gathers the Ministry's fees as listed on its service pages on 14 October 2026.

The formation pages list 15% VAT alongside these amounts. The chamber of commerce subscription is separate. The Federation of Saudi Chambers sets it by class, from SAR 200 a year for a company with capital under SAR 375,000, under five years old and with no more than five employees, up to SAR 5,000 for the first class, which covers the largest firms [3].

Illustrative example: two partners in Dammam

Illustrative example. Two Saudi partners form an LLC with SAR 100,000 capital in cash, three employees and an Arabic trade name.

Treat the total as a floor. Municipal licences, activity licences, office rent and bank charges come on top and depend on the activity and city.

Do you need a company stamp?

The Companies Law does not mention a company stamp. What it requires is information: contracts, receipts and other documents the company issues must show its name, form, head office address, email if any and commercial registration number, and, for capital companies, the capital and the amount paid (Article 12) [1].

The Center's FAQ makes the same point from the other side. When a bank asks for the Ministry's stamp on the articles, the answer is that the bank can verify the registration and the articles electronically, and the Ministry's stamp is not required [3]. Many firms still order a stamp because some counterparties ask for one. That is a business choice, not a formation step.

After the commercial registration: a first-month checklist

The company becomes a legal person once it is entered in the commercial register (Article 9), and contracts the founders made for it pass to the company [1]. Then:

• Record the beneficial owner: the Ministry's service identifies the natural person with actual and final control of the company. It is free, and at least one beneficial owner must be registered unless an exemption applies [10].
• Open the bank account in the company's name and pay in the capital the partners declared in the articles.
• Get the activity licences, including a municipal licence if you have premises.
• Put Article 12 details on invoices, quotes and contracts [1].
• Move contracts and subscriptions into the company's name, including software. Our guide to choosing a software or app development company lists ten questions to send any vendor before you sign.
• Diarise the annual confirmation. The Commercial Register Law requires an annual confirmation of the registered data (Article 11) and an update within 15 days of any change (Article 10) [11]. If the confirmation is 90 days late, the registration is suspended, and with it every licence issued under it (Article 15) [11]. Violations carry a fine of up to SAR 50,000 (Article 21) [11].

Foreign partners: investment registration comes first

Under Article 7 of the Investment Law, a foreign investor must register with the Ministry of Investment before making any investment [12]. The Ministry's investment services manual, 13th edition of March 2026, gives an estimated processing time of 10 working days. The fee is set when the application is approved and must be paid within 15 business days, or the registration lapses [13].

The documents include the foreign partner's commercial registration certified by the Saudi embassy and its latest financial statements, also authenticated by the embassy. Holders of a Saudi special residency permit are exempt from these document requirements, and the Saudi share and the capital must meet any minimum set for the activity [13]. Only then does the company application open at the Ministry of Commerce. The investment registration must be valid for at least 30 days, the service takes up to 72 hours, and the fees match the table above [14].

Common mistakes that slow down company formation

• A name that resembles a registered one. Propose several names in the same request [8].
• A partner who is a government employee. The application fails the Ministry's conditions [2].
• An in-kind share worth more than half the capital without a valuer's report [1].
• Copying the template without exit or deadlock clauses, then amending the articles a year later.
• Starting a licensed activity before the licence is issued (Article 10) [1].
• Missing the annual confirmation, which leads to suspension after 90 days [11].

Your next step

Write down four things on one page: the form, the trade name with two alternatives, the activities, and each partner's share and role. That page settles the main decisions company formation in Saudi Arabia asks for at the start, and it turns the platform form into a short task. If the new company will need its own system for orders, bookings or clients, our guide to custom software development in Saudi Arabia explains when to buy, connect or build. You can read more about O AI, a software and AI company in Al Khobar, on our home page. Our websites and online stores page describes the bilingual sites and stores we build.