The Real Cost of Setting Up a Company in Saudi Arabia: A 2026 Breakdown

"How much does it actually cost to set up in Saudi Arabia?"

It's one of the first questions every founder asks. The honest answer: the government fees alone are modest. The real costs are in compliance, staffing, and the obligations that kick in once you're operational.

This article gives you the complete picture — from first government fee to realistic Year 1 operating cost — sourced from official Saudi regulations, not consultant estimates.

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Category 1: Government Registration Fees

These are the direct fees paid to Saudi government authorities to establish your legal presence.

Fee	Amount	Notes
MISA Investment License	SAR 2,000/year	Annual renewal required
Investor Registry Subscription (Year 1)	SAR 10,000	One-time first-year amount
Investor Registry Subscription (Year 2+)	SAR 60,000/year	Annual — significant ongoing cost
Commercial Register (MOCI)	Varies by activity	Typically SAR 1,200–2,500
Municipal business license	Varies by municipality	Typically SAR 500–2,000
VAT registration with ZATCA	Free	No fee, but requires documentation

The Investor Registry Subscription jump to SAR 60,000/year from Year 2 onward is a meaningful ongoing cost that many founders miss when building their financial model.

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Category 2: Corporate Formation Costs (Professional Fees)

Forming an LLC requires legal work: Articles of Incorporation, board resolutions, power of attorney documents, translations, notarization, and apostille certification for foreign documents.

Item	Estimated cost
Saudi law firm (company formation)	SAR 5,000–20,000
Document notarization (home country)	USD 200–500
Apostille/legalization at Saudi embassy	USD 150–300
Certified Arabic translation of company documents	SAR 500–2,000
Local PRO (Public Relations Officer) services	SAR 500–2,000/month

Note: Using a formation company (e.g., Expandway, Motaded) bundles several of these services and can reduce total formation costs, though it adds a service fee layer.

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Category 3: Minimum Capital

The Companies Law does not specify a statutory minimum capital for LLCs. Partners set the capital in the Articles of Incorporation.

However, in practice:

• MISA and some sector regulators expect capital commensurate with the activity
• Banking relationships may require a minimum deposit (SAR 100,000+ in some cases)
• Some sector-specific licenses (fintech, healthcare, etc.) impose their own minimum capital requirements

For a standard technology or consulting company, founders commonly set initial capital at SAR 100,000–500,000 — not because the law requires it, but because it signals seriousness to regulators and local partners.

Capital must be acknowledged as fully paid in the Articles of Incorporation. Ensure the capital is actually transferred to the Saudi entity's bank account when the account is opened.

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Category 4: Office and Physical Presence

A registered address in Saudi Arabia is required to obtain your Commercial Register. Your options:

Option	Approximate cost
Virtual office / registered address service	SAR 500–2,000/month
Co-working membership (Riyadh/Jeddah)	SAR 1,500–4,000/month
Serviced office	SAR 4,000–15,000/month
Dedicated leased office space	SAR 15,000–80,000/month (varies widely by area)

Most early-stage foreign companies start with a virtual office or co-working space and upgrade as headcount grows.

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Category 5: Staffing Costs

This is where the real budget lives. Saudi Arabia's labor compliance obligations mean that hiring costs significantly more than the face salary.

For a Saudi national employee (example: SAR 15,000/month salary)

Cost item	Monthly amount
Base salary	SAR 15,000
GOSI employer contribution (occupational hazards: 2%)	SAR 300
GOSI employer contribution (annuities: ~9% in year 1)	SAR 1,350
GOSI employer contribution (unemployment: ~0.75%)	SAR 112.50
EOSB accrual (~1/12 of monthly salary per month)	SAR 1,250
Total employer cost per month	~SAR 18,012

A SAR 15,000 base salary costs you approximately SAR 18,000/month in total employer cost — before any benefits, housing allowances, or transportation allowances.

For a non-Saudi employee (example: SAR 20,000/month salary)

Cost item	Monthly amount
Base salary	SAR 20,000
GOSI employer contribution (occupational hazards only: 2%)	SAR 400
EOSB accrual	SAR 1,667
Iqama (work permit) cost — amortized monthly	SAR 200–500
Total employer cost per month	~SAR 22,267

The Iqama (work permit) cost for expat employees is borne by the employer. Exact fees vary by job category and are set by MHRSD, but plan for SAR 2,400–6,000 per expatriate employee per year.

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Category 6: Tax Obligations

VAT

If your revenue exceeds SAR 375,000 annually, you collect and remit VAT at 15%. This is pass-through for most businesses, but non-compliance with FATOORA e-invoicing carries penalties.

Corporate Income Tax (CIT)

For a 100% foreign-owned LLC: 20% of net taxable income. This is a Year 1+ cost — you only pay once profitable.

GOSI contributions

As modeled above — a significant cost from day one of hiring.

Withholding Tax (WHT) on payments to non-residents

If your Saudi entity makes payments to non-resident entities (including your parent company), WHT may apply. Management fees, royalties, and technical services are common triggers.

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The Numbers That Actually Surprise Founders

Most founders budget for government fees and salary. These are the items that aren't in those estimates:

1. SAR 60,000/year Investor Registry Subscription from Year 2 This is a real and recurring annual cost. Not a one-time fee.

2. EOSB liability accumulates every month For a 10-person team, you accrue roughly SAR 10,000–20,000/month in EOSB liability. It's not paid monthly, but it's owed when employment ends.

3. Nitaqat compliance costs If your sector requires 20% Saudi nationals and you have 10 employees, you need 2 Saudi employees. Saudi nationals typically command a premium. This is a structural labor cost.

4. GOSI at full rate (Year 4+) Once the GOSI annuities phase-in reaches 11% employer contribution, your Saudi employee GOSI cost increases meaningfully.

5. VAT cash flow impact You collect VAT from clients and pay it to suppliers. The net is manageable — but you need working capital to bridge the gap between collecting and remitting.

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Year 1 Cost Model: Illustrative Scenario

Scenario: Foreign tech company, 100% foreign-owned LLC, 5 employees (2 Saudi, 3 non-Saudi), Riyadh, technology sector

Item	Year 1 cost (SAR)
Government registration fees	15,000
Company formation (legal/professional)	15,000
Virtual office / co-working	30,000
Saudi employees (2 × SAR 12,000 base × 12 months + GOSI)	310,000
Non-Saudi employees (3 × SAR 18,000 base × 12 months + GOSI + Iqama)	675,000
EOSB accrual (5 employees)	50,000
Accounting/audit (first year)	20,000
Total Year 1 operating cost (ex-CIT, ex-capital)	~SAR 1,115,000

This is a simplified model. Your actual costs depend on your sector, headcount mix, salary levels, and office requirements. But the order of magnitude is right: a lean 5-person team in Saudi Arabia costs approximately SAR 1-1.5 million in Year 1 before revenue.

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What's Not in This Model

• FATOORA compliance setup (e-invoicing system integration): SAR 5,000–30,000 depending on complexity
• Sector-specific licenses (SAMA, SFDA, GAMR, etc.): Highly variable
• Banking costs: Opening a Saudi corporate bank account takes 4–12 weeks. Minimum deposit requirements vary by bank (typically SAR 50,000–200,000)
• Customs duties: Relevant for import/export businesses
• Real Estate Transaction Tax: 5% of property value if you buy commercial space

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Get a Personalized Cost Estimate

The numbers above are illustrative. Your actual Year 1 costs depend on your sector, activity, headcount mix, and company structure.

Daleel generates a structured Year 1 cost estimate — government fees, GOSI obligations, Nitaqat requirements, and tax obligations — based on your specific inputs. Free tier. 10 minutes.

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Sources: MISA Investor Guide (July 2025); MISA Investment Law Implementing Regulations (2025); GOSI Social Insurance Law (Royal Decree M/273, 2024); Saudi Labor Law; ZATCA official mandate.