Saudi Arabia
JordanRegistering a Company for GCC Nationals in the Kingdom of Saudi Arabia
In light of Saudi Arabia’s rapid economic transformation and its continuous efforts to enhance regional economic integration under Vision 2030, promising opportunities have emerged for citizens of Gulf Cooperation Council (GCC) countries to establish businesses and conduct commercial activities within the Kingdom through streamlined procedures and near-equal privileges to Saudi citizens.
As part of Al Madani & Co.’s commitment to providing accurate and up-to-date legal knowledge to Gulf entrepreneurs and investors, we present this comprehensive practical guide for registering GCC companies in Saudi Arabia. The guide outlines the legal framework, regulatory requirements, available legal entities, key challenges, and legal insights to help investors make informed and secure decisions.
1. Legal Framework for Establishing GCC Companies in Saudi Arabia
GCC citizens’ ability to establish companies and conduct business in Saudi Arabia is supported by an integrated system of regional and local laws that enshrine the principle of “national treatment” as a cornerstone of the GCC common market. This principle grants GCC nationals nearly identical rights as Saudi citizens in most economic sectors, with certain sovereign activities remaining restricted to Saudis.
The legal foundation includes:
- GCC resolutions on the common market and investment and movement freedom.
- Saudi Cabinet Resolution No. 50 of 1412H and its updates, affirming that GCC nationals are to be treated as Saudis in commercial ownership and investment.
- The Implementing Regulations of the Foreign Investment Law, which exempt GCC citizens from the requirement to obtain an investment license from the Ministry of Investment.
As a result, a GCC investor can now establish a commercial establishment or company in the Kingdom without a Saudi partner and without a license from the investment authority, provided they comply with legal procedures and do not engage in restricted or excluded activities.
2. Who Can Establish a Company?
According to Saudi regulations, any citizen of a GCC country (UAE, Kuwait, Bahrain, Qatar, Oman) may establish a business entity in Saudi Arabia as a natural person or on behalf of a legal entity (an existing company in their home country), provided they meet the following legal conditions:
- Must be a GCC national, either personally or representing a corporate entity.
- The intended activity must not be among those restricted to Saudi nationals or those of sovereign/security/strategic nature.
- There must be reciprocity between Saudi Arabia and the investor’s home country (generally ensured under GCC agreements).
- Must be at least 18 years old and not legally prohibited from engaging in commercial activities.
- A residence permit in Saudi Arabia is not required. Incorporation procedures may be executed through a Saudi legal representative with a notarized power of attorney if the founder is not present in the Kingdom.
Legal Note: Some activities may require additional licenses or a Saudi partner depending on the regulating authority and activity nature.
3. Legal Forms Available to GCC Investors
GCC investors may choose from the following legal entities, based on their activity type, project size, and future expansion plans:
Legal Form | Description |
Sole Proprietorship | Owned by one natural person; ideal for small to medium-sized businesses in direct trade or services. The owner’s liability is not separated from the business. |
Limited Liability Company (LLC) | The most common form; partners’ liabilities are limited to their shares. Allows up to 50 partners and suits mid-size commercial and professional activities. |
Branch of a GCC Company | A registered GCC company can open a branch in Saudi Arabia with proper documentation from the parent company. |
Joint Stock Company (Closed or Public) | Suitable for large-scale operations or those seeking capital market funding. Requires higher capital and compliance with specialized bodies like the Capital Market Authority. |
Legal Insight: Choosing the right legal form impacts regulatory obligations, management methods, and tax/social insurance compliance. Always consult a legal expert before proceeding.
4. Legal Requirements for GCC Company Registration
To establish a company lawfully, a GCC investor must fulfill the following requirements regarding eligibility, business activity, and registration process:
- Proof of GCC Nationality: Valid national ID or passport.
- Activity Eligibility: Must not fall under the list of restricted or sovereign/security-related activities.
- Reciprocity Principle: Must exist between Saudi Arabia and the GCC state (generally fulfilled).
- Legal Capacity: At least 18 years old and legally eligible.
- Official Incorporation: All steps must be completed via official platforms such as Meras. Residency is not required.
- Capital Requirements: No minimum capital is required for LLCs, but a recommended minimum of SAR 100,000 may apply for banking and regulatory purposes.
- Regulated Activities: Sectors like construction, insurance, finance, and healthcare may require minimum capital or additional approvals.
- Localization Programs: GCC investors are subject to the same Saudization and registration requirements as Saudi investors.
Legal Tip: Verify the activity requirements through the Unified Economic Activities Guide to avoid delays or licensing issues.
5. Steps to Establish a GCC Company in Saudi Arabia
Company formation in Saudi Arabia follows a streamlined, digital-first process:
1.Verify Identity and Nationality
- For Individuals: Submit a copy of a valid GCC ID or passport.
- For GCC Companies: Provide:
- Introductory letter from the embassy or commercial registry.
- Recent commercial registration and company’s Articles of Association.
- Documents certified by the Saudi embassy or commercial attaché.
2.Reserve Trade Name: Through Meras, ensuring uniqueness and no conflict with protected names or restricted sectors.
3.Choose Legal Form and Activity: Select the proper form (sole proprietorship, company, branch) and define the activity as per the Unified Economic Activities Guide.
4.Attest Incorporation Contract: Electronically via:
- Nafith platform, or
- Certified notary, depending on entity type and partner count.
5.Obtain Commercial Registration: Issued by the Ministry of Commerce, enabling legal operation.
6.Open Tax and Zakat File (ZATCA): Opened automatically upon commercial registration. VAT registration is mandatory if revenue exceeds the legal threshold.
7.Register with Social Insurance (GOSI): Mandatory if the company employs workers in Saudi Arabia.
8.Municipal License: Issued via Balady platform, subject to municipality and activity type.
9.Open Corporate Bank Account: Requires:
- Commercial registration
- Articles of Association
- Partner or authorized signatory ID
- Business activity description
6. Required Documents
- GCC ID or passport copy
- Activity proof (for branch registration)
- Incorporation contract (for multi-partner companies)
- National address details
- Capital verification (for specific activities)
- Supervisory authority approvals (for regulated sectors)
7. Activities Prohibited to GCC Nationals
Despite the facilities, certain activities remain restricted to Saudi nationals:
- Hajj and Umrah services
- Legal practice (unless the investor holds an equivalent license and under reciprocity agreements)
- Specific gold and jewelry trades
- Security and military activities
- Private recruitment and labor supply
Restricted Activities: Some require a Saudi partner or special licenses, such as:
- Healthcare (Ministry of Health)
- Finance and investment (Capital Market Authority)
- Media (Audiovisual Authority)
- Security systems (Ministry of Interior)
- Education and training (Ministry of Education)
- Engineering consulting (Saudi Council of Engineers)
- Land transport (Public Transport Authority)
8. Advantages of Company Formation for GCC Nationals
- No need for a Saudi sponsor or investment license
- Full ownership of the company and related property
- Easy financial transfers and e-integration with authorities
- Ability to expand across regions within Saudi Arabia
- Access to the growing business ecosystem under Vision 2030
9. Challenges and Legal Advice
Despite the many facilities, practical and regulatory challenges exist, including:
- Unclear classification or overlapping jurisdiction of certain activities
- Delays in sector-specific licenses (e.g., municipality, CMA, Ministry of Health)
- Issues navigating digital platforms without residency or national ID (necessitating a local legal agent)
- Differences in regulatory interpretations compared to other GCC countries
Conclusion
Establishing a company in Saudi Arabia has become a strategically viable and significantly simplified option for GCC nationals, supported by a robust legal environment, efficient digital services, and preferential treatment aligned with the spirit of GCC integration.
With the continued economic transformation driven by Vision 2030, the Kingdom stands out as a prime investment destination for GCC investors across vital sectors from trade and services to industry, technology, and finance.
At Al Madani & Co., we offer our specialized legal expertise to support you at every step — from selecting the appropriate legal form, registering activities, securing licenses, to building a compliant and sustainable corporate structure.
Contact US
Your Trusted Partner
Info@almadanilaw.com
