Starting a business in
🇸🇦Saudi Arabia
Checked November 4, 2026 · How we score
Corporate tax
20%
Top income tax
0%
Setup from
$8,000
all-in, first year
Time to form
4 weeks
visit usually needed
Taxes in Saudi Arabia
| Corporate income tax | 20% 20% corporate income tax on the foreign-owned share of profits. The Saudi/GCC-owned share is subject to zakat at 2.5% of the zakat base instead. Oil and gas hydrocarbon activities are taxed at 50-85%. Qualifying Regional Headquarters (RHQ) programme participants get a 30-year 0% rate on qualifying activities. |
|---|---|
| Personal income tax (top) | 0% No personal income tax on salaries or business income of individuals. Saudi nationals pay zakat; foreign individuals with Saudi business income are taxed through the business entity or at 20% as non-resident shareholders. |
| Tax system | No personal income tax |
| Capital gains tax | 0%No capital gains tax for resident individuals. Non-resident and corporate gains on Saudi assets are generally taxed at 20% (with exemptions, e.g. certain listed securities). |
| Dividend withholding (non-residents) | 5% |
| VAT / GST | 15% |
| Social security | GOSI contributions apply: roughly 2% employer for expatriates (occupational hazards) versus about 11.75% employer / 10.25% employee for Saudi nationals; Saudization quotas (Nitaqat) apply. |
Forming a company in Saudi Arabia
| Usual entity | LLC (foreign-owned, MISA-licensed) |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $8,000–$20k |
| Annual running cost | $6,000–$18k |
| Time to incorporate | 4 weeks |
| Form remotely as a foreigner | No |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | No |
| Statutory audit for small companies | Yes |
| Business banking for non-residents | Hard |
Residency and visas
Business residency is tied to a licensed company (iqama through Muqeem). Premium Residency (permanent or renewable annual) is available to investors and professionals for a fee; the older one-time fee was SAR 800,000 (about $213,000) and fees and categories have changed, so confirm current pricing with the Premium Residency Centre. There is no digital nomad visa.
| Digital nomad visa | No |
|---|---|
| Golden visa | Yes, from $213k |
| Ease of residency for founders | 4/5 (1 = easiest) |
Special tax regimes
Regional Headquarters (RHQ) Programme
Since 2024 foreign companies must have a regional HQ in Saudi Arabia to win most government contracts; qualifying RHQs get 0% corporate tax and withholding tax on qualifying activities for 30 years, plus Saudization waivers for 10 years.
Premium Residency
Renewable or permanent residence without a Saudi sponsor for investors, entrepreneurs, specialised talent and property owners, on payment of a fee.
Special Economic Zones
Zones such as Riyadh Integrated Logistics, KAEC and Jazan offer a 5% corporate tax rate for up to 20 years on qualifying activities, plus customs benefits.
Pros and cons
Why founders pick Saudi Arabia
- No personal income tax
- Largest economy in the GCC with big government spending
- Generous RHQ and special economic zone incentives
- 100% foreign ownership allowed in most sectors
Watch out for
- 20% tax on foreign-owned profits is high for the Gulf
- MISA licensing, Saudization quotas and in-person steps make setup slow
- 15% VAT and strict ZATCA e-invoicing rules
- Not a good fit for remote solo founders
Best for: Companies selling to Saudi government and large enterprises · Consulting, construction and tech firms wanting local presence · Multinationals setting up a regional headquarters
Saudi Arabia: common questions
Does Saudi Arabia have income tax?
Saudi Arabia does not charge personal income tax on individuals' salaries. Foreign-owned companies pay 20% corporate income tax, while Saudi and GCC-owned shares pay 2.5% zakat, and VAT is 15%.
Can a foreigner own 100% of a company in Saudi Arabia?
Yes, in most sectors a foreign investor can own 100% of an LLC or branch after obtaining a MISA investment licence. Some activities remain restricted or require a Saudi partner.
What is the corporate tax rate in Saudi Arabia?
It is 20% on the foreign-owned share of profits. The Saudi or GCC-owned share is subject to zakat at 2.5% of the zakat base instead of income tax.
How much does it cost to set up a company in Saudi Arabia?
Expect roughly $8,000 to $20,000 in the first year including MISA licence, commercial registration, office lease and visas, and about $6,000 to $18,000 a year after. Costs rise with Saudization requirements and number of employees.
Do foreign companies need a regional HQ in Saudi Arabia?
Since January 2024, Saudi government entities generally contract only with foreign companies that have a regional headquarters in the Kingdom, with some exceptions. Qualifying RHQs receive a 30-year 0% tax incentive.
Sources
- Zakat, Tax and Customs Authority (ZATCA)
- Ministry of Investment of Saudi Arabia (MISA)
- PwC Tax Summaries - Saudi Arabia
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.