Understanding business setup costs in Saudi Arabia: A roadmap for entrepreneurs and investors in 2025

Understanding business setup costs in Saudi Arabia: A roadmap for entrepreneurs and investors in 2025 

Setting up a business in Saudi Arabia offers incredible opportunities, but understanding the financial investment involved is key to long-term success. With Vision 2030 driving business-friendly reforms and a surge in foreign investment, the Kingdom has become a top destination for entrepreneurs and global firms. However, navigating the cost of starting a business in Saudi Arabia requires proper planning and insight. 

Whether you’re a business owner exploring market entry into Saudi Arabia, an employer managing costs, or a stakeholder evaluating the investment landscape, this guide outlines everything you need to know about business setup costs in KSA in 2025. 

Why Saudi Arabia is a Prime Business Destination 

Saudi Arabia’s ambitious Vision 2030 initiative is reshaping its economy and unlocking new business opportunities across key sectors. 

• Growing investment: In the first nine months of 2024, the Kingdom attracted approximately SAR 54.4 billion (USD 14.5 billion) in foreign direct investment (FDI). 

• Economic diversification: Vision 2030 is actively reducing reliance on oil by boosting sectors like technology, tourism, manufacturing, and renewables. 

• Business-friendly reforms: With simplified licensing procedures, investor incentives, and enhanced digital infrastructure, company formation in Saudi Arabia is easier and more efficient than ever before. 

Located at the crossroads of Asia, Europe, and Africa, Saudi Arabia offers unparalleled access to global markets, making it an ideal destination for regional headquarters and new ventures alike. 

Breakdown of Year 1 Business Setup Costs in Saudi Arabia 

Setting up a business in the Kingdom involves specific upfront expenses. Below is an overview of key Saudi company formation costs you can expect in your first year: 

• Full business setup: SAR 75,000 – Covers legal, administrative, and compliance processes. 

• Business license and registration: SAR 3,000 – SAR 8,000 – Depends on business type and sector. 

• License renewal: SAR 62,000 annually. 

• Portal renewals: SAR 3,000 – SAR 12,000 – Based on headcount and administrative requirements. 

• Office space: SAR 20,000 – SAR 200,000 – Varies by size, location, and business model. 

• Visa issuance costs: SAR 12,000 per foreign employee. 

• Employee salaries: Starting from SAR 60,000 per annum, depending on industry and role. 

These initial setup costs form the financial foundation of your business in Saudi Arabia and should be incorporated into early-stage planning. 

Ongoing Compliance and Operational Costs 

Beyond the initial setup, companies must budget for recurring business costs in Saudi Arabia to ensure long-term sustainability: 

• Municipal and industry-specific licenses – Costs vary by sector and jurisdiction. 

• Taxes: 15% VAT and 20% corporate income tax for foreign-owned companies. 

• Third-party services: SAR 25,000 annually for accounting, payroll, and admin outsourcing. 

• Utilities and office maintenance: SAR 10,000 – SAR 50,000 per year. 

• Healthcare and insurance: Mandatory health insurance starting from SAR 5,000 per employee. 

Planning for these ongoing operational costs ensures both financial stability and regulatory compliance in the Saudi market. You can learn more by watching our latest webinar recording Budgeting for Your New Business Setup in Saudi Arabia, Understanding All the Costs Involve 

Additional Business Expenses to Consider 

In addition to core setup and running costs, businesses should also prepare for several additional expenses that can influence budgets over time: 

• Consultancy fees: Legal and business advisors may charge SAR 5,000 – SAR 20,000 based on complexity. 

• Recruitment costs: Fees for job ads, agencies, and onboarding processes can add up quickly. 

• Technology and software: CRM, ERP, accounting systems, and cybersecurity tools typically cost SAR 10,000 – SAR 50,000 annually. 

These additional items are often overlooked but are essential to a realistic business setup budget in Saudi Arabia. 

? Establishing a Fully Foreign-Owned Company in Saudi Arabia

Setting up a fully foreign-owned entity in Saudi Arabia presents major advantages. So, knowing the legal, regulatory, and administrative steps is important to setting up a fully foreign-owned entity in Saudi Arabia offers significant advantages — but it’s essential to understand the legal, regulatory, and administrative steps involved, all of which require careful attention and local expertise. 

Here at TASC Outsourcing, we bring over 17 years of experience in helping international businesses launch and grow across the GCC. We’ve supported clients from multiple industries — including tech, logistics, retail, and consulting — giving us the capability to ensure a structured, compliant, and Smooth market entry 

  : Our Business Setup Services Include

• Company Formation and Licensing 
  We manage all aspects of the company registration process in Saudi Arabia, from initial documentation to final licensing. 

• Regulatory and Government Liaison 
  Our local team coordinates directly with ministries and government bodies to ensure all regulatory requirements are met. 

• Operational Support 
  From visa processing and HR outsourcing to payroll services and office setup, we deliver end-to-end solutions. 

• Market Knowledge 
  We provide guidance on Saudi labour law, sector-specific trends, and operational strategies to help you make informed business decisions. 

Start Your Saudi Business Journey with Confidence 
At TASC Outsourcing, we bring over 17 years of experience supporting businesses across the GCC. Over the years, we’ve partnered with clients from diverse industries to turn their Saudi expansion plans into successful ventures. 
Our 'local' expertise team, based in Saudi Arabia, and in-house built technology TASC, offers a comprehensive suite of business setup solutions tailored to your unique goals. From selecting the right license to navigating regulatory requirements, we provide fast, dependable, and expert advice at every step. 

 Get in touch with our team today for tailored business solutions and start building your future in one of the fastest-growing economies. 

Sources 

• Saudi Arabian General Investment Authority (SAGIA): www.sagia.gov.sa 

• Vision 2030 Official Website: www.vision2030.gov.sa 

• Ministry of Commerce and Investment: www.mci.gov.sa 

• Saudi Gazette Business News: www.saudigazette.com.sa