How do you set up an LLC in Saudi Arabia, and what must its articles of incorporation contain?
An LLC in Saudi Arabia is a limited liability company owned by one or more individuals or companies, where each owner is liable only up to their share of the capital (Article 156 of the Companies Law). You form it online on the Saudi Business Center. You set the partners, capital, management and Arabic articles of incorporation, and the company comes into existence once it is entered in the Commercial Register.
A single owner is allowed. The Law sets no maximum number of partners, and it sets no general minimum capital, although some activities have their own thresholds. Foreign investors register with the Ministry of Investment (MISA) first. This guide covers the rules, what the articles must say, the steps, official fees and the yearly duties.
You can book a consultation on WhatsApp with the team at Al-Safwa Law Firm for Advocacy and Legal Consultations to review your documents and explain your legal options clearly.
Table of Contents
What is an LLC in Saudi Arabia?
A limited liability company (LLC) in Saudi Arabia is a company incorporated by one or more natural or legal persons. Its assets and debts are separate from those of its owners, so the company alone answers for its debts. The partners risk only the capital they put in. It is governed by Part VI (Articles 156 to 184) of the Companies Law.
The rules come from the Companies Law issued by Royal Decree No. M/132 dated 1/12/1443H (official translation, Bureau of Experts at the Council of Ministers). The Law replaced the previous companies law. According to the Ministry of Commerce announcement of 4 January 2023, it took effect on 26/6/1444H (19 January 2023). The Arabic text governs, and the English translation is for guidance.
| Point | Rule under the Companies Law |
|---|---|
| Owners | One or more natural or legal persons (Article 156); no maximum number is set |
| Liability | Limited to each partner’s interest in the capital (Article 156) |
| Capital | Set by the partners in the articles and divided into equal, indivisible interests (Article 174) |
| Founding document | Articles of incorporation; articles of association if there is a single owner (Articles 7 and 157) |
| Language | Arabic, with an optional translation (Article 7(3)) |
| Management | One or more managers, partners or outsiders (Article 160) |
| Legal personality | From registration in the Commercial Register (Article 9) |
| Nationality | Every company formed under the Law is a Saudi company with its head office in the Kingdom (Article 3) |
Single-person LLC or LLC with two or more partners?
Both are the same legal form, but the founding document and the decision-making rules differ. Under Article 7, a company has articles of incorporation, while an LLC owned by one person has articles of association. Article 157 adds that, in a single-person LLC, every reference to the articles of incorporation means the articles of association.
| Point | Single-person LLC | LLC with two or more partners |
|---|---|---|
| Founding document | Articles of association | Articles of incorporation |
| Who decides | The owner holds the powers of the manager, board of managers and general assembly | The general assembly of partners and the manager(s) |
| How decisions are recorded | In writing, in a special register kept at the company (Article 157) | In minutes entered in a special register (Article 165(5)) |
| Manager | The owner, or one or more managers he appoints | Appointed in the articles or by a separate contract (Article 160) |
| Transfer of interests | No partners hold a right of first refusal | Other partners hold a 30-day right of first refusal (Article 178) |
A company becomes a single-person LLC also when all its interests pass to one person (Article 157(1)), for example after the other partners sell their interests to him.
Partners, capital and liability
How many partners can an LLC have?
Article 156 says an LLC is formed by “one or more” natural or legal persons, and the Ministry of Commerce service page Establish a limited liability company lists no maximum. Some online guides still mention a 50-partner limit or a supervisory board above 20 partners. Neither rule appears in Part VI of the current Law, so check any such claim against the official text.
The same service page sets conditions for partners. Partners must be at least 18, and a minor needs a guardianship deed. Partners must not be government employees. A company that joins as a partner must have a commercial registration that is neither cancelled nor suspended.
Is there a minimum capital for an LLC?
The partners set the capital in the articles of incorporation (Article 174). The capital is divided into interests of equal value, which cannot be split or traded like shares. Part VI sets no fixed minimum amount. Some activities, however, carry their own capital or ownership conditions, especially when foreign investors are involved (see the MISA table below), and regulated activities may need a licence from the competent authority first.
A partner may contribute cash or in-kind assets, such as equipment or premises. An in-kind contribution needs a report from one or more accredited valuers showing its fair value, plus the approval of the other incorporators (Articles 158(2) and 159).
Limited liability, and when it does not protect you
The basic rule is that the company alone pays its debts, and a partner loses at most his capital contribution (Article 156). The Law still makes people personally liable in some situations:
- Failure to register the articles or their amendments: the incorporators, partners or managers responsible are jointly liable for the resulting damage (Article 8(2)).
- Incorporation not completed: anyone who acted in the company’s name during the incorporation period is personally and jointly liable to third parties (Article 9(3)).
- Losses of half the capital: the manager must call the general assembly within 60 days of learning of it, so the partners can decide to continue (with measures to resolve the losses) or dissolve the company (Article 182).
Management, general assembly and partners’ decisions
An LLC is run by one or more managers. They can be partners or outsiders and serve for a fixed or open term (Article 160). The manager represents the company before courts, arbitration tribunals and third parties. Appointing or replacing a manager, or limiting his powers, has no effect on third parties until it is entered in the Commercial Register (Article 162). If a sole manager’s post becomes vacant, the partners must appoint a new one within 15 days (Article 163).
The general assembly includes all partners. It must meet at least once a year, within six months after the end of the financial year (Article 165). Each partner has votes equal to the number of interests he holds, and the articles cannot change this (Article 171). The Law provides these default majorities:
| Decision | Rule in the Law | Note |
|---|---|---|
| Ordinary partners’ decisions | Partners holding more than half of the capital (Article 166(3)) | The articles may require a higher majority |
| Second call if that majority is not reached | Majority of the interests represented at the meeting (Article 166(4)) | Applies unless the articles provide otherwise |
| Amending the articles, including capital increase or decrease | At least three quarters of the capital (Article 172(1)) | The articles may require a higher percentage |
| Raising the nominal value of interests or suspending pre-emptive rights | All partners (Article 172(3)) | Unanimity required |
| Adding drag-along and tag-along clauses | At least 90% of the capital (Article 181) | Needed to add these clauses to the articles |
| Removing the manager by court order | Partners holding at least one quarter of the capital (Article 164(2)) | Petition to the competent judicial authority |
What must the LLC articles of incorporation include?
Article 158(1) lists the information the articles of incorporation of an LLC must contain:
- The partners’ names and particulars.
- The company’s name, which must state its legal form (Article 5).
- The head office.
- The company’s purpose (objects).
- The capital and how it is distributed among the partners.
- The partners’ acknowledgment that their contributions are fully paid.
- The company’s term, if any.
- The management of the company.
- Assignment (transfer) of interests.
- How notices are sent to partners.
- How partners’ decisions are issued.
- How profits and losses are distributed.
- The start and end dates of the financial year.
- Termination of the company.
- Any other terms the partners agree on that do not conflict with the Law.
Under Article 158(2), two documents go with the application: the incorporators’ acknowledgment that they meet all incorporation requirements, and the valuer’s report for any in-kind contribution.
Clauses worth negotiating before you sign
Item 15 lets the partners add their own protections. Many templates leave it nearly empty, and the gap usually shows at the first disagreement. Points to decide in advance:
- Exit and transfer: Article 178 gives the other partners, or the company, 30 days to buy an interest offered to an outsider. The articles may set a longer period, a different notice method or another valuation method.
- Death or withdrawal of a partner: an LLC does not end on a partner’s death, interdiction, insolvency, bankruptcy or withdrawal unless the articles say otherwise (Article 184). The right of first refusal does not apply to inheritance or bequest (Article 178(4)).
- Higher majorities for key decisions, so that a majority partner cannot decide alone.
- Disputes: the articles may send disputes between partners, or with managers, to arbitration or other alternative settlement, except for criminal matters (Article 173).
- Profits and reserves: interests carry equal rights to profits unless the articles say otherwise (Article 175). The current Law does not impose a fixed statutory reserve on LLCs. Under Article 177, the articles may set one, or the annual general assembly may create one.
The partners can also sign a separate partners’ agreement or family charter (Article 11). Before signing, a corporate contracts lawyer can check that its terms match the articles.
Arabic text, Ministry templates and registration
- The articles must be in Arabic and may carry a translation into another language (Article 7(3)). Arabic is the required language; a translation is optional.
- The Ministry of Commerce prepares templates for each company form (Article 7(4)). A template is a starting point, and the clauses above still need to be added.
- The articles and every amendment must be in writing, or they are void (Article 8(1)).
- The articles cannot be relied on against third parties until they are registered in the Commercial Register (Article 8(4)).
How to set up an LLC in Saudi Arabia: Saudi Business Center steps
For Saudi and GCC founders, the Ministry of Commerce page Establish a limited liability company describes an online service on the Saudi Business Center:
- Log in to the Saudi Business Center and choose the limited liability company incorporation service.
- Enter the number of partners and, if needed, the company’s status.
- Enter the company’s term, location, activities and purposes.
- Complete the partners’ data, commercial register data, company data and management data.
- Complete the articles (contract) data, review the summary and submit.
- Pay the invoice. The Ministry lists the service duration as immediate.
According to the same page, the service covers the commercial registration and the articles. It also registers the company with several government bodies, including the Zakat, Tax and Customs Authority (ZATCA) and social insurance, and it covers the national address and the Chamber of Commerce subscription. Activities that need a licence from the Saudi Central Bank (SAMA) require that licence or its preliminary approval first. A professional company needs at least 70% licensed partners, and licensed Saudi partners must hold at least 25%.
Official government fees
The fees below are as published by the Ministry of Commerce on its service pages, checked on 4 November 2026. They may change, so check the official source before you pay.
| Item | Amount | Source |
|---|---|---|
| Commercial registration of an LLC | SAR 1,200 | MoC, Establish a limited liability company |
| Publication fees | SAR 500 | Same page |
| VAT | 15% | Same page |
| LLC under an investment licence (foreign partners) | SAR 1,200 + SAR 500 publication + 15% VAT | MoC, Establishing a company under an investment license |
Other authorities, such as MISA or a sector regulator, set their own fees. MISA, for example, notifies the registration fee after it approves the application.
What happens after you submit
- The Commercial Register decides on a complete application. A rejection must give reasons (Article 6(3) and (4)).
- The incorporators may appeal a rejection to the Ministry of Commerce within 60 days of notification. If the appeal is rejected, or no decision is made within 30 days, they may go to the competent judicial authority (Article 6(4) and (5)).
- The company acquires legal personality once it is registered. Contracts that the incorporators concluded for it pass to the company (Article 9).
- The company may start operating only after registration and after obtaining any licences its activity needs (Article 10).
Foreign ownership: an LLC through MISA investment registration
A foreign individual or company that wants to own all or part of an LLC must first obtain Investment Registration from the Ministry of Investment (MISA) under the Investment Law. Many guides, and some Ministry of Commerce pages, still call this the MISA investment licence. According to the MISA FAQ (last modified 24/06/2026):
- MISA issues registration to legal entities, foreign companies and Premium Residency holders. You apply online, without visiting MISA.
- There are two tracks, available activities and restricted activities, and review takes up to 10 days.
- Whether a Saudi partner is required depends on the activity.
- A GCC investor counts as a local investor and applies through the Ministry of Commerce, unless there are foreign investors in the GCC company’s ownership.
- The registration certificate is issued in Arabic only.
The MISA Investor Guide (13th edition, 03-2026) lists these documents:
- The foreign partner’s commercial registration, authenticated by the Saudi embassy.
- The foreign company’s financial statements for the last financial year, also authenticated by the embassy.
- An ID copy for a GCC individual partner whose data is not in Absher.
- The requirements of the chosen activity.
Premium Residency holders are exempt from the first three. The registration fee is notified after approval and must be paid within 15 business days, or the registration is void. The guide gives a processing time of 10 working days.
Some activities carry minimum capital and Saudi-participation rules. These examples come from section 5.1.1 of the same guide:
| Activity | Minimum capital (SAR) | Minimum Saudi participation | Additional requirement |
|---|---|---|---|
| Commercial (trading) with a Saudi partner | 26,666,667 | 25% | None listed |
| Commercial, 100% foreign | 30,000,000 | None | Presence in at least 3 regional or global markets |
| Professional activities with a Saudi partner | None listed | 25% | Both partners licensed in the same field; a non-professional partner may hold no more than 30% |
| Engineering consulting, 100% foreign | None listed | None | Presence in 4 countries and at least 10 years of experience |
Once registered with MISA, the company is set up on the Ministry of Commerce service Establishing a company under an investment license. This service requires an investment certificate that remains valid for at least 30 days, and the Ministry lists its duration as within 72 hours.
Holding a business in a Saudi citizen’s name on behalf of a foreigner, instead of registering the foreign investment, is treated as commercial concealment. Investors with an existing arrangement of this kind should review it with a commercial concealment lawyer.
Common reasons an LLC application is returned
These are the most common reasons the official conditions are not met, taken from the Ministry of Commerce and MISA service conditions:
- A partner is a government employee, or is under 18 without a guardianship deed.
- A corporate partner’s commercial registration is suspended or cancelled. A CR can be suspended, for example, after a missed annual confirmation.
- The activity needs a SAMA or sector licence that was not obtained first.
- The MISA investment certificate has less than 30 days of validity left when the Commercial Register application is filed.
- An in-kind contribution has no accredited valuer’s report, or the other incorporators have not approved its value.
- A professional company does not meet the 70% licensed-partner or 25% Saudi-licensed-partner ratios.
Annual obligations of an LLC in Saudi Arabia
Registration is the start. The Law and the Commercial Register rules set recurring duties:
- Annual confirmation of the CR: the CR has no expiry date, but its data must be confirmed every year on the Saudi Business Center, and changes must be updated within 15 days (Commercial Register Law, Article 10). Our guide to commercial registration renewal and annual confirmation explains the steps and the suspension timeline.
- Annual general assembly: held within six months after the financial year ends (Article 165(2)). The manager sends partners the financial statements, the activity report and any auditor’s report at least 21 days before the meeting (Article 167(2)).
- Financial statements: prepared under the accounting standards approved in the Kingdom and deposited, as the Regulations provide, within six months of the financial year end (Article 17(2)).
- Auditor: micro and small companies are exempt from appointing one. The exemption does not apply where the articles require an auditor, where the company is a foreign company, where it owns or is owned by another company (unless all the companies concerned are micro or small), or where another law requires one (Article 19). Partners with at least 10% may still ask for an auditor.
- Registering changes: any change of manager, partners, capital or articles must be recorded in the Commercial Register before it can be relied on against third parties (Articles 8 and 162).
- MISA annual update: a foreign-owned LLC updates its investment registration data with MISA each year (MISA Investor Guide, service 3.2.1).
Choosing the structure, drafting the articles and filing them are covered by our company formation and registration lawyer service. Later questions on governance or disputes between partners go to a corporate lawyer in Jeddah.
Frequently Asked Questions about an LLC in Saudi Arabia
To sum up, an LLC in Saudi Arabia needs Arabic articles that cover the items in Article 158, a manager whose appointment is registered, and capital that fits the activity. Foreign investors also need valid MISA Investment Registration. The company exists from its registration in the Commercial Register and must then keep its CR, general assembly and financial statements up to date.
Before you sign, review the transfer, majority and exit clauses, since templates rarely cover them.
To get a legal consultation from our team, contact us via the WhatsApp button at the bottom of the screen.
Read also:
Sources:
- Companies Law, Royal Decree No. M/132 dated 1/12/1443H (official translation, Bureau of Experts at the Council of Ministers): Articles 3, 5 to 11, 17 to 19 and 156 to 184.
- Companies Law, Arabic text (Bureau of Experts at the Council of Ministers).
- Ministry of Commerce: implementation of the new Companies Law (4 January 2023).
- Ministry of Commerce: Establish a limited liability company (checked 4 November 2026).
- Ministry of Commerce: Establishing a company under an investment license (checked 4 November 2026).
- Ministry of Investment: Frequently Asked Questions (last modified 24/06/2026).
- Ministry of Investment: Investor Guide, 13th edition (03-2026): services 3.1.1 and 3.2.1, section 5.1.1.
A legal advisor holding a Bachelor’s degree in Law from the prestigious Cairo University. He possesses extensive experience spanning over 25 years in criminal, civil, and family law, during which he has achieved notable accomplishments that have solidified his reputation as a valuable asset to any legal team
