Minimum Capital Requirements for Foreign-Owned Companies in Saudi Arabia

Short Answer

A foreign-owned LLC or Simplified Joint Stock Company (SJSC) in Saudi Arabia has no statutory minimum capital under the Companies Law (Royal Decree M/132). A closed joint stock company needs SAR 500,000 ($133,333), with 25% paid in cash at incorporation. Higher floors apply to some activities: 100% foreign-owned trading has historically required SAR 30 million ($8 million). Regulated sectors such as banking, insurance and healthcare also set their own minimums.

About the Author

The author is a business setup consultant who has spent over a decade advising foreign investors on GCC market entry, handling business setups across manufacturing, technology, professional services, and trading sectors, and working with clients from initial activity mapping through full operational setup.

Key Takeaway:

• Your capital floor comes from three layers, and the highest one applies. The Companies Law sets minimums by legal form (LLC and SJSC: none; Closed JSC: SAR 500,000 ($133,333) with 25% paid in cash), the Investment Law governs foreign ownership and what counts as share capital, and sector regulators (SAMA, CMA, healthcare, education, telecom) set their own, usually much higher, requirements. Most founders err by planning around the Companies Law figure alone.
  
  
• Legal form is only half the story, activity can override it. Most professional services (consulting, IT, digital marketing) carry no capital floor for foreign owners, but 100% foreign-owned trading has historically required SAR 30 million ($8 million) plus a five-year plan and Saudisation commitments. Lower-capital alternatives include bringing in a Saudi/GCC partner, opening a branch, setting up an RHQ, using an SJSC, or holding through a UAE company.
  
  
• Declared capital is not your setup budget. Even with no statutory minimum, banks and MISA expect a credible figure that matches your business plan, typically six to twelve months of rent, salaries, and visa costs. Separately budget for MISA fees, Commercial Record, Chamber membership, notarised Articles, office lease, Qiwa work permits, iqamas, GOSI, and ZATCA registration. Capital must be deposited via an "under formation" bank account (or contributed in kind with a certified valuation) and proved with a deposit certificate before incorporation.

How Much Capital Do You Need to Set Up a Saudi Company? Legal Form, Activity, and Regulator Requirements Explained

A foreign-owned limited liability company (LLC) in Saudi Arabia has no statutory minimum capital. A Simplified Joint Stock Company (SJSC) has none either. A closed joint stock company needs SAR 500,000 ($133,333), with 25% paid in cash at incorporation. 

Some activities, trading in particular, and regulated sectors such as banking and insurance carry their own, much higher floors.

The minimum capital requirement Saudi Arabia company founders face depends on three things: the legal form, the business activity, and whether a sector regulator is involved. In this guide, we set out each layer, the figures that apply in 2026, and what we see in practice when we set up Saudi entities for clients from the UAE and abroad. 

We link every figure to its official source, so you can check it yourself.

Note: Currency conversions in this article are based on the pegged exchange rate of SAR 3.75 = $1 and are provided for general reference only. Actual fees should be verified with the relevant Saudi authorities or our qualified advisors before making financial decisions. 

The Three Layers That Decide Your Capital

Saudi Arabia doesn't set one number for every company. Your capital floor comes from three sources, and whichever is highest applies to you.

1. The Companies Law. The Saudi Companies Law (Royal Decree M/132, in force since January 2023) sets minimums by legal form. It applies to every company, Saudi or foreign.

2. The Investment Law. The updated Investment Law came into force in February 2025. It replaced the old foreign investment licence with a simpler filing with the Ministry of Investment (MISA), and it gives Saudi and foreign investors equal treatment in similar circumstances. Activities on MISA's excluded list still need a specific exception. The law also redefined share capital so that it no longer includes loans, bonds, or debt instruments.

3. Sector regulators. Banks, insurers, finance companies, clinics, schools and telecom operators answer to their own regulator, which sets its own capital rules.

The mistake we see most often is planning around the Companies Law figure alone, then finding out the activity carries a separate condition. We check all three layers before we advise a client on a number.

Minimum Capital by Legal Form

‍Source: Saudi Companies Law, Royal Decree M/132. USD figures use the fixed rate of SAR 3.75 to $1 set by the Saudi Central Bank.

The LLC. This is the structure we recommend to most foreign clients. No minimum doesn't mean SAR 1, though. Banks and MISA both look at whether your declared capital fits the business you describe. For a small consultancy, we usually advise a figure that covers six to twelve months of rent, salaries, and visa costs.

The Simplified JSC. Several guides online list the SJSC at SAR 10 million ($2.67 million). That's incorrect. Under the Companies Law, the SJSC has no minimum capital, can have a single shareholder, and allows flexible management. For startups planning to bring in investors later, it's often a better fit than an LLC.

The Closed JSC. You declare SAR 500,000 ($133,333) and pay at least a quarter in cash before incorporation. It suits joint ventures and larger companies with several shareholders.

Activity-Based Rules for Foreign Investors

Most service activities carry no capital floor. Management consulting, IT services, digital marketing and similar professional services are generally open to foreign owners with no set minimum. Engineering consultancy is also open, but the condition is experience rather than capital: the parent firm usually needs a track record across several countries.

Trading is the main exception. A 100% foreign-owned trading company has historically required SAR 30 million ($8 million) in capital, a five-year investment plan and Saudisation commitments. Most small and mid-sized trading clients we work with bring in a Saudi partner or choose a different structure. These conditions have changed more than once, so we confirm the current position on the Saudi Business Center for every trading file.

For regulated sectors, the regulator sets the number. In financial services, that's the Saudi Central Bank (SAMA) or the Capital Market Authority. Healthcare, education, and telecom each have their own authority. In these sectors, the minimum capital requirement Saudi Arabian company owners must meet is set licence by licence and is usually far above the Companies Law figures.

Capital Is Not Your Setup Budget

The capital figure and the cash you need in year one are two different numbers. Even an LLC with a modest declared capital needs to budget for:

• MISA fees and the Commercial Record 
• Chamber of Commerce membership
• Notarised Articles of Association
• A physical office lease, which MISA expects to see
• Work permits through Qiwa and iqamas for the first hires
• GOSI contributions and ZATCA tax and zakat setup

We budget these as a separate line from capital for every client, so neither one is short.

How to Deposit and Prove Your Capital

For companies that need paid-in capital at incorporation, you open a bank account for the company "under formation" and deposit the cash. The bank issues a deposit certificate, which goes into the incorporation file. Capital can also be contributed in kind, such as equipment, property or trademarks, but that requires a certified valuation first.

Transferring capital from a UAE or overseas account is routine. Banks will ask for your Articles of Association, Commercial Enrollment details, and proof of the source of funds for anti-money laundering checks. Once the Commercial Enrollment is issued, the capital becomes working money for rent, salaries, and equipment. Only the declared figure in your Commercial Enrollment and Articles of Association stays fixed.

Lower-Capital Routes if the Thresholds Are Too High

• Bring in a Saudi or GCC partner. This can reduce or remove foreign-ownership conditions in activities like trading.
• Open a branch. A branch of your foreign company needs no separate capital, though you'll need the parent company's audited financial statements.
• Set up a Regional Headquarters (RHQ). There's no capital minimum. The commitment is to staffing and running regional functions from Saudi Arabia.
• Use an SJSC. A share-based structure without the SAR 500,000 ($133,333) JSC floor.
• Hold through a UAE company. Depending on who owns the UAE entity, this can change how your investment is treated. We review this structure case by case.

Example Scenarios: How Capital Plays Out in Practice

Scenario 1: A UAE consultancy entering Riyadh. A Dubai-based management consultancy with five staff wants a 100% owned Saudi entity. Consulting carries no activity-based floor, so an LLC with no statutory minimum works. We'd advise declaring enough capital to cover the first six to twelve months of operating costs, because a credible figure speeds up bank onboarding.

Scenario 2: A European distributor. A mid-sized distributor wants to sell its products directly in Saudi Arabia. As a 100% foreign trading company, it would face the high trading thresholds. The practical options are a partnership with a Saudi distributor, or a branch or RHQ if its Saudi role is coordination rather than direct sales.

Setting Up Your Saudi Company with RadiantBiz KSA

RadiantBiz KSA is a business setup consultancy with offices in Dubai and Riyadh. We handle company formation across the UAE, Saudi Arabia, and other markets. Our founder and CEO, Rizwan Ansari, spent over 15 years working with major UAE banks. That matters most at the stage where many Saudi setups stall: bank onboarding and capital deposit. We work as a single point of contact. We check the capital rules for your specific activity, recommend the legal form, prepare your documents, and manage the MISA, Commercial Enrollment, banking, and visa steps through to operation. Our KSA tax and zakat team keeps you compliant after setup.

Frequently Asked Questions

1. Can a foreigner open a company in Saudi Arabia with SAR 5,000 ($1,333)? For an LLC in an activity with no capital condition, the Companies Law allows it. We advise against declaring such a low figure because banks and MISA look for capital that matches your business plan, and a very low number can slow down approvals and bank onboarding.

2. Does the capital have to stay in the bank after incorporation? No. Once your Commercial Enrollment is issued, you can use the capital for normal business costs. The declared figure stays on record, but the account balance can move like any operating account.

3. Do I need capital for a branch office or an RHQ? Neither has a set capital minimum. A branch relies on the parent company's financial standing, and an RHQ comes with staffing commitments instead of a capital threshold.

Lower Minimums, Higher Stakes — Let Us Confirm Your Saudi Capital Requirement 

For most foreign founders, the minimum capital requirement Saudi Arabia company law sets is lower than expected. An LLC or SJSC needs no statutory minimum. 

The work lies in matching capital to your activity, your regulator, and your first-year costs, and in getting the banking side right.

Seek our professional on-the-ground guidance, contact us via mail at info@radiantbiz.com, WhatsApp‬, or call us at +971521322895‬! We'll confirm the capital figure for your activity, recommend the right legal form, and map out your first-year budget.