Business Administration in Saudi Arabia

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Setting Up a Company

Legal Business Entities

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
The Sole Proprietorship is a single-partner company.
No minimum capital.
1 person
The individual entrepreneur is liable for debts the company on his personal possessions.
SAR 200
Sharikat Al-Mossahamah (S.A.M) is a Public Limited Company.
Minimum SR 2 million. If the capital is open to the public, Minimum SR 10 million.
Minimum 5 partners.
Liability is limited to the amount contributed.
SAR 1.600
Minimum SR 500,000, but in practice, rarely less than SR 1 million.
Minimum 2 partners. Maximum 50 partners.
Liability is limited to the amount contributed.
SAR 1.200
Sharikat Tadhamou is a General Partnership Company
No minimum capital.
Minimum 2 partners.
Liability is unlimited.
SAR 800
Sharikat Tawsiyah Bel-ashom - Ashom is a partnership limited by shares.
Minimum SR 100,000. At least 50% issued at the registration.
Minimum 2 partners.
At least one partner must have an unlimited liability. Liability of other partners is limited to the amount contributed.
SR 1.600
Business Setup Procedures
The Ministry of Commerce and Industry has to issue a license to any new business. In case of banking companies the Ministry of Finance.



For more details, refer to: 'Applications and Procedures', Saudi Ministry of Commerce and Industry

The Competent Organization
Ministry of Commerce and Industry


Ministry of Finance

Department of Zakat and Income Tax

Search a Company or a Financial Report
Arabian Travel Directory

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Working Conditions

Legal Weekly Duration
8 hours a day or 48 hours a week. The number of working hours may be raised to 9 hours a day where the workman does not work continuously, such as seasonal establishments, hotel, snack bars, restaurants, etc.
Retirement Age
60 years for men and 55 years for women.
Working Contracts
Broadly there are two types of contracts: Permanent and Fixed-term.

Majority of the contacts for foreigners in the labor sector are of fixed-term, while as for the locals these are of permanent type.

The number of 'temporary contracts' is very low.

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Cost of Labor

Minimum Wage
No minimum wage.
Average Wage
Average monthly gross earnings is SAR 2,461 (USD 656).
Social contributions
Social Security Contributions Paid By Employers: 11%
Social Security Contributions Paid By Employees: 9%

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Social Partners

Social Dialogue and Involvement of Social Partners
The labor law does not provide for collective bargaining. However, the companies that employ more than 100 Saudis are allowed to form "labor committees." There are 15 labor committees registered in the Kingdom.
Labor Regulation Bodies
Ministry of labor

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