Saudi Arabia: Operating a Business

Sole Proprietorship

Number of partners: One single person.
Capital (max/min): No minimum capital required.
Shareholders and liability: The individual entrepreneur is liable for the company's debts with his personal possessions.

Limited Liability Company

Number of partners: Minimum one director and one shareholder
Capital (max/min): Minimum SAR 100,000.
Shareholders and liability: Liability is limited to the amount contributed.

Joint Stock Company

Number of partners: Minimum three directors and one shareholder
Capital (max/min): Minimum SAR 500,000.
Shareholders and liability: Liability is limited to the amount contributed.

Limited Partnership

Number of partners: Minimum one director and two partners
Capital (max/min): No minimum capital
Shareholders and liability: At least one partner must have an unlimited liability. Liability of other partners is limited to the amount contributed.

Business Setup Procedures

The Competent Organisation

Saudi Arabian General Investment Authority (SAGIA)

Saudi Arabian Standards Organisation (SASO)

Ministry of Commerce and Industry

Ministry of Finance

Department of Zakat and Income Tax

For Further Information

Consult the Doing Business website, to know about procedures to start a Business in Saudi Arabia.
The Ministry of Commerce and Industry, for Business licenses.

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Principle

Saudi Arabia has written a commercial law that is generally applied consistently. Law allows debtors to conclude financial settlements with their creditors through committees under the Saudi Chambers of Commerce and Industry or through the Board of Grievances.

Bankruptcy Laws

The country has written a bankruptcy law that was enacted by Royal Decree no. N/16 dated 4/9/1416H (corresponding to 1/24/96). It is called Regulation on Bankruptcy Protective Settlement.

For Further Statistics

Ministry of Economy and Planning

For Further Information About the Labour Market

ILO, International Labour Organisation

Opening Hours

 

• 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.

• Maximum Duration

In the month of Ramadan actual working hours shall not exceed 6 hours a day or 36 hours a week, exclusive of the intervals reserved for prayer, rest, and meals.

Working Rest Day

Friday

Paid Annual Vacation

20 days with full wages payable in advance on completion of 1 year of service. 30 days when the workman completes 5 continuous years.

Retirement Age

60 years for men and 55 years for women.

Child Labour and Minimum Age For Employment

14 years is the minimum age for employment.

18 years for working in a mine or a quarry.

Pay

Minimum Wage

SAR 4,000 - Private firms are required to pay citizens a minimum of SAR 4,000/month to count nationals for Nitaqat Saudization program purposes. However, they are neither statutorily required nor are they obliged by Nitaqat program regulations.

Average Wage

SAR 10,186 for the Saudi, SAR 4,023 for the Non Saudi (GaStat, Q4 2021)

Other Forms of Pay

• Pay For Overtime

normal wage + 50%

• Pay For Rest Days Worked

Double the normal wage

Social Security Costs

The Areas Covered

Social security covers old age, disability and survivor pensions, work injury and unemployment. Visit the ISSA for more details.

Contributions

Contributions Paid By the Employer: Employers contribute 9% of monthly covered payroll (monthly earnings considered are min SAR 1,500 and max SAR 45,000) to GOSI and 2% salary of all employees for work injury. From 1 Sep 2014, an additional 1% unemployment insurance contribution is required.
Contributions Paid By the Employee: Saudi employees contribute 9% of gross monthly covered earnings, within the maximum limit of SAR 45,000. From 1 Sep 2014, an additional 1% unemployment insurance contribution is required.
Self-employed Saudi residents contribute 18% of monthly covered declared earnings (monthly earnings considered are min SAR 1,200 and max SAR 45,000). Unemployment insurance contribution is not applicable to self-employed individuals.

Competent Organization

General Organization for Social Insurance (GOSI)

Recruitment

Method of Recruitment

Direct recruiting is the most popular method of recruitment. However, the Internet is also rapidly becoming a popular hiring tool.

Recruitment Agencies

Saudi Arabia has no nationally-organised job centres. It is the responsibility of the Ministries of Labour and Social Affairs to manage employment.

Recruitment Websites

Bayt
4International Careers and Jobs

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

The labour law does not provide for collective bargaining. However, the companies that employ more than 100 Saudis are allowed to form "labour committees." Currently, there are 15 labour committees registered in the Kingdom.

Regulation Bodies

Ministry of Human Resources and Social Development