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Comprehensive Guide to Starting a Trading Company in Saudi Arabia 

With one of the largest retail sectors in the GCC, the Kingdom of Saudi Arabia continues to prove that it remains one of the top choices for starting a trading business across the MENA Region. Beyond the advantages presented by Saudi Arabia’s thriving retail sector, the KSA continues to push initiatives that propel its presence as a global business hub. 

If you’re interested to navigate the vibrant business landscape that Saudi Arabia offers, starting a trading business can be a good choice for you. In this guide, we will give you an overview of the KSA’s retail sector and why this is an ideal business venture for startups and SMEs. We will talk about the following topics: 

  • Overview of Saudi Arabia’s retail sector 
  • Benefits of starting a trading company in Saudi Arabia 
  • Steps to starting a Trading Company in Saudi Arabia 
  • Cost of starting a trading company in Saudi Arabia 

Overview of Saudi Arabia’s retail sector  

Saudi Arabia’s retail sector is projected to experience a compound annual growth rate (CAGR) of 7.5% between 2022 and 2027, reaching a market value of $140 billion by 2027. This growth is driven by the following: 

Growing population of Saudi Arabia: The population of Saudi Arabia is expected to reach 35 million by 2030, creating a large pool of potential consumers for businesses around KSA.  

Rising incomes of Saudi Arabians: As incomes in Saudi Arabia continue to rise, individuals will have more disposable income to spend in a wide range of retail goods and services. 

The increasing urbanization of Saudi Arabia: The urbanization rate in Saudi Arabia has been increasing steadily over the past few decades, leading to the growth of the retail sector in urban areas. 

The government’s investment in the retail sector: The government of KSA is investing heavily in the retail sector by providing financial resources, and infrastructure support that will help create a more attractive environment for entrepreneurs.  

Benefits of Starting a Trading Company in Saudi Arabia 

Below are the following key benefits that you can enjoy when setting up a trading business in the KSA: 

Large consumer base: With a population of over 32 million people, Saudi Arabia presents a substantial consumer market. A trading business can take advantage of this and cater to the needs of the local population. 

Strong infrastructure: Saudi Arabia’s strong infrastructure, including ports, airports, logistics facilities, and transportation, enables efficient supply chain management and smooth movement of goods within and across borders. 

Free Trade Agreements: The KSA has signed free trade agreements (FTAs) with countries, including the GCC member states. This gives way to tariff reductions, and streamlined customs procedures, providing trading companies a competitive edge in accessing international markets. 

Ease of doing business: The Saudi government has implemented streamlined procedures and established business-friendly laws and regulations, facilitating a smooth process for businesses to set up and operate in Saudi Arabia. 

Resources and Incentives: The Saudi government is committed to creating a favorable business environment through a number of support programs including tax breaks, grants, and loans. 

Highly skilled workforce: Saudi Arabia has a highly skilled workforce with a strong education system. This makes it easy for businesses to find the skilled workers you need to operate in the KSA. 

Steps to Starting a Trading Company in Saudi Arabia 

Here are the general steps involved in setting up a trading company in Saudi Arabia: 

Step 1: Choose a business structure 

The first step in establishing a business in the KSA is to select your business structure.  You can choose among the following options: 

  • Joint Liability Company 
  • Limited Partnership Company 
  • Joint Venture 
  • Joint Stock Company 
  • Limited Liability Company 

Step 2: Get a license from MISA 

Before trading, foreign entities are required to get an investment license from the Ministry of Investment (MISA). As part of this procedure, it is necessary to prepare a business plan that includes information regarding the scale and type of business, as well as projected revenue and anticipated assets.  

Step 3: Name reservation 

When registering a company in Saudi Arabia, it is important to ensure that the chosen name is neither offensive nor misleading. Additionally, it must not be similar to the name of a government agency or any religious organizations.  

Step 4: Obtain a Commercial Registration Certificate (CRC) 

Securing a commercial registration certificate is a requirement to engage in business activities in Saudi Arabia. This procedure is typically facilitated through the Ministry of Commerce and Investments.  

Our dedicated team from Creative Zone will assist you in this procedure to ensure an efficient company registration. 

Step 5:  Register your company for tax  

Once you have obtained your CRC, you can proceed with registering your company for tax. This is a mandatory requirement set by the Saudi Arabian Zakat and Tax Authority (ZATCA), and all businesses are obliged to comply. Again, Creative Zone can help you throughout this process to ensure that you maintain legal compliance in Saudi Arabia. 

Step 6: Secure a business premise lease  

Choose a suitable office location to carry out your business activities in the KSA. Ensure that the written lease agreement is properly signed by both the landlord and the tenant. 

Step 7: Open a bank account  

You will need to open a bank account in Saudi Arabia for your business transactions. This will allow you to deposit and withdraw money, and to pay bills. Take note that you must open your corporate bank within 90 days of receiving your CRC. 

Cost of starting a trading business in Saudi Arabia 

The general cost of setting up a trading company in Saudi Arabia might start at AED 9000. This doesn’t include other documents including visa, rental fees, among others.  

However, Creative Zone offers flexible payment packages which can be customized depending on your business’s needs. To know more, you may also use our cost calculator.  

Set up your trading business in Saudi Arabia with Creative Zone 

While Dubai and Abu Dhabi are often seen as the go-to choices for business in the Middle East, Saudi Arabia remains a hidden gem offering equally promising opportunities. 

With a team of over 200 business experts, including company formation specialists, legal advisors, and tax experts, Creative Zone is here to support you on your entrepreneurial journey in Saudi Arabia. We guarantee a swift and cost-efficient company formation process, ensuring you a strong foundation to thrive in the KSA.  

Contact us at 800-LICENCE (5423673) or reach out through our socials to speak with one of our consultants. 

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