Saudi Arabia

Operating a business

Setting up a company

Legal business entities

Different types of companies	Number of partners/shareholders	Maximum and/or minimum capital	Liabilities	Registration fees
The Sole Proprietorship is a single-partner company.	1 person	No minimum capital.	The individual entrepreneur is liable for debts the company on his personal possessions.
Sharikat Al-Mossahamah (S.A.M) is a Public Limited Company.	Minimum 5 partners.	Minimum SR 2 million. If the capital is open to the public, Minimum SR 10 million.	Liability is limited to the amount contributed.
SHARIKAT ZAT MASSOULIYYAH MAHDOOAH (S.M.M) is a Private Limited Company.	Minimum 2 partners. Maximum 50 partners.	Minimum SR 500,000, but in practice, rarely less than SR 1 million.	Liability is limited to the amount contributed.
Sharikat Tadhamou is a General Partnership Company	Minimum 2 partners.	No minimum capital.	Liability is unlimited.
Sharikat Tawsiyah Bel-ashom - Ashom is a partnership limited by shares.	Minimum 2 partners.	Minimum SR 100,000. At least 50% issued at the registration.	At least one partner must have an unlimited liability. Liability of other partners is limited to the amount contributed.

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

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.

Cost of labor

Minimum wage: No minimum wage standard
Average wage: For workers- SR 2461 per month (2001)
Social contributions: Social security contributions paid by employers: 11%
Social security contributions paid by employees: 9%

Social partners

Bargaining power: 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.
Unions
Unionization rate
Labor regulation bodies: Ministry of labor