Saudi business structures explained

The five company forms

Article 4 of the Companies Law says a company must take one of these forms:

Limited liability company (LLC)

An LLC can be founded by one or more natural or legal persons. Its assets and liabilities are separate from its owners’. The company alone is liable for its debts, and an owner’s liability is limited to their interest in the capital (Article 156).

One-person LLC

A single person can incorporate an LLC, or end up as its sole owner. That person holds the powers of the manager, board and general assembly, and must record decisions in writing in a register kept at the company. They can appoint one or more managers to run it (Article 157). A one-person LLC has articles of association rather than articles of incorporation.

Management

An LLC is managed by one or more managers (Article 160). Many founders appoint themselves as the first manager.

Simplified joint-stock company (SJSC)

The SJSC is one of the five forms in the Companies Law. It follows the joint-stock company rules except for a long list of excluded articles. Its shareholders can regulate its structure and working procedures in the articles of association, and can name a person to exercise the general assembly’s powers (Article 138). A single person can own an SJSC (Article 150).

Why founders consider it: an SJSC issues shares, which makes it easier to bring in investors later, while the founders still choose its governance.

Founding documents

• Partnerships and multi-owner LLCs have articles of incorporation. Joint-stock companies, SJSCs and one-person LLCs have articles of association (Article 7).
• These documents must be in Arabic. A translation can be attached, and the Ministry of Commerce provides templates for every company form (Article 7).
• The documents and any amendments must be in writing, or they are void (Article 8).

Do you need an auditor?

Micro and small companies are generally exempt from appointing an auditor. The exemption does not apply if the articles require one, if the company is listed or issues debt instruments or certain share classes, if another law requires an auditor, if it is a foreign company, or if it owns or is owned by another company that is not itself micro or small. Partners holding at least 10% can still ask for one in writing (Article 19). The Companies Law’s Regulations set the size criteria.

If you are a foreign investor

Your legal form sits on top of your MISA investment registration. Some activities also carry minimum capital or Saudi-participation rules. MISA’s Investor Guide lists, for example, 25% minimum Saudi participation and SR 26,666,667 minimum capital for a commercial activity with a Saudi partner (MISA Investor Guide, section 5.1.1). Read MISA investment registration before you choose a structure.

How to choose

• Solo founder running a service or shop: a one-person LLC keeps your personal assets separate.
• Co-founders who plan to raise investment: look at an SJSC, whose shares and custom governance suit investor rounds.
• Foreign-owned: check your activity’s MISA conditions first, because they may decide the structure for you.

Then go to the next step: issue your commercial registration.

Frequently asked questions

Sources

We opened and checked each official page below on 10 October 2026, except where marked. Where an official page did not state a figure, or we could not open it, we left the figure out instead of estimating it.

1. Companies Law, official English translation by the Bureau of Experts, PDF
2. MISA Investor Guide, 13th edition (02-2026), PDF
3. Ministry of Commerce: Start your business Not reachable during our 10 October 2026 check. Statements rely on the ministry’s published service description and are pending re-check.