It is no secret that expansion to Saudi Arabia has become notorious for being extremely costly, with complaints of corporate service providers (CSPs) and law firms charging sky-high fees for landing services rampant among foreign entrepreneurs. At Tawaref, we have heard similar feedback from the tens of startups we meet monthly. By and large, companies cite CapEx costs of landing as the number one reason why they delay their decision to land in Saudi Arabia. 

A popular Saudi CSP can set you back an astronomical SAR100,000+ for just incorporating your company in the country. But does it really cost that much to simply get your business on the ground? Are government fees the reason they are so high, or do service providers keep the majority? Most importantly, what is the total fair cost of landing in Saudi Arabia?

In this article, as part of our Saudi Expansion series, we will find the answers to these questions as well as many more surrounding the hard costs that an entrepreneur must pay to land in Saudi Arabia. We will provide you with a checklist of all the hard costs of landing, including government fees, medical checkups and insurance, Iqama costs, and more. 

Government and Non-Government Hard Costs 

Compared to neighboring nations, government fees in Saudi Arabia are quite modest when it comes to administrative transactions. This includes opening a company, changing shareholders, opening a chamber of commerce, attestation fees, etc. 

It is when it comes to hiring a non-Saudi workforce that the costs begin to rapidly rise. Foreign workers are subject to certain additional costs just by virtue of their employment status. This includes the work visa fee, Iqama fee, dependent fee, medical insurance, and other workforce-related fees. As the GM or founder will still be considered the first non-Saudi workforce member, their Iqama acquisition will form a significant chunk of the overall hard costs of landing. 

“Government fees in Saudi Arabia are relatively low; hiring non-Saudi labour is where the costs lie”

A holistic list of all hard-cost elements:

The following section is a checklist of all the items that make up the hard cost of opening a company in Saudi Arabia. Hint: You can use this checklist to negotiate with your CSP to make sure they are covering all their bases.

Please note that this estimation does not include these main elements, as it varies based on company size, city of business operation, etc. 

• Travel or accommodation costs of visiting Saudi Arabia for any Iqama retrieval purpose.
• Visa issuance at the Saudi embassy in your home country (medical checkup, fingerprint scan, etc)
• Corporate documents attestation costs in your home country 
• Additional vertical licenses for special sectors (fintech, hospital). Tawaref plans to publish detailed descriptions of each in future articles. 
• Soft costs, including lawyer and CSP fees. This will be discussed in detail in further articles.

Variable costs explained

The majority of the costs listed above are fixed flat charges. However, there are a few costs that are variable, with the fees changing depending on certain factors. The following explains these variable costs in detail:

• Medical Insurance

Medical insurance depends on a few things, including age, gender, marital status, medical history, etc. As the age of the recipient increases, medical insurance will also become more expensive. Male founders are also cheaper than female founders. Apart from this, the price of your plan will depend on the features covered, the brand of insurance covered, and the hospital network. 

Note: For this article, we will be assuming the most cost-effective medical insurance has been selected. 

• National Address (i.e., office rent)

The national address rate will depend on whether it is a virtual office, co-working space, or a dedicated apartment. If you manage to obtain your accelerator or VC’s address, this fee could even be waived entirely. However, using the latter may cause issues when you opt to open a bank account. To avoid such situations, it is advised to secure a proper national address beforehand for at least 6 months post-incorporation. Tawaref plans on discussing co-working spaces in greater detail in future articles.

Note: Our estimation is based on a virtual office for 6 months. 

• Number of Iqamas

The Iqama is a vital document for any foreign entrepreneur. If a company has more than one 

Note: Our figures are in reference to the maintenance of a single Iqama. 

• Exit/Entry Visa

Except for premium residents, all expatriates who reside in Saudi Arabia must issue an entry/exit visa when leaving the country. This can be granted for both single and multiple entries, depending on the traveler’s requirements. A single-entry visa will set you back anywhere between SAR200 and SAR2300, depending on the duration of your external stay. 

Note: Our estimation only includes a single exit/entry visa (SAR200)

Bottom line: What is the minimum hard cost to land in Saudi Arabia?

After considering all the above, the total hard cost (inclusive of the entire checklist covered above, assuming the basic variable options) to incorporate in Saudi Arabia is anywhere between SAR20,000 and SAR25,000 ($5,300–$6,600).

“The total hard cost to incorporate in Saudi Arabia is around SAR20,000–25,000”

Final thoughts

We know this is huge news, considering certain lawyers and CSPs charge upwards of 100k SR just for incorporation. 

So, what is the fair price of a service provider, if any such thing exists? In the upcoming piece, Tawaref will attempt to provide a brief overview of the market's soft costs of landing, categorising CSPs and law firms into multiple price groups, shedding light on their services, cost drivers, the pros and cons of each tier, and more. 

Saudi expansion series 

This article is part of the Saudi Expansion series, aiming to educate international entrepreneurs and business owners on Saudi Arabia's foreign investment regime for a smooth landing. With a focus on original, technical, and informative content, our goal is to get business owners closer to securing that first riyal in their pockets.