In Saudi Arabia, we often see foreign companies spend two to three months just shopping for service providers who can lead their incorporation process. The high costs quoted by such CSPs and law firms prompts them to search even more, hoping for a less expensive option. 

The total fee for Saudi landing consists of two portions. As discussed in our previous article, one is the hard costs, which are made up of government and non governmental fees (medical checkups, Iqama, administrative costs). These must be paid in any case to incorporate a company. The other is the setup partner (service provider) fee. We refer to these costs as soft costs, due to their malleable nature. 

Is there an average market price for setup services? Can we categorise setup providers into  different tiers of prices and quality of service? What are the pros and cons of each tier? Most importantly, what am I paying for? This article will attempt to answer these questions as well as many more on the soft costs behind Saudi landing. 

Note: All price dimensions mentioned in this article are based on current market conditions. For a more accurate and in-depth review contact Tawaref for a free consultation.

Saudi Setup Partner Categories 

The country is saturated with entities offering their Saudi landing services at varying price points. Depending on the size, experience, and brand reputation of the vendor, the cost at which they sell their services is different. Tawaref has done a small scan of the market in hopes to better gauge the current conditions and provide valuable information.  

The market is quite fragmented, with no price reference that can be alluded to. In fact, it is not uncommon to receive a quotation of 10,000 SR from one vendor and SAR100,000 from the other next door for the same set of services. For easier comparison, Tawaref has divided 

Saudi setups partners into three loose categories as per our findings.

“The market is quite fragmented, with no price reference that can be alluded to"

Note: All figures unless otherwise specified refer to the entire landing journey, including incorporation, Iqama, bank account opening, medical insurance, and all required filing/registrations. Specialised licenses such as SAMA/SCB fintech license have NOT been taken into account. 

• Freelancers

The first category is the smallest in terms of size, consisting of freelancers or microbusinesses working on a part-time basis with limited dedicated resources. The biggest selling point for this tier is definitely their low prices as well as their flexibility in taking on extra tasks without charging additional fees. 

However, like always, there are certain drawbacks to hiring freelancers for incorporation. Usually, they do not have any set structures in place and operate like a one-man-show. This can make it difficult to rely on them as there are no checks and balances and they could easily disappear at any point of time. Another gripe with hiring freelancers is access. There is no online portal or website where you can contact workers or view pricing packages. 

Overall, this is the cheapest option of the lot, with an average of about SAR13,000-20,000 on top of the hard costs (SAR20,000-25,000), bringing it up to 35,000-40,000 SR for the entire incorporation package. 

• Boutique Firms/Mid-Sized

Hailing the largest market share, this includes established firms having a proper accounting system, website, and dedicated team made up of 10-15 English-speaking employees. As per our findings, mid-sized companies focus more on B2B rather than B2C services, choosing to closely work with hubs like accelerators, incubators, and other institutional partners.that provide them with interested companies or startups in bulk deals. 

Most players in this category as well as the next do not stop at incorporation, with certain plans including provision of coworking spaces, post-setup services (government relation management, payroll management, filing of taxes), etc. This category of setups partners are process-driven and well organised, with proper systems in place. 

One downside to boutique firms is that they don’t typically offer specialised licensing services which is a requirement for certain business sectors. There is also a lack of automation in procedures, with most companies choosing to be more paper-based instead. Unlike MNCs which boast institutional level connections with the government, boutique firms do not typically have such a strong network, which can be less advantageous for certain situations. 

Although you may be able to secure a good deal at the SAR45,000 mark (inclusive of hard costs), for the most part boutique firms charge between SAR55,000-70,000 for complete Saudi landing. 

“Most boutique firms charge between 55,000-70,000 SR for complete Saudi landing”

• MNC (Multinational Companies)

Multinational setup partners are large entities that are based in multiple countries around the world, with a deep understanding of global laws and regulations. This is the most expensive category consisting of brand name service providers which typically cater to a select group of high profile clients. You can identify an MNC by their multiple publications, large social media followings, high customer acquisition costs, and government connections. 

Businesses dealing with sensitive sectors where large-scale projects are concerned typically frequent such setup partners. Both boutique firms and MNCs also have a full range of partnerships with other firms, giving you access to top accountants, auditors, consultants, etc.

In addition to Saudi landing, MNCs also offer a plethora of value-add services including specialised licenses, government procurement advisory, business development, culture enrichment, etc. Their smooth processes will have you expecting no surprises with all matters being handled without any bumps. However, due to their large staff sizes and scale, there is often slow delivery of services from this tier of companies;

Despite making up only a small portion of the overall market, MNCs close some of the largest deals for Saudi landing services due to their sky high price tags. At the lowest end, an MNC wil cost somewhere in the 100,000-150,000 SR range. At the highest, it can even reach 300,000 SR!

Parameters to Consider 

Most setup partners, especially typical corporate service providers (CSPs) have a one-size-fits-all pricing strategy. Law firms, on the other hand, typically propose customised price structures, emphasizing more on customizing legal documents to the needs of the client. 

The following are a few parameters that have significant impacts on the soft cost of landing:

• Company Shareholder Structure:

Incorporation costs may differ depending on shareholder complexity; having only individual shareholders could lead to lower expenses compared to dealing with complex enterprises with institutional investors. 

• Customised vs Standard Corp. Documents:

Standard corporate documents (Articles of Association) can now be constructed digitally via the Saudi Business Center, potentially reducing legal costs. However, established companies may still require lawyer review for customisation purposes providing better accuracy and compliance.

• Industry Focused Licenses 

There are several different types of businesses in Saudi, with each having their own set of requirements. The type of business significantly impacts costs; for instance, incorporating a factory industry license differs greatly from establishing a consulting company service license, a retail firm trade license, or a real estate developer real estate license, etc.

Thanks to the Ministry of Investment and its entrepreneurial track/license, tech entrepreneurs benefit from the fastest incorporation process with lenient requirements. We'll delve into the entrepreneurial license in detail in the future.

• Fast-Track:

Some service providers offer a fast-track option, aiming to streamline the process and reduce the timeline from the traditional 4-5 months to just 2 months This also includes expediting the requirement for Saudi visits to 1 or 2 working days to complete all necessary steps on ground. While the fast track incurs additional costs, it appeals to certain segments for its efficiency and convenience.

Final Thoughts

After going through all of the above, you may be wondering: Do I need a setup partner for the process, or can I manage it independently? Additionally, after understanding the hard costs, the operational expenses in Saudi Arabia remain a crucial consideration. Our next articles will delve into both the OpEx costs of operating in Saudi as well as the pros and cons of DIY incorporation, offering insights into potential challenges and regulatory risks considerations.

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.