The Ultimate Saudi Arabia Business Compliance Guide for New Investors (2026)

Saudi Arabia has emerged as one of the world’s fastest-growing investment destinations. With Vision 2030 reforms, the Kingdom offers unmatched opportunities — but also a strict, digital-first compliance environment.

For new investors and foreign business owners, understanding Saudi laws, taxes, labour rules, and government portals is critical. This guide serves as a complete compliance handbook for businesses operating in Saudi Arabia, written in simple, practical language.

Saudi Arabia Business Compliance Overview

Saudi Arabia operates on a centralized digital compliance system. Almost every obligation — from tax filing to employee salaries — is monitored through government portals. Non-compliance can result in:

·      Financial penalties

·      Suspension of government services

·      Visa and work permit restrictions

·      Banking and operational blocks

Compliance is not a one-time task; it is an ongoing responsibility.

Post-Incorporation Registrations Every Business Must Complete

Commercial Registration (CR) – Ministry of Commerce

The Commercial Registration (CR) is the legal identity of your business in Saudi Arabia.

·      Issued by the Ministry of Commerce

·      Defines permitted business activities

·      Mandatory annual renewal

·      Activity mismatch may result in fines or suspension

Chamber of Commerce Membership

All companies must register with the Chamber of Commerce.

Required for: - Visa and immigration services - Government correspondence - Bank documentation and tenders

Renewal is annual and linked to the CR.

Municipality (Baladiya) License

Confirms: - Office location - Commercial activity - Compliance with zoning rules

Fees depend on city, office size, and activity.

Tax Compliance in Saudi Arabia (ZATCA)

All taxation in Saudi Arabia is managed through the Zakat, Tax and Customs Authority (ZATCA).

Corporate Income Tax

·      Applicable to foreign-owned companies

·      Tax rate: 20% on net taxable profits

Zakat

·      Applicable to Saudi/GCC ownership

·      Rate: approximately 2.5%

·      Calculated on the Zakat base, not accounting profit

Value Added Tax (VAT)

·      Standard VAT rate: 15%

·      Mandatory registration if annual revenue exceeds SAR 375,000

·      Optional registration from SAR 187,500

VAT Filing Requirements

·      Monthly or quarterly returns

·      Late filing penalties start from SAR 1,000

E-Invoicing (FATOORA)

All VAT-registered businesses must comply with Saudi e-invoicing rules:

·      QR code on invoices

·      Structured invoice data

·      Accounting system compatibility

Accounting & Audit Requirements in Saudi Arabia

All companies must maintain proper accounting records:

·      IFRS-compliant books of accounts

·      Supporting documents for all transactions

·      Organized digital and physical records

Audit Requirement

Audit is mandatory for: - Foreign-owned companies - Medium and large enterprises

Audit reports are required for tax filings, banks, and regulatory reviews.

Labour Law & HR Compliance in Saudi Arabia

Labour compliance is primarily managed through Qiwa, GOSI, Mudad, and Muqeem.

Qiwa Platform – Labour Management System

Qiwa is the central labour compliance portal used to:

·      Create and approve employment contracts

·      Monitor Saudization (Nitaqat)

·      Issue work permits

·      Process employee transfers

All employment contracts must be uploaded and approved through Qiwa.

Saudization (Nitaqat System)

Saudi companies must employ a minimum percentage of Saudi nationals.

Company classifications: - Platinum / Green: Compliant - Yellow / Red: Restricted

Low Saudization can result in visa suspension and labour restrictions.

GOSI Compliance – Social Insurance in Saudi Arabia

Registration with the General Organization for Social Insurance (GOSI) is mandatory.

GOSI Contribution Rates

Saudi Employees - Employer: 12% - Employee: 10% - Total: 22% of salary

Non-Saudi Employees - Employer: 2% (occupational hazard only)

GOSI contributions are paid monthly. Delays lead to penalties and service blocks.

Mudad – Wage Protection System (WPS)

Mudad ensures timely salary payments to employees.

Key Requirements

·      Salaries must be paid via bank transfer

·      Salary files must match Qiwa contracts

·      Monthly compliance is mandatory

Non-compliance may result in labour penalties and visa restrictions.

Muqeem & Absher – Visa and Residency Management

Muqeem Portal

Used by companies to: - Issue and renew Iqama - Manage exit/re-entry visas - Track employee residency status

Absher Platform

Used for individual and sponsor-level services: - Iqama services - Employee personal records - Government approvals

Public Holidays, Working Hours & Leave Rules

Official Public Holidays in Saudi Arabia

·      Eid Al-Fitr

·      Eid Al-Adha

·      Saudi National Day

·      Saudi Founding Day

Working Hours

·      Standard: 8 hours per day / 48 hours per week

·      Reduced working hours during Ramadan

Employee Leave Entitlements

·      Annual leave: Minimum 21 days

·      Sick leave: Up to 120 days

·      Maternity leave: 10 weeks

Government Fees & Annual Compliance Costs

Compliance Item	Frequency
Commercial Registration	Annual
Chamber Membership	Annual
Municipality License	Annual
VAT Filing	Monthly / Quarterly
GOSI	Monthly
Wage Protection (Mudad)	Monthly
Audit	Annual

Costs vary based on business activity, location, and company size.

Common Compliance Mistakes New Investors Make

·      Delayed portal registrations

·      No accounting system

·      Ignoring Saudization planning

·      Late VAT and GOSI filings

·      Incorrect employment contracts

These mistakes often result in avoidable penalties.

Final Thoughts for New Investors in Saudi Arabia

Saudi Arabia offers exceptional opportunities — but only to compliant businesses.

To succeed: - Register on all government portals immediately - Maintain accurate accounting records - Track deadlines proactively - Work with experienced local advisors

A compliant business is a scalable, credible, and bankable business.

DOCMEN supports businesses in Saudi Arabia with accounting, taxation, payroll, compliance management, and corporate advisory services — ensuring peace of mind for investors and entrepreneurs.