Your Guide to Setting Up a Free Zone Company in Saudi Arabia

What Is a Free Zone Company (FZCO)?

A Free Zone Company is a legal entity established within a designated economic zone that caters to specific industries—such as logistics, petrochemicals, technology, and manufacturing.

FZCOs in Saudi free zones permit up to 50 shareholders (individuals or corporations), all holding 100 percent foreign ownership with no local partner requirement.

Advantages of Forming an FZCO in Saudi Arabia

• 100 percent foreign ownership without a Saudi sponsor

• Full repatriation of capital and profits

• Exemption from customs duties on intra-zone trade and re-exports

• Zero corporate tax under free-zone regulations; 5 percent VAT may apply only outside zone transactions

• Simplified labor and visa processes within zone authorities

• Access to integrated logistics, utilities, and ready-built facilities

Selecting the Right Free Zone

Choosing the ideal zone depends on your industry, logistics needs, and growth plans. Top options include:

• King Abdullah Economic City (KAEC) for logistics, light manufacturing, and e-commerce

• King Salman Energy Park (SPARK) for energy, petrochemicals, and heavy industries

• Jazan Economic City for mining, agri-processing, and port services

• Prince Abdulaziz Bin Mousaed Economic City (PABMEC) for food processing and automotive components

• Cloud Computing Special Economic Zone (KACST-SEZ) for ICT, R&D, and cloud services

Evaluate each zone’s approved activities, fee structures, and proximity to ports or airports before deciding.

How to Register Your FZCO in Saudi Arabia

1. Define your business activities and select the matching free zone.

2. Submit an application to the free-zone authority with:

   • Passport copies of shareholders and directors

   • Memorandum and Articles of Association (AOA/MOA)

   • Business plan outlining objectives and financial projections

3. Obtain a Foreign Investment License from the Ministry of Investment (MISA).

4. Reserve your trade name and apply for Commercial Registration (CR) via the Ministry of Commerce portal.

5. Sign your office-lease agreement and pay registration and licensing fees.

6. Receive your CR certificate and free-zone business license.

7. Open a corporate bank account and deposit the required share capital.

8. Apply for residency visas, work permits, and family visas through the zone’s immigration services.

Cost Considerations

Additional expenses may include translation/legalization of documents, medical exams, and utilities deposits.

Regulatory Compliance and Taxation

Free Zone Companies benefit from 0 percent corporate tax and customs duty exemptions on qualifying transactions.

Annual license renewals, audited financial statements, and VAT filings (at 5 percent for out-of-zone supplies) may be required to maintain good standing.

How Launch Saudi Can Support You

With over 15 years of regional experience and 75,000+ company launches, Launch Saudi provides:

• Free-Zone selection and legal-structure advisory

• End-to-end licensing, MISA, and MoC applications

• Bank-account facilitation and tech integrations

• Visa and Iqama processing

• PRO services, compliance monitoring, and renewals

Let us handle the complexities so you can focus on growing your Saudi business.