How to Set Up a Software or Tech Development Company in Saudi Arabia

Saudi Arabia’s push to diversify its economy has put serious weight behind sectors with long-term global value. Technology, including software development, cloud services and digital infrastructure, is one of the main targets. Backed by state funding, legal reform and large-scale national projects, the Kingdom is opening up to international tech companies in a way it never has before. If you’re looking to enter the market, this article sets out how to establish a software or tech development company in Saudi Arabia, what the process involves and what to get right early on.

What counts as a tech company in Saudi Arabia

The tech sector in Saudi includes a broad mix of digital and software-based businesses, including:

• Custom software and mobile app development
• SaaS platforms and digital marketplaces
• Cloud infrastructure and data services
• Cybersecurity providers
• AI, analytics and IoT-focused solutions

These are typically licensed under activity categories such as “computer programming,” “IT consultancy,” or “information technology services.” The key point is that if your business involves building, supporting or securing software or digital systems, it will fall under one of these regulated activities.

Licensing and company setup

Setting up a tech company as a foreign investor starts with the Ministry of Investment (MISA). This is where you apply for a foreign investment licence. Most software and IT-related businesses fall under “computer programming” or “IT consultancy” activities. Once granted, this licence allows full foreign ownership and is the entry point to company formation.

Next comes commercial registration with the Ministry of Commerce which includes reserving your company name and issuing the national commercial registration (CR). Your MISA licence and CR are linked, so you’ll need to complete both in sequence.

If your business is expected to generate more than SAR 375,000 in annual revenue, you must register with ZATCA for VAT. You’ll also need to apply for a municipality licence in the city where you’ll be operating.

To legally employ staff, you’ll need to open files with GOSI (for social insurance) and set up your company in the Nitaqat system, which tracks Saudisation compliance. These steps are mandatory even if you’re starting with a small team.

Most foreign-owned companies begin with a declared capital of SAR 500,000, unless a specific activity or authority requires more. Some sectors carry higher capital rules, but for general software, tech development or IT services, this amount is typically accepted.

While the process involves several authorities, it’s now more coordinated than before and most filings can be handled through legal or corporate service providers.

Getting operational: office, hiring and compliance

Once your licence is issued, you’ll need a physical office lease to complete setup. Virtual offices aren’t accepted for tech businesses, and the lease must be in place before you apply for the municipality licence.

Commercial registration triggers the need for Chamber of Commerce membership, which is handled at the same stage. If you plan to hire, register with GOSI before onboarding staff. Saudization also applies from the start. Minimum Saudi hiring targets depend on your company size, but even one-person operations are expected to comply under the Nitaqat system.

Hosting, IP and compliance

There are a few regulatory details to pin down once your business is operational. If you handle user data, especially in sectors like finance or government, check whether data needs to be hosted locally. This comes under CST rules and applies more tightly to certified cloud providers.

Software IP can be registered with the Saudi Authority for Intellectual Property. It’s not mandatory, but worth doing if you’ve built proprietary code or platforms.

There’s no blanket rule requiring Arabic language support unless your clients include government agencies. That said, localisation matters. Saudi users expect interfaces and content that reflect regional usage, even if the product is built on global architecture. Planning for this from the start, along with the right setup and compliance structure, will save time, reduce risk and keep your business running without interruption.

After setup: banking, admin and local hurdles

Once your company is fully registered, you’ll need to open a corporate bank account. This can take time, especially for foreign-owned businesses. Banks will ask for the full set of company documents in Arabic, along with details on ownership and signing authority. Processing can take a few weeks, so plan accordingly.

You’ll also need to stay on top of licence renewals and ZATCA reporting if registered for VAT. Some of this is automated, but errors in translation or document formatting still cause delays. The municipality stage is another common bottleneck, especially if your office lease isn’t properly registered or linked. Delays in Arabic documentation, last-minute approval requests, or unclear KYC steps can all slow things down if not planned for.

Planning for this from the outset, including the right setup and compliance structure, will save time, reduce risk and help you stay operational without disruption.