Company Setup in Saudi Arabia for Pakistanis

Pakistan acceded to the Hague Apostille Convention in July 2022, and the Convention entered into force for Pakistan on 9 March 2023. From that date Pakistani authorities began accepting foreign apostilles. Issuing them took longer: Pakistan's Ministry of Foreign Affairs began issuing apostilles on 17 May 2024. Saudi Arabia's own accession took effect on 7 December 2022, and Saudi Arabia appears on MOFA's list of countries that accept the apostille.

The competent authority is MOFA, at its headquarters in Islamabad and its liaison offices in Karachi, Lahore, Quetta, Peshawar and Gujrat. Apostilles issued in Pakistan carry a QR code for verification. One caution on the Saudi side: MISA's Investor Guide still describes the foreign company's registration and financial statements as certified by the Saudi embassy. We confirm with each receiving authority which form it accepts before you book a MOFA appointment, so no document is processed twice.

MOFA's attestation checklist sets specific conditions for commercial documents, and a document that does not meet them is not processed. The conditions that matter for a Saudi company file are below. Meet them before the appointment, because the Saudi side cannot start until the file is complete.

MISA's Investor Guide asks a foreign company for its commercial registration and its financial statements for the last fiscal year. For a Pakistani private limited company, those are the SECP incorporation documents and audited accounts, which is why most Pakistani businesses register with the company as shareholder.

For individuals, MISA's FAQ names Premium Residency holders as the eligible category, and they are exempt from the registration and financial statements requirement. MISA's entrepreneur category is a second route for founders backed by a Saudi university or accredited incubator.

If you live in the Kingdom and plan to start your own company, the company has to be registered in your own name through MISA. An arrangement where a Saudi national's name or commercial registration fronts a business you run is commercial concealment under the Anti-Commercial Concealment Law. The Ministry of Commerce inspects for it nationally, and the penalties include imprisonment, fines and deportation of the non-Saudis involved.

Your employment and residency are part of the plan. MISA's entrepreneur category asks an applicant who is resident and employed in the Kingdom for a no-objection letter from the employer. We work through this with you at the first consultation.

Chapter 20 of the State Bank of Pakistan's Foreign Exchange Manual allows residents of Pakistan, including companies, to make equity investments abroad on a repatriable basis. The basic conditions: the destination country must allow repatriation of profits, dividends and capital, the funds must be legitimate and tax-paid, and the investor must be financially sound, with a clean loan repayment record and a place on the active taxpayer list. Authorized dealer banks process the transactions under category-specific rules, and IT-sector companies have a general permission route for setting up subsidiaries abroad.

Saudi Arabia and Pakistan have a convention for the avoidance of double taxation, signed and in force since 2006. On the Saudi side, corporate income tax is 20% on the foreign-held share of profit, VAT is 15% above SAR 375,000 in annual taxable supplies, and withholding tax of 5 to 20% applies to certain payments to non-residents. Take advice in Pakistan on how this applies to you.

Alpha is based at Salama Tower in Jeddah, and our team speaks Urdu, English, Arabic, Hindi and French, so you can work through the MOFA checklist and the MISA file in Urdu. We file formation and government transactions on the official online platforms on your behalf, with your authorization, so we can register your company in any Saudi city.

We are a formation consultancy, not a law firm. Reach us by phone, WhatsApp or email, Sunday to Thursday, 9:00 to 18:00 KSA time.