Alpha Consultancy

Report · Q2 2026 · October 2026

State of Company Formation in Saudi Arabia: Q2 2026

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The quarter in brief

Saudi Arabia ended June 2026 with 1.91 million active commercial registrations. New formation cooled from a record second half of 2025, Makkah and Najran gained ground on Riyadh, and nearly half of all companies are now single-person entities. An analysis of the Ministry of Commerce's open register.

01/

1,912,733 commercial registrations were active on 30 June 2026: 1,278,333 sole proprietorships, 630,356 companies and 4,044 branches of GCC and foreign companies.

02/

67,329 registrations created in Q2 2026 were still active at quarter end. The Ministry reported just over 71,000 issued in the quarter — down from more than 80,000 in Q2 2025, and roughly half the pace of the second half of 2025.

03/

The Makkah region took 22.8% of new registrations against a 20.7% share of all active ones; Riyadh took 32.8% against 34.7%.

04/

Najran gained more ground than any other region: 4.8% of new registrations from a 3.1% share of the stock.

05/

47.5% of active companies are single-person entities, and companies made up 33.2% of new registrations — the same share they hold of the register.

06/

Half of all companies report paid-up capital under SAR 10,000; 6.2% report SAR 5 million or more.

67,329

registrations created in Q2 2026 were still active on 30 June — about 740 new businesses every day.

Down from the record pace of late 2025, but still one new commercial registration roughly every two minutes.

The top three cities

Three cities, nearly half the register

Keep scrolling — we'll fly you in.

Leaderboards

The cities to watch, among the 23 with more than 10,000 active registrations

Most company-heavy

Companies as a share of each city's registrations

  1. 01Jubail70.5%
  2. 02Riyadh51.8%
  3. 03Unaizah48.0%
  4. 04Najran46.3%
  5. 05Khobar40.8%

Most foreign & GCC branches

Active branches of foreign and GCC companies

  1. 01Riyadh2,667
  2. 02Jeddah574
  3. 03Khobar353
  4. 04Dammam192
  5. 05Makkah46
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Active registrationsColumn height: active commercial registrations

01/

A register of 1.9 million — growing more slowly

1,912,733

active commercial registrations on 30 June 2026

On 30 June 2026 the Ministry of Commerce's register held 1,912,733 active commercial registrations. Two-thirds (1,278,333) are sole proprietorships — 'establishments' registered directly to an individual — and 630,356 are companies. Branches of GCC and foreign companies add 4,044. About 17% of all registrations are branch CRs attached to a main registration.

The register is still growing, but new issuance has slowed. The Ministry's quarterly bulletins counted more than 128,000 new registrations in Q3 2025 and 123,000 in Q4 2025, then just over 71,000 in Q2 2026, against more than 80,000 a year earlier. The register itself tells the same story: 236,976 registrations created in the second half of 2025 were still active in June 2026, compared with 133,986 created in the first half of 2026.

The chart counts registrations by the quarter they were created. Registrations cancelled since then are not in the source file, so earlier quarters read lower than what was originally issued — about 95% of Q2 2026 registrations and roughly 70% of those issued in 2024 were still active at the end of June.

New commercial registrations by quarter of creation

Still-active CRs, Saudi Arabia. Cancelled registrations are excluded, so earlier quarters read lower.

02/

Where new businesses are forming

22.8%

of new registrations went to the Makkah region, against 20.7% of the stock

Riyadh remains the largest region by a wide margin, with 663,253 active registrations and 22,099 new ones in the quarter. But its share of new formation (32.8%) is below its share of the register (34.7%), and the Eastern Province shows the same gap (14.1% against 15.8%).

The Makkah region is where new formation is concentrating. It took 22.8% of the quarter's new registrations against 20.7% of the stock. Makkah city alone added 5,484 registrations — 8.1% of the national total from a city that holds 5.1% of active registrations. Measured against its existing base, that is the fastest formation of any major city: new registrations equal to 5.6% of its stock in a single quarter, against 3.5% nationally.

Najran is the quarter's outlier. The region holds 3.1% of active registrations but took 4.8% of new ones, and it has an unusually high share of companies for its size: 24,811 LLCs, close to the 28,297 in Qassim, a region with well over twice the population. The open data does not say why; it is a pattern worth watching rather than explaining.

Share of new registrations vs share of all registrations

A positive gap means the region is gaining weight in new business formation

RegionAll CRsNew CRsGap
Makkah20.7%22.8%+2.1 pts
Najran3.1%4.8%+1.6 pts
Madinah4.9%5.2%+0.3 pts
Asir5%5.2%+0.2 pts
Hail2.3%2.5%+0.1 pts
Jazan3.3%3.3%+0.1 pts
Northern Borders0.9%0.9%+0.0 pts
Qassim5.3%5.2%-0.1 pts
Al Baha0.7%0.5%-0.2 pts
Tabuk2.2%1.9%-0.3 pts
Al Jouf1.1%0.8%-0.4 pts
Eastern Province15.8%14.1%-1.6 pts
Riyadh34.7%32.8%-1.9 pts

03/

How founders are structuring

47.5%

of active companies are single-person entities

Two in three new registrations are still sole proprietorships (44,943 in the quarter). Companies made up 33.2% of new registrations, the same share they hold of the register, so the long-run shift from establishments to companies is not accelerating in the data. The mix varies sharply by city: 71% of registrations in Jubail are companies and 52% in Riyadh, against about one in nine in Jazan city.

Within companies, the limited liability company is close to universal: 608,579 of 630,356 active companies are LLCs, and 22,207 of the quarter's 22,344 new companies. Nearly half of all companies (47.5%) are single-person entities, and 5.6% are holding companies.

The simplified joint stock company, introduced by the 2023 Companies Law for venture-backed businesses, remains niche: 2,164 are active and 89 were created in Q2 2026 — still more than four times the number of new traditional joint stock companies (19). More than half of all SJSCs (1,165) are registered in Riyadh city.

New registrations by legal form

Created in the quarter, still active at quarter end

  1. Sole proprietorship44,94366.8%
  2. LLC22,20733%
  3. SJSC890.1%
  4. Foreign branch340.1%
  5. General partnership24<0.1%
  6. JSC19<0.1%
  7. GCC branch8<0.1%
  8. Limited partnership5<0.1%

04/

Capital: small by default, with regional exceptions

51.3%

of companies report paid-up capital under SAR 10,000

Most Saudi companies are registered with very little paid-up capital. The median across 543,981 companies with a main registration is SAR 5,000; 51.3% report under SAR 10,000. At the other end, 7.3% report SAR 500,000–5 million and 6.2% report SAR 5 million or more.

The median varies sharply by region. In Riyadh and the Eastern Province it is SAR 5,000; in the Makkah region it is SAR 100,000, driven by Jeddah, where the median company reports SAR 100,000 of capital. Madinah (SAR 40,000) and Jazan (SAR 50,000) also sit well above the national figure.

05/

What this means for foreign investors

4,044

active branches of foreign and GCC companies

The open register does not record shareholder nationality, so foreign-owned LLCs cannot be separated from Saudi-owned ones. What it does show is the branch route: 3,497 branches of foreign companies and 547 branches of GCC companies were active at the end of June, and 42 new ones were registered in the quarter. Two-thirds of them (2,667) are in Riyadh city, and 574 in Jeddah.

For most foreign investors the practical choice is between a single-person or multi-shareholder LLC and an SJSC for venture-backed businesses, with a branch where the parent needs to operate under its own identity. Riyadh remains the default for government-facing and regional headquarters activity, while the Makkah region — Jeddah and Makkah city in particular — is where new formation is currently growing fastest.

Source & method

Figures are Alpha Consultancy's analysis of the Ministry of Commerce's open datasets on the Saudi Open Data Platform (open.data.gov.sa): the register of active commercial registrations (CRs) as of 30 June 2026.

Active CRsinclude main and branch registrations, as in the Ministry's own totals. Registered in a period counts CRs created in that period that were still active on 30 June 2026; registrations since cancelled are not in the source file, so older periods read lower than the number originally issued.

The Ministry's extract is dated 30 June 2026; it was taken at the start of that day, so registrations created on the reference date itself are not included.

No individual business is identified on these pages; only aggregate counts are published.

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