An investor targeting the region often chooses between Egypt and Saudi Arabia, and each country has a different incorporation authority, procedure and tax system. This article compares forming a company in the two countries on the points that drive the decision, relying on official sources where available.
Egypt and Saudi Arabia compared
| Item | Egypt | Saudi Arabia |
|---|---|---|
| Incorporation authority | General Authority for Investment and Free Zones and the commercial register | Saudi Business Center (Ministry of Commerce), with foreign investor registration at the Ministry of Investment |
| Company forms | LLC, joint stock, one-person company and foreign branch | LLC (formed by one or more persons), joint stock, and the simple joint stock company introduced by the new Companies Law |
| Minimum capital of an LLC | No general minimum | The official service page does not state a minimum |
| Official LLC formation fees | See Company Formation Fees in Egypt | 1,200 for the commercial register and 500 for publication, plus 15% VAT, according to the official service page |
| Foreign investor status | Full ownership is allowed in most activities, excluding regulated activities | Investor registration replaces the investment licence, and activities are open except those on the exclusion list |
| Value added tax | 14% standard rate, with schedules at different rates and exemptions | 15% |
| Tax on profits | 22.5% of the net profits of companies | Income tax applies to the non-Saudi partner’s share in resident companies, and the Saudi partner’s share is subject to zakat |
| Employment | Labour Law No. 14 of 2025; see how it differs from the old law | The Labour Law and the Nitaqat Saudization programme |
| Timeline | See Types of Companies in Egypt | Registration steps are online; the total time depends on the activity and licensing bodies |
When to choose Egypt, Saudi Arabia, or both
- Egypt: if your clients, production or main team are in Egypt, or you want a wholly owned Egyptian entity.
- Saudi Arabia: if your target market is Saudi, or your main clients are Saudi institutions that require dealing with a Saudi company.
- Both: if you run business in both markets, consider a company in each country with intercompany contracts and a plan for employment and tax. ItQan supports investors in Egypt and Saudi Arabia.
An important change: registration replaces the investment licence
According to the executive summary of the updated Investment Law issued by the Ministry of Investment, a simplified registration replaced the investment licence, and economic activities are open to foreign and local investors on equal terms except those on an exclusion list set by a ministerial committee. Investment in an excluded activity may be blocked for national security reasons.
Frequently asked questions
Can a foreigner form a wholly owned company in Saudi Arabia?
Yes, in activities that are not excluded under the updated Investment Law, with investor registration. Some activities may carry special requirements from the competent authority.
Do I still need a Ministry of Investment licence?
No. Under the updated law, a simplified investor registration replaced the investment licence.
What is the VAT rate in each country?
14% in Egypt as a standard rate with schedules and exemptions, and 15% in Saudi Arabia.
Can an LLC be formed in Saudi Arabia with one partner?
Yes. The official service page states that it can be formed by one or more persons.
Which is better, Egypt or Saudi Arabia?
It depends on the target market, the activity, employment and tax. Contact us for a comparison that fits your business.
Want a comparison that fits your business?
ItQan – Advocates & Legal Consultants helps investors form companies. See our company formation lawyer service in Egypt.
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