The simplified joint stock company (SJSC, شركة مساهمة مبسطة) was created by the 2022 Companies Law. One or more shareholders can form it, with no minimum capital. This guide covers who it suits, how it is run, how it differs from an LLC and a standard joint stock company, how a foreign investor sets one up, and the fees the Ministry of Commerce publishes.
The SJSC is governed by Part 5 of the Companies Law (Royal Decree M/132 of 1/12/1443 AH, 30 June 2022), Articles 138 to 155. The law has been in force since 19 January 2023. Shareholders are liable only up to the value of the shares they subscribed.
Think of it as a joint stock company with the flexibility of an LLC. Shareholders set the company's structure and procedures in the articles of association, hold the powers of the ordinary and extraordinary general assemblies, and may hand those powers to a designated person (Article 138).
That is why it is the form start-ups and investor-backed projects look at first: shares change hands through the shareholder register, not the commercial register. The full set-up route for any company is in our guide to company formation in Saudi Arabia.
Typical use cases, not legal rules. The right choice depends on your activity, your shareholders and how you plan to fund the company.
Funding
The law allows ordinary, preferred and redeemable shares (Article 108), plus lock-up and compulsory transfer clauses in the articles (Articles 151 and 152). These are the tools investors usually ask for before they come in.
Article 150
One person can form an SJSC and is liable only up to the capital they put in. They hold all shareholder powers alone; their decisions are written and kept in a register at the company.
Articles 145 to 149
The articles set quorums and list the matters that need unanimity. Written resolutions and remote meetings are allowed, which suits shareholders in different cities or countries.
Article 216
A holding company can take the SJSC form and own shares or interests in subsidiaries. Groups use it when they want a flexible structure above several operating companies.
The three forms compared under the Companies Law and Ministry of Commerce fees. Fees exclude 15% VAT.
Table 1
| Point | Simplified JSC | LLC | Joint stock company |
|---|---|---|---|
| Founders | One or more, individual or corporate | One or more, no upper limit (Article 156) | One or more (Article 58) |
| Minimum capital | None (Article 139) | None, set by the articles (Article 174) | SAR 500,000, at least a quarter paid up at incorporation (Article 59) |
| Capital split into | Tradable shares; authorised capital allowed | Equal, non-tradable interests | Tradable shares |
| Share classes | Ordinary, preferred, redeemable (Article 108) | Interests only | Ordinary, preferred, redeemable (Article 108) |
| Transfer of ownership | Entry in the shareholder register (Article 25) | Entry in the commercial register (Article 25) | Shareholder register, or Capital Market Law if listed |
| Management | President, manager, board or any other form (Article 142) | One or more managers, or a board of managers | Board of at least 3 individuals, term of 4 years at most (Articles 67 and 68) |
| Shareholder decisions | Quorum set by the articles; written resolutions allowed | More than half the capital; three quarters to amend the articles | General assemblies with statutory quorums |
| Transfer restrictions | Lock-up of up to 10 years, or approval clause (Article 151) | 30-day pre-emption right for partners (Article 178) | Allowed, but no permanent ban (Article 111) |
| Public offering | Public subscription rules at incorporation excluded (Article 63) | Not possible | Possible under the Capital Market Law |
| Incorporation fee (Ministry of Commerce) | SAR 1,600 + 500 publication | SAR 1,200 + 500 publication | SAR 1,600 + 500 publication |
| Annual CR confirmation | SAR 1,600 | SAR 1,200 | SAR 1,600 |
| Best for | Start-ups, funding rounds, holding companies | Services or trading between partners who know each other | Large projects or companies heading for listing |
The law leaves most governance rules to the founders but keeps a few mandatory provisions.
Article 142
The articles set how the company is managed and how the president, manager or board members are appointed, removed and empowered. Whoever leads the company represents it in court and with third parties. The company is bound by their acts even beyond their powers, except towards parties acting in bad faith.
Articles 143 and 144
The liability rules for joint stock company boards apply to whoever manages the SJSC. So does Article 72 on loans to directors.
Article 145
Only shareholders decide on capital increases or reductions, conversion, merger, division or dissolution, appointing the auditor, the financial statements, dividends and amendments to the articles.
Article 146
Notice goes out at least 5 days before the meeting. Shareholders holding 10% of voting shares can request one, and meetings may be held remotely.
Articles 147 and 19
Management prepares the financial statements and an activity report and presents them within 6 months of year end. Some small companies are exempt from an auditor, but not foreign companies or those issuing preferred or redeemable shares. With foreign capital, plan for an auditor unless told otherwise.
Article 148
Shareholder deliberations and decisions go into a dedicated register, which may be kept electronically. Decisions the regulations require to be filed are registered with the commercial register within 15 days.
Article 140 lists the content of the articles and the documents filed with the application; the Ministry of Commerce adds founder conditions. Everything is entered on the Saudi Business Center, and the articles are issued in Arabic (Article 7).
The usual route for a company wholly or partly owned by a foreign investor. Durations are estimates, except the published service times. Saudi founders go straight to the Ministry of Commerce SJSC service, which is immediate.
Decide between an SJSC and an LLC, then set share classes, quorums, the management structure and the clauses that will need unanimity.
Parent company registration and financial statements, or ID documents for an individual, then apostille or legalisation and certified Arabic translation. Full list in our document checklist.
Obtain the investment registration certificate after paying the fee MISA sets on approval. Advisers report anything from zero to about SAR 62,000 a year depending on the activity; confirm when you file.
Trade name reservation (SAR 200 for an Arabic name, SAR 500 for a foreign-language name), then a bank certificate for the paid-up capital, a mandatory attachment (Article 140).
Pay SAR 1,600 for the registration and SAR 500 for publication, plus VAT. The CR also opens files with the Ministry of Human Resources, ZATCA (Zakat, Tax and Customs Authority) and GOSI (social insurance), and subscribes the company to the national address and chamber of commerce.
Open Qiwa and Muqeem accounts for visas, register for VAT once the threshold is reached, then confirm the CR every year (SAR 1,600) and renew the MISA registration annually.
A company formed by one or more individuals or legal entities, with capital divided into tradable shares. It was introduced by the Companies Law in force since 19 January 2023 and follows joint stock company rules except where Part 5 (Articles 138 to 155) provides otherwise.
A joint stock company needs at least SAR 500,000 of capital, a board of at least three members and general assemblies run by statutory rules. An SJSC has no minimum capital, and its founders choose the management structure and quorums in the articles. The public subscription rules at incorporation do not apply to it.
LLC capital is made of non-tradable interests, transferred by entry in the commercial register. SJSC capital is made of shares, transferred by entry in the shareholder register, and can include share classes. The SJSC costs more: SAR 1,600 to incorporate against SAR 1,200.
There is no statutory minimum: Article 139 excludes the SJSC from the SAR 500,000 joint stock company floor. The application still needs a bank certificate for the paid-up amount, and MISA and the banks expect capital in line with the activity.
SAR 1,600 for the commercial registration and SAR 500 for publication at the Ministry of Commerce, plus 15% VAT, about SAR 2,415, plus the trade name fee. The annual CR confirmation is SAR 1,600. Foreign investors also pay the MISA fee, set on approval.
Yes. The sole shareholder is liable only up to the capital they allocated and holds all shareholder powers. Their decisions are written and recorded in a register kept at the company (Article 150).
Yes, in activities open to full foreign ownership, after registering with MISA. The Ministry of Commerce service for companies under an investment licence covers the SJSC and is completed within 72 hours.
Yes, by a decision taken under the rules for amending the articles, with the approval of every partner (Article 220). The company must then meet the SJSC incorporation, registration and publication requirements.
Information verified in October 2026. Amounts and timelines are observed ranges provided for information only. Government fees are set by Saudi authorities and may change: they are confirmed in writing in the quote before you commit to anything.
Tell us how many shareholders you have, how you plan to raise money and what you will do, and we will suggest the form and the key clauses before filing. We scope your project and coordinate its delivery with licensed professionals in Riyadh. A free 30-minute first call, then a written fixed-price quote.