Saudi Business Center

Conversion from Sole Proprietorship to Company

The conversion from a sole proprietorship to a company in the Saudi market represents a significant milestone for any business seeking expansion, attracting partners, or reducing the personal risks borne by the owner. This service is carried out entirely online without the need to visit government offices, ensuring a smooth transfer of all data and obligations from the proprietorship to the new entity.

The process begins by logging into the platform, selecting the service of converting from a proprietorship to a company, specifying the number of partners and the new company type (such as Limited Liability Company, Joint Stock Company, or Simple Company), then filling in all partner details, defining share percentages, and clarifying the nature of the chosen activity.

Basic requirements of the service include:

The commercial registration must be valid, not canceled or suspended.


The applicant or partner must be at least 18 years old and not employed in the public sector.


In the case of foreign partners, a valid statutory investment license issued by the Ministry of Investment is required.


Full compliance with any sector-specific licenses required by the Central Bank or other competent authorities, depending on the company’s activity.


Importance of the Conversion from Sole Proprietorship to Company

Grants the entity an independent legal personality, separating financial liability from the owner’s personal assets.


Facilitates attracting new partners or investors while organizing shareholding and responsibilities.


Reduces the personal risks of the proprietor by transferring financial obligations to the company alone.


Expands opportunities to participate in government tenders, contracts, and strategic partnerships.


Enhances the market value and attractiveness of the business in the eyes of clients and financiers.


Enables the adoption of a structured governance model and flexible legal framework that supports future growth.


Challenges of the Conversion from Sole Proprietorship to Company

Accuracy and completeness of the required data: all information from the old and new registrations must match, with documented transfers aligned to regulations.


Settlement of all financial obligations, fees, and fines prior to conversion, along with tax and zakat clearance.


Difficulty in selecting the appropriate company type and structure, particularly for businesses with diverse activities or long-term contracts.


Additional approvals may be required for certain activities or in cases involving foreign partners, with mandatory translation and certification of legal documents.


Processing delays may occur if there are data inconsistencies, conflicts, or unresolved obligations associated with the registration.


A thorough understanding of the legal and financial implications of transferring assets, contracts, and obligations from the proprietorship to the new company is essential.
Target Sector Trader
Affiliated Authority Saudi Business Center
Estimated Duration1 day
Gov Approval Window1 working day
Service Pricing2488
Government Fee1700

Mandatory Conditions

  • ✓ In the event that one of the partners is a juridical party, the commercial registration must neither be written off or suspended.
  • ✓ The age must not be less than 18 years, and if the applicant is a minor under the age of puberty, a guardianship instrument must be submitted if the guardian is not the father.
  • ✓ The applicant must not hold a government position.
  • ✓ A legal document must be present if one of the partners is a government entity, granting them the right to incorporate or participate in a company.
  • ✓ A license or initial approval from the Saudi Central Bank must be obtained if the nature of the business activity so requires.
  • ✓ A waiver from the owner of the establishment must be provided if they are not a partner in the company.
  • ✓ The applicant must be the owner of the establishment or electronically authorised on their behalf.
  • ✓ The following must be verified in case the type of the company is (Professional): The partners must hold a valid professional license. The percentage of the licensed Saudi partner in the mixed company must not be less than 25%. The percentage of licensed partners must not be less than 70%.
  • ✓ Government Fees: - SAR 1,600 for a Joint Stock Company or a Simplified Joint Stock Company. - SAR 1,200 for a Limited Liability Company (LLC). - SAR 1,000 for a General Partnership or a Limited Partnership. - SAR 500 for publication fees.

Required Documents

  • ✓ National Address.
  • ✓ Authenticated opening and purchasing letter.
  • ✓ The national identity of the establishment owner.
  • ✓ Identities of the company’s Saudi and resident partners and managers
  • ✓ Submission of draft articles of association; If the conversion is to a joint stock/simplified company entity.
  • ✓ Submission of a bank certificate if the share is in cash, or an approved evaluator’s report if the share is in kind; In the event of converting to a joint stock company.