Setting up a foreign company in Saudi Arabia is one of the important procedures to complete the economic revolution. The great investment expansion requires international investors that seek to start their journey in Saudi as we are going to explain in the following.
The Regulations of Setting Up Foreign Company in Saudi Arabia
Establishing a foreign company in Saudi Arabia is governed by a legislative and regulatory framework. Also, it is designed to balance investment promotion with protection of the national economy. Procedures have been unified and simplified through official digital platforms, ensuring transparency and efficiency.
The Saudi system allows foreign investors to establish wholly owned companies across a wide range of activities. This includes exceptions for certain sectors specified by the relevant authorities. It also enables investors to choose the appropriate legal structure for their business, including limited liability or joint stock companies.
Also read about: Foreign Investment in Saudi Real Estate.
Steps to Set Up Foreign Company in Saudi Arabia
Setting up a foreign company in Saudi Arabia needs to follow certain steps to stay in the legal framework, here the steps:
Obtaining the Investing License
This license is obtained by applying through the Ministry of Investment’s online portal. This application includes an electronic form accompanied by the parent company’s commercial registration certified by the Saudi embassy. Also, the partner’s resolutions and the director’s passport, as well as audited financial statements for the most recent year.
The Ministry reviews the application within a maximum of 30 days and activities in restricted sectors are not permitted.
Company Registration with the Ministry of Commerce
The next step is to access the Saudi Business Center platform to select the service “Establish a Company under an Investment Certificate”.
On the platform, the company’s activities, partners and headquarters are specified, after which the articles of incorporation are notarized electronically and the commercial registration is issued.
It is worth mentioning that the fees include 1,200 SAR for a limited company, plus 500 SAR for publication. In addition to a 15% value added tax.
Providing Capital and Opening a Bank Account
Establishing a foreign company requires a minimum capital 100,000 SAr for sole proprietorships or general partnerships.
For other companies, the minimum rises to 500,000 SAR and for industrial companies it reaches SAR 5 million. This capital must be deposited in a Saudi bank account prior to registration.
Financial capacity is demonstrated through a three-year balance sheet and a business plan.
Obtaining Additional Licenses
Certain business activities require approvals from authorities such as the Saudi Central Bank or the Ministry of Human Resources and Social Development. Investors must also have a clean legal and financial record. Additionally, products must comply with Saudi standards and specifications.
Setting Up a Sole Proprietorship in Saudi Arabia
The Saudi regulatory framework allows foreign investors to establish a sole proprietorship in the Kingdom, provided that the chosen activity is permitted. A sole proprietorship is recognized as one of the legally approved business structures.
In this case, obtaining an investment license is required, followed by registering the sole proprietorship with the Ministry of Commerce under the investor’s name. On the other hand, the investor assumes full financial and legal responsibility for the business.
This option is particularly suitable for small to medium sized projects, especially in the service sectors. This ensures compliance with all regulatory requirements related to Zakat, taxes, and employment.
Also read about: Foreign Ownership Law (2026).
Requirements for Setting Up Foreign Company in Saudi Arabia
The requirements for establishing a foreign company include ensuring that:
- The business activity is not among the restricted sectors
- Maintaining a clean legal and financial record.
- Ensuring that the partners are not government employees or under 18 years old.
Also, an active commercial registration is required, along with the professional licenses if necessary. Regulatory authorities have outlined a set of conditions that must be met to establish a foreign company, the most notable of which is include:
- The business activity must comply with the sector permitted for foreign investment.
- Submission of the parent company’s financial statements, if applicable.
- Adherence to the minimum requirements for certain specified activities.
- Compliance with Saudi tax, labor and residency regulations.
The Advantages of Setting Up Foreign Company in Saudi Arabia
Establishing foreign company in the Kingdom offers several advantages, including:
- Full foreign ownership.
- Ease of profit repatriation.
- Access to Saudi Arabia’s strategic geographic location.
In addition, government authorities provide support packages and investment incentives across a range of promising sectors such as industry, technology, and logistics.
These advantages contribute to making the Saudi market an attractive destination for foreign investment, particularly in light of ongoing regulatory reforms and enhanced digital procedures.
Ultimately, setting up a foreign company in Saudi Arabia is one of the most eased strategies to enhance the national economy. Bayut Saudi presents to you all investment types in the Kingdom to discover them and dive into these fascinating opportunities.
