The Benefits of Setting Up a Foreign Company in Saudi Arabi

December 27, 2022 by Nina Medanić


Setting up a foreign company in Saudi Arabia offers many benefits, such as access to a large consumer market, tax incentives, and a young and rapidly growing population. However, it is also subject to complex laws and regulations. This overview will briefly introduce the legal and administrative framework of setting up a foreign company in Saudi Arabia.

Reasons to set up a foreign company in Saudi Arabia

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It has many attractive reasons to set up a foreign company, making it an attractive destination for global business expansion. The proximate access to the Middle East and North African markets, its robust oil reserves, and its ambitious Vision 2030 economic reforms are all attractive drivers that make this nation a prime choice for doing business.

Setting up a company in Saudi Arabia can provide access to abundant business opportunities within and outside Riyadh’s borders, so How To Set Up a Foreign Company in Saudi Arabia? From selling goods and services directly to consumers or applying the special skills of men and women employed by the business, there are many advantages associated with running a foreign enterprise in this emerging economy.

Saudi Arabia offers excellent tax incentives for foreign companies looking to shop. In 2024, Saudi Arabia abolished corporate income tax on non-oil industries (to encourage foreign investment) and personal income tax on certain white-collar jobs such as engineering technicians or accountants.

Other financial perks include 15 days customs declaration completion periods for imported goods and an integrated IT system supported by the Ministry of Commerce & Investment that allows firms to onboard new investors quickly & efficiently. Businesses also benefit from competitive energy prices – such as electricity – that incentivize firms developing energy-intensive operations to set up manufacturing operations in the country’s economic hubs like Jeddah & Dammam.

Finally, with no restrictions on capital transfers (such as repatriating profits back home), Foreign Direct Investment (FDI) can flow freely between different countries within the region, creating much-needed upward FDI spirals into local economies resulting in higher wages & fewer barriers to entry into other markets within GCC areas such as Qatar & Bahrain.

The benefits of setting up a foreign company in Saudi Arabia

Are an excellent business decision as it offers a range of advantages that make it easier for businesses to grow and succeed. Some key advantages include access to one of the largest markets in the Middle East, favorable investment climate, economic diversification, modern infrastructure, strategic geographic location, business-friendly regulatory framework, and diverse population.

The Saudi government encourages foreign investors to set up operations in the country and provides a range of incentives, such as reduced corporate tax rates and access to global markets. Saudi Arabia is also continuously reforming its regulations to make it easier for businesses to operate without restrictions or complexities.

The Kingdom also has world-class infrastructure that enables businesses to set up their operations quickly and smoothly. Additionally, Saudi Arabia has a strategic geographic location that allows businesses easy access to other GCC countries such as Bahrain, Qatar, and the United Arab Emirates (UAE). Furthermore, it has one of the most lucrative markets in the Middle East, which provides businesses with prime growth opportunities.

Moreover, its young population is becoming increasingly attracted to international brands thanks to digitalization which makes doing good business even easier. Overall, setting up a foreign company in Saudi Arabia can be incredibly lucrative for any business that wants to leverage all these benefits and grow substantially in one of the most advanced nations in the region.

Pre-Registration Requirements


When starting a foreign company in Saudi Arabia, it’s important to understand the pre-registration requirements that must be met to operate legally. These requirements vary depending on the type of company you wish to establish. This section will explain the various pre-registration requirements to establish a foreign company in Saudi Arabia.

Obtain an Investment License

Before obtaining an investment license, businesses must fulfill certain eligibility requirements, such as having a valid business registration in the jurisdiction and appointing a local partner if necessary. Additionally, domestic and foreign entities may be subject to other requirements, including submitting financial statements or a record of corporate shareholders. Once an organization has complied with these eligibility requirements and obtained the required investment licenses, it may proceed with its business activities in the jurisdiction.

When applying for an investment permit, organizations must submit documents validating the company’s activities and its affiliation with a legal presence in that jurisdiction. Additionally, organizations may need to submit relevant supporting documents such as relevant business agreements or proof of compliance with specific laws and regulations. Finally, alternative approval processes may also apply depending on the type of permit being applied for.

Secure a Business Location

Securing the appropriate business location for your foreign company in Saudi Arabia is one of the most important pre-registration requirements. Before signing a lease or committing to purchase any real estate, it’s important to check in with the local Chamber of Commerce or the Ministry of Trade and Investment to ensure the area is zoned and licensed correctly. Depending on where you locate, different fees and taxes may apply.

When selecting a business location, consider these factors:

– Industry zoning regulations – certain businesses may have restrictions on geography when it comes to locating their operations

– Local infrastructure – some locations may be better suited for certain industries or operations than others depending on power availability, access to transport links, etc.

– Size – depending on your business operations or plans, you may require a larger space than initially thought

– Cost – when setting up shop it’s important to find a location that works within your budget without compromising key elements such as quality.

Having an appropriate address for your company’s registered office is very important, as this will be used throughout all official documents, such as contracts and permits, so make sure you are aware of applicable laws, permits, and regulations concerning locations before signing any property agreement. Additionally, keep in mind that obtaining visas for personnel can become more difficult if they are not based in an approved foreign investment area.

Appoint a Local Sponsor

Establishing a foreign company in Saudi Arabia will involve patience and meticulous planning, preparation, and implementation. Before beginning to register your foreign business, complete the necessary pre-registration requirements to ensure that you are in line with Saudi Arabian regulations and have all necessary paperwork intact for review. One of the foremost pre-registration requirements is appointing a local sponsor representing your business interests in Saudi Arabia.

A local sponsor must be either a Saudi citizen or an entity wholly owned by one or more Saudi citizens (limited liability companies such as closed joint stock companies are permitted). The local sponsor must possess appropriate technical expertise or resources relating to the proposed industry (e.g., imports, medical industry, etc.), ensuring an efficient and successful partnership with your venture.

As part of your agreement with the local sponsor, terms such as commercial control over rates and resources will need to be clarified in writing before engaging in any form can begin. Once appointed, 100 percent personal liability over both parties’ agreements falls onto the shoulders of the appointed representative, thus ensuring that both parties operate under fair laws or status contracts only recognized by governmental bodies throughout their association.

Registration Process

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Setting up a foreign company in Saudi Arabia is a challenging task. To start the process, you must submit a registration request to the Saudi Arabian General Investment Authority (SAGIA). This includes submitting the required documents and obtaining the necessary permits and licenses. In this section, we’ll walk through the registration process for a foreign company in Saudi Arabia.

Register with the Ministry of Commerce and Investment.

To register your business and legally operate in Saudi Arabia, you must complete the registration process through the Ministry of Commerce and Investment (MoCI).

The following steps will help you start the process:

  1. Obtain a notarized copy of your articles of association (if you’re a limited liability company) or executive memorandum indicating your company’s registration in its home country.
  2. Secure approval letters from related government agencies such as the Ministry of Labor, the General Authority of Zakat and Tax, and the Ministry of Environment, Water, and Agriculture, among others (depending on your business activity).
  3. Go to one of MoCI’s branches nationwide to apply for a commercial license (in Arabic: “hijra Taaleem”). This document certifies that MoCI has reviewed your documents, approved them, and recorded all details about how it registered your company. This approval process can take 2-3 weeks; although there is no legal requirement for obtaining this document, without it MoCI cannot issue any other licenses or permits regarding your business.
  4. Collect any other permits or licenses that local authorities may require depending on what your business will provide services or products. For example, suppose you are setting up a grocery store. In that case, you need an official hygiene certificate from the municipality before opening to ensure that all health requirements are being reached properly by handling food items in the correct way by authorized personnel only and confirming standard safety measures.
  5. Once you have all the required documents, submit them to the commercial registry office near you, where they will examine them and validate documents before giving an official trade license bearing company’s name, allowing it to carry out services/products registered with initially.
  6. Thereafter, all necessary local authorities must be informed within 30 days to start issuing further operational permits later when needed upon renewal time cycle set according to local regulations

Register with the General Authority for Statistics

A detailed registration process must be followed to set up a foreign company in Saudi Arabia. After determining the required license type, the first step is registering with the General Authority for Statistics (GASTAT). Registration will be required as part of applying for a business license. This must be completed before commencing activities in Saudi Arabia. At least two documents are required for GASTAT registration: an application letter on company letterhead and the company profile or Memorandum and Articles of Association.

A representative from the company must also appear at GASTAT offices in Riyadh with a valid ID (passport), original documents, and three copies of each document (certified by a notary if you are outside Saudi Arabia). The processing time can take up to five days to complete. During this time, they may ask for additional information or clarifications regarding the documents submitted.

Once approved, companies will receive an official registration certificate. It is important to note that GASTAT may occasionally require certified audited financial statements from parent companies operating internationally as proof of financial standing.

Furthermore, sometimes GASTAT may take action against an applicant if there are discrepancies related to insufficient or incorrect documentation submitted or inaccurate information provided about its operations/activities/locations/etc., which could delay or even prevent the successful attainment of license approvals or other registrations needed for doing business in Saudi Arabia.

Register with the Saudi Arabian General Investment Authority

Registering with the Saudi Arabian General Investment Authority (SAGIA) is the first step in establishing a foreign-owned business in Saudi Arabia. Before registering, any investors or entrepreneurs need to familiarise themselves with the country’s business regulations and laws.

The registration process can be complex and must adhere to certain conditions, such as selecting an appropriate business entity type that suits the nature of their activities. Foreign companies should seek professional guidance if unsure which option is best for their particular company.

After selecting an appropriate type of business entity, the next step involves registering with SAGIA. During this process, an application form will need to be filled out and submitted along with relevant documentation. Furthermore, investments must comply with SAGIA’s requirements for capital structure and foreign ownership limitations, and other obligations imposed by other applicable laws.

Once all these steps have been completed and approved by SAGIA, a foreign-owned company can commence operations in Saudi Arabia. Support services such as visas and banking licenses will need to be acquired before launching their venture into the market.

Post-Registration Requirements

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After registering a foreign company in Saudi Arabia, a few post-registration requirements must be met to stay compliant. These include appointing a registered auditor, obtaining a foreign company license, and certifying documents with the Ministry of Commerce and Investment. Let’s look at each of these requirements in more detail.

Obtain a Work Permit

Once the foreign company has registered and obtained its Saudi Arabia Commercial Registration Certificate, one next step is obtaining a work permit for the foreign staff. The Saudi Ministry of Interior (Maktab Al Amn) is responsible for processing work permits in Saudi Arabia.

Once you submit all your documents, it takes approximately 20 days for Maktab Al Amn to process a work permit on behalf of your company.

To obtain a work permit, an application form must be filled out and submitted by the Saudi entity with support of all supporting documents, such as a passport copy of the employee, a job offer letter, and a labor contract duly attested by the Saudi Chamber or Consular mission, original physical photos, and valid medical insurance policy.

In addition to obtaining a work permit, corporate entities sponsored by individuals are advised to obtain approvals from relevant regulatory bodies such as the Ministry of Foreign affairs to avoid any issues when conducting business-related transactions or hiring new employees. Depending on their stay in the country, expatriates may also need to apply for residence permits or visas.

Finally, after all the paperwork is complete and approved, local authorities will issue a visa allowing foreigners to carry out their duties inside Kingdom’s Borders.

Set Up a Bank Account


After registering your business in Saudi Arabia, you must open a corporate bank account. This is essential to conduct business transactions, such as paying salaries and receiving customer payments.

There are a few different types of corporate bank accounts that you can select from, and the type of account chosen will depend upon your company’s unique needs. Generally speaking, if you are conducting frequent international transactions, we recommend an offshore bank account.

This type of account allows for the transfer and receipt of funds from outside the country without incurring additional currency conversion fees or taxes. A domestic corporate bank account may be more suitable for companies in Saudi Arabia conducting business solely within the country. However, it is important to note that certain restrictions or requirements may apply to this type of account.

The best approach is to discuss your company’s specific needs with a representative at the particular banking institution before making any decisions regarding which type of corporation bank account best suits your needs.

Register with the Tax Authority

Once you have registered your business with the local authorities, you will need to complete certain post-registration procedures and requirements to ensure compliance with local taxation laws and regulations.

The first step after registering your business is to chat with a representative from the relevant Tax Authority or Revenue Service in your jurisdiction. He or she can provide comprehensive advice tailored to your situation on how best to fulfill your tax obligations.

Generally speaking. However, regardless of jurisdiction, the most common requirement for any business is registered for corporate tax and VAT (value-added tax).

You may also need to register for sales and/or payroll taxes depending on if you organize personnel or sell goods directly. In either case, you must research what needs to be done as soon as possible following registration for both local and federal taxation laws.

Fulfilling these requirements will vary widely between countries and even within them. Do not hesitate to contact the Tax Authority or Revenue Service in your area should you require further assistance regarding the specifics of post-registration requirements. Don’t forget that registering your business provides certain legal benefits however it also requires that you fulfill a certain set of obligations – doesn’t miss this step!


In conclusion, setting up a foreign company in Saudi Arabia presents several advantages for international businesses. The country’s simple corporate framework, excellent infrastructure, and potential access to oil reserves have continued to attract investors worldwide.

However, it is important to remember that while the cost of setting up a business in Saudi Arabia is relatively low, it also requires a certain level of commitment in terms of time and resources. International firms must understand the legal implications and cultural requirements when establishing themselves in the kingdom.

This can involve obtaining licenses, investing considerable capital into an entity setup, and understanding labor relations between foreign nationals and permanent residents of Saudi Arabia – these are all issues that need to be considered when deciding on expanding into this country.

Finally, guidance from experienced professionals should be sought when establishing any international business presence in Saudi Arabia. This will ensure that it follows the appropriate legal processes and maximizes its benefits for employers and employees.

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