Frequently Asked Questions

Yes, a foreign investor can establish a company in Saudi Arabia with 100% foreign ownership in various economic sectors, including service, industrial, agricultural, and commercial activities. However, some restricted activities, such as specific regulated sectors, may require a Saudi partner.

Yes, a GCC investor can establish a company in Saudi Arabia without restrictions, as they receive the same treatment as Saudi investors.

Saudi Arabia provides an attractive investment environment, offering tax exemptions for strategic projects, full ownership rights in most sectors, government incentives, and financial support for targeted industries. Additionally, it serves as the largest economy in the Gulf and the Arab region.

The minimum capital requirement depends on the business activity and legal structure of the company. For example, trading and commercial activities require a minimum capital of 30 million SAR for full foreign ownership. However, some other sectors may have lower capital requirements or none at all. Many economic activities do not impose a specific minimum capital requirement.

A Sole Establishment is owned by a single individual who is personally liable for all financial obligations using their personal assets. In contrast, a Limited Liability Company (LLC) is a separate legal entity distinct from its owners, meaning that shareholders are only liable for the company's debts up to the amount of their investment in the capital.

The process of setting up a company in Saudi Arabia involves obtaining an investment license from the Ministry of Investment (MISA), registering the company with the Ministry of Commerce, opening a tax file with the Zakat, Tax, and Customs Authority, registering with the General Organization for Social Insurance (GOSI), and opening a corporate bank account under the company’s name.

The process of company formation in Saudi Arabia typically takes between two weeks to one month, depending on the type of business activity and the completion of all legal and administrative requirements.

• A copy of the parent company's commercial registration from outside Saudi Arabia.
• Financial statements for the last fiscal year.
• Company incorporation contract.
• All documents must be notarized by the relevant authorities.

Yes, establishing a company in Saudi Arabia requires a registered business address, whether it is a physical office or a virtual office, in compliance with the approved regulations.

No, foreign investors can freely transfer their profits abroad, provided they comply with all tax and accounting obligations imposed by the relevant authorities.

Saudi Arabia imposes a corporate income tax of 20% on net profits for foreign-owned companies. Additionally, a Value Added Tax (VAT) of 15% applies to goods and services. Zakat, however, is only levied on Saudi-owned companies.

No, foreign investors are not required to pay Zakat, as it is only imposed on companies owned by Saudi nationals. However, foreign-owned companies are subject to corporate income tax.

Penalties for late submission of tax returns vary depending on the delay period. However, they can reach up to 25% of the due tax amount if the delay persists for an extended period.

Yes, Saudi Arabia offers certain tax incentives for foreign investors, such as tax exemptions in special economic zones. Additionally, there are support programs for small and medium-sized enterprises (SMEs).

Companies in Saudi Arabia must comply with the International Financial Reporting Standards (IFRS) for financial reporting and prepare annual financial statements in accordance with the approved accounting frameworks.

Yes, a company can change or expand its business activities after incorporation. However, this requires modifying the investment license with the Ministry of Investment, updating the Articles of Association and Commercial Registration, and obtaining any new licenses if required for the additional activities.

Yes, a company can be sold or transferred to another investor, provided that all legal procedures are completed. This includes the transfer of licenses and financial obligations to the new investor.

The process of dissolving and liquidating a company in Saudi Arabia involves settling all debts and financial obligations, canceling the commercial registration with the Ministry of Commerce, filing a liquidation request with the relevant authorities, and ensuring full compliance with all tax and accounting requirements before the final closure.

The government entities responsible for overseeing investment in Saudi Arabia include the Ministry of Investment (MISA), which issues investment licenses; the Ministry of Commerce, which regulates company registration and commercial activities; the Zakat, Tax, and Customs Authority, responsible for tax oversight; and the Ministry of Human Resources and Social Development, which manages employee affairs and work permits.