In the past, setting up a business in Saudi Arabia as a foreigner was not easy. You needed a local partner who would own a part of your company. However, things have changed in recent years with the initiative of Vision 2030 reforms as Saudi Arabia has opened its doors wider to foreign investors, offering full ownership rights in many sectors.
If you are wondering whether 100% foreign ownership is possible in Saudi Arabia today, the answer is yes, but with some important conditions. In this blog, we will explain what 100% ownership means, where it is allowed, and how you can benefit from it.
What Does 100% Foreign Ownership Mean?
100% foreign ownership means that a company can be fully owned by non-Saudi individuals or organizations, without the need for a Saudi partner. The foreign investor has full control over the business, including decision-making, profits, and operations.
This is a major shift from earlier rules where foreigners had to partner with Saudi nationals and could not hold more than 49% ownership in most sectors.
Why Did Saudi Arabia Allow 100% Foreign Ownership?
The Saudi government introduced this change as part of its Vision 2030 plan, which aims to diversify the economy and reduce its reliance on oil. By allowing more foreign investment, the country hopes to:
- Bring in new industries and technologies.
- Create more jobs for Saudi citizens.
- Increase competition and raise the quality of services.
- Make Saudi Arabia a global investment hub.
Opening up the market was a necessary step to attract top businesses and investors from around the world.
Which Sectors Allow 100% Foreign Ownership?
Today, many sectors in Saudi Arabia allow full foreign company setup in Saudi Arabia with major sectors such as:
- Information Technology (IT) and Communications
- Healthcare Services
- Education and Training
- Manufacturing and Industrial Projects
- Entertainment and Media
- Hospitality and Tourism
- Logistics and Supply Chain Services
- Retail and Wholesale Trade (subject to specific capital and operational requirements)
- Real Estate Development (with conditions, excluding Makkah and Madinah)
The government has also introduced Special Economic Zones (SEZs) where foreign investors enjoy even more benefits, including lower taxes and fewer restrictions.
However, certain sectors are still restricted or require specific approvals with the assistance of corporate lawyers in Saudi Arabia. Some of the potential examples include oil exploration, military industries, insurance, and certain types of real estate brokerage activities.
Rules and Conditions for 100% Foreign Ownership
While Saudi Arabia welcomes foreign investors, there are some important rules and conditions to meet with the assistance of a law firm in Saudi Arabia:
- a) Investment License
Foreign investors must apply for and obtain a Foreign Investment License from the Ministry of Investment of Saudi Arabia (MISA). This license is the legal proof of your foreign investment and that your business is allowed to operate fully under foreign ownership.
- b) Minimum Capital Requirements
Some business activities may require a minimum capital investment.
- c) Saudization (Nitaqat Program)
All businesses in Saudi Arabia must comply with Saudization rules. This means you must hire a certain percentage of Saudi nationals in your workforce, depending on your company size and sector.
- d) Office Space
To complete company registration, you must have a physical office address in Saudi Arabia.
- e) Tax Compliance
Businesses must register with the Zakat, Tax, and Customs Authority (ZATCA) for tax purposes. Foreign companies are subject to 20% corporate income tax and 15% Value Added Tax (VAT) on most goods and services.
How to Set Up a 100% Foreign-Owned Company in Saudi Arabia
Step 1: Define Your Business Activity
Choose the right activity for your company and make sure it is allowed for full foreign ownership under Saudi regulations.
Step 2: Apply for a Foreign Investment License
Submit your documents to MISA, including company profile, financial statements, passport copies of shareholders, and business plan (if required).
Step 3: Register Your Company
After receiving the investment license, register your company with the Ministry of Commerce (MoC). You will get a Commercial Registration (CR), which acts like your business identity card.
Step 4: Arrange for Office Space
You must secure office space and obtain a lease contract certified by the local municipality.
Step 5: Open a Bank Account
Set up a corporate bank account in Saudi Arabia.
Step 6: Register for Taxes
Complete your registration with ZATCA for corporate taxes and VAT.
Step 7: Hire Employees
Start building your workforce while ensuring you meet Saudization targets.
Step 8: Begin Operations
Once all registrations and approvals are in place with the assistance of KSA law firm, you can officially launch your business operations.
Benefits of 100% Foreign Ownership in Saudi Arabia
- a) Full Control
You have complete control over decision-making, management, and business operations without needing a Saudi partner.
- b) Profit Retention
You are entitled to keep 100% of the profits your business generates, subject only to applicable taxes.
- c) Brand Protection
Owning your company and having a law firm in KSA fully helps protect your brand identity and intellectual property rights in Saudi Arabia.
- d) Ease of Expansion
It is easier to expand across Saudi Arabia or into neighboring Gulf countries when you have full control over your company.
- e) Access to Incentives
The Saudi government offers many incentives for foreign investors, such as tax exemptions in certain sectors and easy access to funding programs.
- f) Strong Market Opportunities
Saudi Arabia’s economy is growing fast, with high demand for goods, services, and technologies across different industries.
SB Saudi Lawyers: Your Trusted Partner for 100% Business Ownership!
Understanding and handling Saudi Arabia’s investment laws and setting up a 100% foreign-owned company can be complex without the right guidance. SB Saudi Lawyers, the best law firm for company registration in Saudi Arabia, specialize in helping international investors establish their businesses smoothly and in full compliance with local regulations.
Our expert team of lawyers in Saudi Arabia assists with every step of company incorporation, from securing the Foreign Investment License from MISA to drafting legal documents, handling company registration, tax registration, and ensuring Saudization compliance. With deep knowledge of sector-specific requirements and strong ties with local authorities, SB Saudi Lawyers help you avoid delays, minimize risks, and ensure that your business setup is efficient, compliant, and future-ready.
Whether you are launching a small enterprise or a large multinational branch, contact SB Saudi Lawyers for trusted legal expertise you need to succeed in Saudi Arabia.
