What are the types of companies suitable for foreign registration in Saudi Arabia?

In the process of market-oriented reform promoted by Saudi Arabia's "2030 Vision", the entry threshold for foreign investment has been continuously lowered, providing global investors with diversified company registration options. Saudi Arabia's unique business environment and regulatory system determine that different types of companies have significant differences in equity structure, business scope, tax policies, etc. From flexible limited liability companies to specialized branches, from preferential free zone companies to closely cooperating joint ventures, investors need to make precise choices based on their own business needs, capital scale and development plans. This paper will systematically sort out the mainstream company types suitable for foreign registration in Saudi Arabia and provide core reference for investment decision-making.

1. limited liability company: foreign preferred flexible structure

core advantages:

independent legal personality: shareholder liability is limited to the amount of capital contribution, reducing personal risk.

Foreign ownership allowed: The 2025 New Deal removes restrictions on foreign ownership (except in sensitive areas such as military, security and religious real estate brokers), and foreign ownership can be 100 percent.

Flexible governance structure: the number of shareholders is 1 to 50, there is no need to set up a board of directors (except for more than 20 shareholders), and the articles of association can define the management rules.

Tax incentives: 5% corporate income tax (standard tax rate is 20%) can be enjoyed in special zones such as King Abdullah Economic City and NEOM Future City, and some industries (such as new energy and technology) can apply for a 5-year tax exemption period.

REQUIREMENTS FOR REGISTRATION:

shareholders and directors: at least one shareholder (natural or legal person) without nationality restrictions; at least one director must hold a Saudi visa and residence permit (Iqama).

Registered capital: minimum 500000 riyals (about 1.35 million RMB), of which 25% shall be paid in and paid in within 5 years. Trading companies are required to pay 20 million riyals (about 55 million RMB) within one year.

Address and documents: the actual office address (can be attached) is required, and the documents must be notarized in Arabic and certified by the embassy or consulate, including shareholder passport, articles of association, proof of no criminal record, etc.

Localization requirements: The manufacturing industry is required to employ 14% Saudi employees (technology companies are exempt), and social security is paid through the GOSI platform.

Applicable scene:

small and medium-sized trade, manufacturing and service enterprises (such as cross-border e-commerce, logistics and construction projects).

Foreign-funded enterprises that plan to deepen the Saudi market for a long time and need flexible control over their equity and governance structures.

Relying on the special zone policy to reduce the tax burden of science and technology, new energy enterprises. For example, a Chinese new energy company obtained an order for the supply of photovoltaic modules in the NEOM project by registering LLC and enjoying a five-year tax holiday.

2. Joint Stock Company: Suitable for Large Enterprises Capital Operation Platform

core advantages:

public offering capacity: can issue shares, attract public investment, suitable for capital-intensive industries.

Brand trust: The joint-stock company form has more credibility in the Saudi market, facilitating government projects or large-scale cooperation.

Tax optimization: enterprises in the special zone can enjoy 5% income tax, and eligible enterprises can apply for 30-year tax exemption from regional headquarters.

REQUIREMENTS FOR REGISTRATION:

shareholders and directors: at least 2 shareholders, no upper limit; at least 3 directors on the board of directors, subject to localization ratio.

Registered capital: minimum 500000 riyals, of which 25% shall be paid in and paid in full within 5 years. In the case of public offerings, higher capital requirements need to be met.

Audit and disclosure: financial reports approved by Saudi auditors are required to be submitted and annual operating data are disclosed.

Industry restrictions: 8 types of industries involving oil exploration and religious real estate brokerage are still prohibited from foreign investment.

Applicable scene:

companies planning to list in Saudi Arabia or bring in strategic investors (e. g. energy, finance, manufacturing). For example, an international energy group is listed on the Saudi Stock Exchange by registering JSC and raising $1 billion for the development of a Red Sea project.

Retail and medical enterprises that need to enhance market trust through brand endorsement.

3. Foreign Corporate Branches: A Fast-to-Market, Asset-Light Model

core advantages:

no need for independent capital: Branch finance is borne by the parent company and is suitable for short-term projects or pilot operations.

Simplified approval: no need to submit the articles of association, only the parent company guarantee and business plan.

Brand continuity: The parent company brand can be used directly to reduce the cost of market education.

REQUIREMENTS FOR REGISTRATION:

parent company qualification: need to be established for 1 year, provide audit report and business supporting documents.

Local Representative: A Saudi manager shall be appointed as the legal representative to be responsible for government interface.

Industry restrictions: prohibited from engaging in banking, insurance and other regulated business, and subject to foreign investment access list.

Applicable scene:

multinational enterprises set up regional offices to co-ordinate the Middle East market (e. g. logistics, consulting, trade agency).

Short-term participation of foreign teams in large-scale projects in Saudi Arabia (e. g. exhibitions, engineering contracting).

Test the market reaction before deciding whether to register a tentative investment independently.

4. Simplification of Joint Stock Companies: A Balanced Choice of Financing and Governance

core advantages:

no minimum capital requirements: suitable for start-ups or light asset operating models.

Share flexibility: Preferred shares, convertible bonds, etc. can be set up to optimize the financing structure.

Simplified governance: no mandatory board of directors, the charter can customize the decision-making mechanism.

REQUIREMENTS FOR REGISTRATION:

shareholders and directors: at least 1 shareholder, directors need to be localized (e. g. holding Iqama).

Document requirements: Arabic version of the company's articles of association shall be submitted, specifying the type of shares and dividend rules.

Industry adaptation: suitable for technology, e-commerce and other innovative enterprises that need rapid financing.

Applicable scene:

technology start-ups that plan to go public or bring in venture capital in the future.

Mixed ownership projects that need to attract local partners through equity design.

Chinese companies that want to balance control and financing needs.

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