The Short Answer
Between 2016 and 2024, Saudi Arabia issued more than 1,200 legislative reforms under the Vision 2030 framework. These reforms restructured the legal foundation of foreign investment: a new Ministry of Investment replaced an old authority, a new Companies Law changed entity structures, taxes that did not exist were introduced, new types of residency became available, and regulatory requirements were created. The investor reading about Saudi Arabia today is looking at a fundamentally different framework from what existed in 2015.
25 April 2016 — Vision 2030 Issued
Vision 2030 was officially issued on 25 April 2016 (18 Rajab 1437H) by Cabinet approval. Three pillars: a vibrant society, a thriving economy, an ambitious nation. What concerns the foreign investor directly: diversify revenue away from oil, increase private sector GDP contribution from 40% to 65%, raise FDI from 3.8% of GDP to the global average of 5.7%, and grow the role of SMEs.
Vision 2030 is not a voluntary framework — it is binding on every ministry and authority. Every change a foreign investor sees today in licensing, residency, and taxation is the product of this framework translated into royal decrees.
25 February 2020 — A Full Ministry of Investment Created
On 25 February 2020, a royal decree elevated the investment authority to full ministerial status, creating the Ministry of Investment (MISA). A ministry holds broader legislative and executive powers than an authority. It can amend regulations, issue executive lists, and coordinate with other government entities directly. For the investor: faster response times, broader decision authority, and investment policy drawn at the government level.
All investment licenses now issue from MISA through the electronic portal at misa.gov.sa. All regulations from before 2020 remain in force with accumulated updates. Any reference in older documents to the previous investment authority refers to what is now MISA.
19 January 2023 — A New Companies Law
On 28 June 2022, Royal Decree M/132 issued the new Companies Law, which entered into force on 19 January 2023. It replaced the previous Companies Law (M/3) with a more flexible framework. Key changes for the foreign investor:
• LLC minimum capital requirement eliminated in most sectors (Article 156). The previous law required SAR 500,000 for foreign activities.
• The Simplified Joint Stock Company introduced as a new entity type — suited for startups and companies planning investment rounds.
• Single-shareholder LLCs now available to foreign investors without requiring a local partner.
• Articles of association can now be drafted and registered electronically via the Saudi Business Center (SBC).
These changes are why a foreign investor today can set up an LLC with no minimum capital and no mandatory Saudi partner across most sectors. For regulated sectors and professional companies, specific requirements may still apply — Motaded advises on exact requirements before submission.
January 2019 — Premium Residency
Cabinet Resolution No. 247 (January 2019) established the Premium Residency program. It grants investors and exceptional talent long-term residence in Saudi Arabia without a Saudi sponsor. Two categories: permanent (SAR 800,000) and renewable annual (SAR 100,000/year). See our Premium Residency guide for current eligibility and application requirements.
2021 — The Regional Headquarters (RHQ) Program
The RHQ program was launched in 2021. It requires multinational companies receiving Saudi government contracts to relocate their regional headquarters to Riyadh. Companies registered under RHQ receive a 15-year tax exemption (0% corporate income tax and 0% withholding tax), streamlined MISA licensing, and access to the Saudi government market. The compliance deadline has passed and enforcement is active.
See our GRO services for RHQ setup, government vendor registration via Etimad platform, and ongoing government relations management.
2018 — VAT Introduced at 5% Then Raised to 15%
VAT was introduced in Saudi Arabia at 5% on 1 January 2018 — the first time in the Kingdom's history. On 1 July 2020, the rate was raised to 15%. Foreign companies are subject to Saudi VAT on their Saudi activities from day one of commercial registration. Registration with ZATCA is required immediately after commercial registration issuance.
What This Means for the Investor Today
The framework a foreign investor faces today is the product of all these reforms. The MISA investment license issues from a ministry with broad powers. The Companies Law allows flexible structures with no minimum capital in most sectors. Premium Residency and the RHQ program provide long-term options beyond a standard work visa. VAT at 15% applies from day one.
Motaded manages the full 23-step setup path — from document authentication to bank account opening. See our business setup service or use our setup cost calculator
Current Framework?
Contact us at info@motaded.com.sa or see our business setup service.
Also Read: Business Setup in Saudi Arabia | Premium Residency | Free Zones in Saudi Arabia
Q: When did MISA replace the previous investment authority?
A: On 25 February 2020, a royal decree elevated the investment authority to full ministerial status, creating the Ministry of Investment (MISA). All licenses that previously issued from the old authority now issue from MISA through misa.gov.sa.
Q: What did the new Companies Law change for foreign investors?
A: The new Companies Law (effective 19 January 2023, Royal Decree M/132) eliminated the minimum capital requirement for LLC formation in most sectors, introduced the Simplified Joint Stock Company, and made single-shareholder LLCs available to foreign investors without a local partner.
Q: What is the RHQ program and does it affect my company?
A: The RHQ program requires multinational companies receiving Saudi government contracts to register their regional headquarters in Riyadh. It offers a 15-year tax exemption and streamlined licensing. See our GRO services for qualification.
Q: What taxes does a foreign company in Saudi Arabia pay?
A: Corporate Income Tax (CIT): 20% on foreign-owned company profits. VAT: 15% on taxable transactions. Withholding tax: 5-20% on certain payments to non-residents. ZATCA registration is required immediately after CR issuance. See our ZATCA platform guide.
Q: How does Motaded support companies navigating the Vision 2030 framework?
A: Motaded manages the full company setup path — MISA license, commercial registration, government platform activation, visa issuance, and bank account opening. We serve 281 establishments across 8 sectors. See our business setup service.
