With its strategic location, rapidly growing economy, and a pro-business government, Saudi Arabia is quickly becoming a prime destination for global foreign investments.
Opening a branch in Saudi Arabia is a strategic move for companies aiming to tap into the vibrant and rapidly growing MENA market.
What Are the Operating Rules for Foreign Company Branches in Saudi Arabia?
A foreign branch functions as an extension of its parent company abroad. In Saudi Arabia, this means the branch operates under the same legal framework and identity as its headquarters, conducting business directly on behalf of the parent company.
Legal Definition of a Foreign Branch
According to Saudi regulations, a foreign branch is legally viewed as an integral part of its parent company, maintaining the parent company's official name in all its operations.
Also adheres to the same legal and financial responsibilities. Maintaining full ownership and direct oversight of all branch operations within Saudi Arabia.
Differences Between a Foreign Branch and a Local Company
The main difference between a local company and a foreign branch lies in their legality as well as their different regulatory requirements.
The foreign branch operates as part of the parent company, without independent legal status, meaning the parent firm bears full responsibility for its activities..
Unlike a branch, a local company operates as a separate entity, offering shareholders protection from personal liability beyond their capital contribution.
Permitted Activities for Foreign Branches
As an extension to the main company, foreign branches in Saudi Arabia are permitted to engage in activities aligned with their parent company’s core business, subject to MISA and MOC approvals.
Of course, certain sectors may have specific restrictions or additional requirements. For more thorough understanding of establishing a foreign branch in Saudi Arabia, including detailed procedures, visit Motaded.com
Why Choose Saudi Arabia for Your Foreign Company Branch?
With the kingdom's reformed interest in investing in new visionary projects and attracting more global businesses, opening a foreign branch in Saudi Arabia is a great way to establish an initial presence and assess the market’s opportunities.
Market Advantages
- Saudi Arabia holds the top spot as the Middle East’s biggest economy. Beyond its status as a major global oil producer, the country is now spearheading a new economic era with its new investment laws.
- Saudi Arabia boasts a young, digitally connected population, with more than 60% under the age of 35. This creates a dynamic market with strong purchasing power, driven by a per capita GDP of $27,900.
- A strategic geographic location connecting Asia and Africa: Saudi Arabia offers access to expanding regional markets with over 36 million people. A branch in Saudi Arabia gives you unparalleled opportunities in the Gulf and MENA regions.
Government Incentives
- 100% foreign ownership permitted in many sectors: Foreign branches no longer require local sponsors in most sectors, and digital platforms as well as retail and wholesale business operations in the Kingdom, in accordance with Vision 2030
- Tax exemptions and incentives for foreign investors : Under the vision 2030 incentives , The kingdom offers tax exemptions, subsidies, and grants in priority sectors like renewable energy, healthcare, and technology.
- Evolving legal systems designed to support foreign businesses: Not only is there tax reduction to foreign investments in certain sectors, as an investor you get to Transfer 100% of your earnings abroad without restrictions or hassles.
Mega Project Opportunities
- Saudi Vision 2030 Mega projects such as NEOM and Qiddiya: The $500 billion tech-driven futuristic city with an emphasis on sustainability and the $8 billion entertainment megaproject are an investment goldmine to any foreign company.
- Investment opportunities in up-and-coming green sectors like renewable energy, smart cities, and digital technologies, along with potential partnerships with major national and global entities.
Legal Requirements for Opening a Foreign Branch in KSA
Launching a foreign branch in the Kingdom requires dealing with a well-regulated, investor-friendly system that outlines clear processes for international businesses, such as:
Commercial Registration Process
To legally establish a foreign company in the kingdom, you must obtain a commercial registration in Saudi Arabia, secure a physical office address and you have to translate the company’s legal documentation into Arabic.
It’s best to seek assistance from a local service agent to handle government interactions.
Licensing Requirements
To legally establish a foreign branch, investors must secure a foreign investment license from the Ministry of Investment (MISA), which permits foreign ownership and business operations within approved sectors in Saudi Arabia:
- Consulting: Legal, financial, engineering, and IT advisory services.
- Construction: Infrastructure, architecture, and project management.
- Technology: Software development, AI, and cybersecurity.
- Healthcare: Medical equipment supply, telemedicine, and hospital management.
Capital and Ownership Rules
One of the significant advantages of Saudi Arabia’s Vision 2030 for foreign investors is the ability to own 100% of their business in most sectors.
These new reforms have attracted many global investments and encouraged a competitive economy as well as eliminated many traditional barriers.
No longer is there a minimum capital and foreign entities get to transfer a 100% of earnings abroad.
Restricted Activities
According to Saudi law, Certain sectors are restricted or prohibited for foreign investment, which include oil exploration, drilling and production; manufacturing of military equipment, devices, and uniforms; and real estate investment in specific areas.
What Are the Advantages of Setting Up a Branch vs. a New Company?
There are plenty of strategic and financial benefits to establishing a foreign branch in Saudi Arabia in comparison to forming a new, independent company.
Foreign branches in Saudi Arabia have no mandatory minimum capital, making them more cost-effective compared to local companies which have a minimum of SAR 500,000.
A foreign branch also gets to operate under the same legal name and business activity of the parent company.
Discover also: Everything about investing in Saudi Arabia.
Processing Time and Fees: What Should You Expect?
Duration: The foreign branch setup duration typically takes from 6-8 weeks depending on the business activity, sector, and completeness of documentation.
Government & Operational Costs
1.Government Fees:
- MISA License: SAR 3,000–8,000 (depending on activity).
- Commercial Registration (CR): SAR 500.
- Municipal License: SAR 1,000–5,000 (varies by location).
- Foreign Branch Capital: Minimum SAR 500,000 (mandatory deposit).
2.Operational Costs:
- Office Rent: SAR 150–600/m² monthly (Riyadh/Jeddah).
- Legal/Consultancy Fees: SAR 10,000–50,000.
- Taxes: 20% corporate tax, 15% VAT (exemptions apply in free zones)
3.Available Visas
- Temporary Work Visa:
- Cost: SAR 1,000.
- Duration: 90 days (extendable to 180 days)
- For short-term projects, training, or consultancy.
- Employment Visa (Iqama):
- Cost: SAR 2,000–5,000 (includes medical exams and fees).
- Duration: 1 year (renewable) and requires a Saudi employer sponsor and police clearance.
Why Partner with Motaded for Your Foreign Company Branch in Saudi?
Opening a foreign company branch in Saudi involves navigating legal, administrative, and cultural processes that can be challenging without expert local guidance. Here’s where Motaded steps in.
We specialize in supporting foreign investors with everything needed to successfully establish their branch — from choosing the right business activity to securing licenses, commercial registration, and handling legal translations.
Our experienced team ensures full compliance with Saudi regulations while saving you valuable time, effort, and operational costs.
Our services include:
- Legal and documentation support.
- Fast-track licensing approvals (MISA & MOC).
- Local sponsorship, PRO, and visa management.
- Office setup and official address services.
- Ongoing corporate compliance management.
With Motaded, your foreign company branch in Saudi will be launched smoothly, securely, and efficiently — backed by local expertise you can trust.
Final Thoughts: Tap into the Saudi Market with Confidence
Establishing a foreign company branch in Saudi Arabia opens the door to one of the region’s most dynamic, opportunity-rich economies — but success demands experienced local support.
By choosing our company as your trusted partner, you’ll gain a reliable ally that understands Saudi laws, market culture, and business dynamics. Whether expanding in technology, hospitality, logistics, or healthcare — we help make your market entry fast, legal, and hassle-free.
Ready to Begin? Let’s Get Your Branch Up and Running
Take the first step toward launching your foreign company branch in Saudi Arabia.
Visit Motaded.com.sa now to book your free consultation — and see how we can turn your business plans into reality, quickly, smoothly, and confidently.
FAQs about foreign company branch in Saudi Arabia.
What’s the Key Difference in Saudi Arabia?
A foreign branch operates under the same legal identity as its parent company abroad and carries full liability for its operations in Saudi Arabia.
A subsidiary, however, is a separate legal entity with limited liability, independently registered under Saudi law, and can have different ownership structures.
Which Business Activities Are Permitted for Foreign Company Branches in Saudi Arabia?
A foreign branch can only operate within the scope of its parent company’s core business activities. All activities must be approved by the Ministry of Investment (MISA) and the Ministry of Commerce (MOC). Certain industries may have restrictions or require additional permits.
Can a foreign branch in Saudi Arabia own property or sign contracts independently?
A foreign branch can lease office space, open bank accounts, hire employees, and sign contracts within the permitted business activities, but it operates legally under the name and full liability of the parent company.
What are the benefits of opening a foreign branch instead of a new company?
A foreign branch benefits from 100% foreign ownership, no minimum capital requirement, simplified brand extension, and easier profit repatriation. It allows companies to maintain direct operational control while minimizing setup costs and local partnership obligations.