Subsidiary Companies in Saudi Arabia
XI. Summary The Kingdom of Saudi Arabia has made significant strides in creating an attractive and facilitated investment environment for foreign investors, as part of its ambitious Vision 2030. Establishing subsidiary companies is a strategic option that provides liability protection and operational flexibility, supported by a sophisticated legal and regulatory system that ensures equal treatment, investment protection, and freedom to repatriate profits. The move towards digitalization and streamlining procedures, along with tax and customs incentives directed at priority sectors, reflects a firm commitment to boosting FDI inflows. However, the complex nature of the tax system and Saudization requirements, in addition to ongoing procedural and regulatory challenges, necessitate comprehensive due diligence and engagement with local legal and financial expertise by foreign investors. To maximize the promising investment opportunities in the Kingdom, investors are recommended to: Conduct Thorough Due Diligence: A precise understanding of permitted and excluded sectors, and the legal and financial requirements for each legal form. Engage Local Experts: Collaborate with law firms and tax consulting offices specialized in Saudi law to ensure full compliance and avoid potential risks. Align Investment with Vision 2030: Focus on sectors that receive government support and special incentives, and that align with the Kingdom's economic diversification goals. Proactive Tax Planning: Utilize double taxation agreements and plan the structure of payments to non-residents to minimize the overall tax burden. Through these steps, foreign investors can build a strong and sustainable presence in the Saudi market, contributing to the Kingdom's economic objectives while achieving rewarding returns on their investments.