Start your branch in Saudi Arabia under the Foreign Investment Law, which is limited to specific permitted activities. It cannot engage in certain operations like trading. This type of company, also called a permanent branch, can be opened without the need for a Saudi partner.
Benefits of starting your branch in Saudi Arabia
To start your branch in Saudi Arabia offers numerous strategic advantages for foreign companies looking to expand:
- 100% Foreign Ownership: Foreign investors maintain full control and ownership of their Saudi branch.
- Streamlined Registration: The setup process is simpler compared to other business entities in the Kingdom.
- No Need for a Local Sponsor: Establishing a branch in Saudi Arabia does not require a partnership with a local sponsor.
- Cost-Effective Expansion: A branch office offers an affordable and efficient way to expand your business and increase brand visibility in the region.
- Stronger Market Presence: Operating locally allows companies to build a solid presence and gain valuable insight into the Saudi market.
Contact Motaded today for a free consultation. Our experts are here to help you navigate the setup process smoothly and successfully. Your journey to start your branch in Saudi Arabia begins with us.
Key Steps to start your branch in Saudi Arabia
Starting in Saudi Arabia through a branch office involves several essential steps. Here’s a streamlined guide to help you navigate the process:
1. Obtain a MISA License
To start your branch in Saudi Arabia, secure a license from the Ministry of Investment of Saudi Arabia (MISA), formerly known as SAGIA. This license allows foreign service-based companies to legally operate in the Kingdom.
- Eligibility: Companies in industries like IT, engineering, finance, and healthcare are typically eligible.
- Ownership : MISA allows 100% foreign ownership with full control.
- Required Documents: Articles of Association, audited financials, and a detailed business description.
2. Register with the Ministry of Commerce (MoC)
After obtaining your MISA license, register the branch with the Ministry of Commerce to receive your Commercial Registration (CR).
Purpose
The CR enables you to legally conduct business, sign contracts, open bank accounts, and hire employees.
3. Open a Corporate Bank Account
Set up a local business bank account to manage financial transactions in Saudi Arabia.
Requirements
You’ll typically need your MISA license, CR, and company documents like the Articles of Association.
4. Join the Chamber of Commerce
Membership in the local Chamber is vital for business visibility and engagement.
Benefits
Enables participation in government tenders, networking events, and access to local business resources.
5. Comply with Saudi Labor Laws
Ensure full compliance with labor regulations, including:
- Work Visas (Iqama): All foreign employees must have a valid work and residency permit sponsored by the employer.
- Saudization (Nitaqat): This policy requires companies to hire a minimum percentage of Saudi nationals, based on business type and size.
6. Meet Tax and Financial Obligations
Foreign branches must comply with the Kingdom’s tax framework.
- Corporate Tax: Branch profits are taxed at 20%. Some sectors may qualify for incentives.
- VAT: Companies must register for 15% VAT and adhere to reporting regulations via the Zakat, Tax and Customs Authority (ZATCA, formerly GAZT).
Read more about: Branch License in Saudi Arabia | Complete 2025 Guide
Essential Tips for a Smooth Branch Setup in Saudi Arabia
- Operate Under Parent Company Name: To start your branch in Saudi Arabia The branch must carry the same name as the parent company and can only conduct the activities listed on the MISA license.
- Secure a Physical Office: Having a registered business address is mandatory for legal and operational purposes.
- Understand the Market: Research local trends, consumer behavior, and industry conditions to better position your branch.
- Stay Updated on Investment Opportunities: Monitor evolving sectors and government initiatives to align your business strategy.
- Prepare Documentation Early: Ensure all documents are legalized, translated, and submitted on time to prevent delays.
- Know Local Regulations: Familiarize yourself with commercial, labor, and tax laws to ensure compliance.
- Choose the Right Bank: Select a reliable local bank that meets your operational and financial needs.
- Check Industry-Specific Licenses: Depending on your field, additional authorizations or regulatory approvals may be required.
Following these steps and tips will help ensure a smooth, compliant, and successful Start your branch in Saudi Arabia.
Key Considerations for Establishing a Branch in Saudi Arabia
Foreign companies looking to start their branch in Saudi Arabia should take the following factors into account:
A branch is not a separate legal entity; it operates as an extension of the parent company.
It must maintain a registered address within a Saudi city to qualify for financial incentives.
The branch is permitted to carry out only those activities that are consistent with the parent company’s business scope.
Foreign businesses are allowed to start your branch in Saudi Arabia.
To start your branch in Saudi Arabia provides international companies with a strategic entry point into one of the region’s most rapidly growing economies.
With the kingdom undergoing major transformation under Vision 2030, starting your branch in Saudi Arabia enables you to seize emerging opportunities across multiple sectors while retaining full control over your operations.
Documents Required to start your branch in Saudi Arabia
At our company, we’re committed to supporting you through every step of the documentation process—customized to match your specific business activities. Key Documents to Start Your Branch in Saudi Arabia:
Valid business license of the parent company
Memorandum of Association (MoA)
Audited financial statements of the parent company
Shareholder certificate
Passport copies of all shareholders
Ready to expand your business? Get in touch with Motaded today to discover how we can start your branch in Saudi Arabia.
FAQS
What are the tax obligations for a foreign company’s branch in Saudi Arabia?
A foreign branch operating in Saudi Arabia is subject to a 20% corporate income tax on revenue earned within the kingdom.
How can I establish a branch of a foreign company in Saudi Arabia?
Collaborating with a local expert ensures that you can navigate and complete all the official procedures required to set up a branch office in Saudi Arabia efficiently.
What distinguishes a branch from a subsidiary in Saudi Arabia?
A branch functions as an extension of the parent company, making the parent company legally accountable for the branch’s obligations. In contrast, a subsidiary is an independent legal entity, and the parent company is not liable for its debts or legal matters.