Saudi Arabia – Saudi Arabia is one of the fastest-growing economies in the Middle East. With its strategic location, strong infrastructure, and government support for foreign investment, it has become a top destination for international entrepreneurs. One of the most attractive reforms is the ability for foreign investors to set up a business in Saudi Arabia without a local partner.
This is a major shift from the past, where foreign investors were required to have a Saudi national as a partner. Today, with the right approvals and licenses, you can own 100% of your business in Saudi Arabia.
Let’s discover what this means, the steps involved, and important points to consider for smooth company formation in Saudi Arabia.
Can foreigners own a business without a Saudi partner?
The Saudi government now allows 100% foreign ownership in most sectors. This reform is part of Vision 2030, a national plan to diversify the economy and attract global investments. It removes the previous requirement for a Saudi partner or sponsor, making it easier for foreign investors to enter the market independently.
Which Sectors Allow Full Foreign Ownership?
Information Technology & Software Development
Consulting Services (Legal, Financial, Business, Engineering)
Healthcare & Medical Services
Education & Training Institutions
Manufacturing & Industrial Projects
Tourism & Hospitality Services
E-commerce & Digital Services, and more.
Note: While these sectors allow 100% foreign ownership, investors may be required to meet specific licensing criteria or regulatory approvals depending on the nature of the business. It's advisable to consult the Ministry of Investment (MISA) or a local legal advisor for sector-specific compliance requirements.
What Are the Requirements for 100% Foreign Ownership?
a) Investment License from MISA
You must obtain an investment license from the Ministry of Investment of Saudi Arabia (MISA). This is the first and most important step in the company incorporation process.
b) Minimum Capital Requirement
Some sectors require a minimum capital investment, which varies depending on the type of business and its activities.
c) Commercial Registration (CR)
After getting the MISA license, you must register your company with the Ministry of Commerce (MoC) and obtain your Commercial Registration (CR) certificate.
d) Office Address
Your company must have a registered physical address to complete business setup in Saudi Arabia.
e) Saudization Compliance
You are required to hire a certain percentage of Saudi nationals, as per the Nitaqat (Saudization) rules. The required quota depends on your business activity and company size.
f) Other Registrations
You must also register with ZATCA (Tax Authority), the General Organization for Social Insurance (GOSI), and open a Saudi bank account.
Benefits of Starting a Business Without a Local Partner
Full ownership and control over business decisions
No profit-sharing or legal dependency on a local sponsor
Greater flexibility in operations and management
Access to a dynamic and growing market in the region
Improved investor confidence due to transparent processes
Challenges and Things to Keep in Mind
The initial setup process can be complex if you’re not familiar with the local legal system.
Minimum capital requirements may be higher for certain sectors.
Saudization obligations need proper workforce planning.
Arabic language documentation may require translation and legal review.
Regular compliance with local laws and updates is essential to avoid penalties.
Thus, Saudi Arabia’s recent reforms have made it much easier for foreign investors to enter the market independently. Starting a business without a local partner is now possible and offers many advantages. However, it’s important to understand the legal process and comply with all local regulations.
With the right guidance and support from lawyers in Saudi Arabia, you can set up your business smoothly and take advantage of the Kingdom’s growing opportunities.
SB Saudi Lawyers, the best law firm in Saudi Arabia, offers expert support for securing investment licenses, completing company registration, and ensuring full legal compliance. We simplify the entire process of company formation in Saudi Arabia so you can focus on growing your business.
About SB Saudi Lawyers:
SB Saudi Lawyers (AlSuwaiket and AlBusaiyes Law Firm) is a premier law firm in Saudi Arabia, trusted and renowned for its legal consultancy services in corporate, commercial, construction, mergers and acquisitions, real estate, employment law, and more. With a team of highly skilled and experienced lawyers, the firm provides comprehensive legal services, ensuring compliance with local laws and regulations. SB Saudi Lawyers is dedicated to providing exceptional legal solutions tailored to meet the unique needs of individuals, corporations, and enterprises. Their commitment to professionalism and excellence makes them a trusted partner for those seeking reliable and affordable legal support in Saudi Arabia.