100% Foreign Ownership in Saudi Arabia: Can It Be Done?

Can Foreigners Own 100% of a Company in Saudi Arabia?

Saudi Arabia has made it significantly easier for foreign investors to own businesses, thanks to reforms driven by the Vision 2030 plan. Previously, foreign ownership was capped at 75%, but recent changes now allow 100% foreign ownership in various sectors. Let's explore the key regulations and opportunities for foreigners looking to start a company in Saudi Arabia.

Key Changes in Foreign Ownership

Before 2016, foreigners were restricted to owning only 75% of a business, with the remaining 25% required to be owned by Saudi nationals. However, as part of its Vision 2030 initiative, Saudi Arabia has relaxed these restrictions to attract more foreign direct investment (FDI). This change has allowed full ownership in specific sectors, such as retail and wholesale, since 2015, with further opportunities across other industries.

Sectors Open to 100% Foreign Ownership

Many sectors are now open to complete foreign ownership, including:

• Retail and Wholesale
• Services
• Manufacturing
• Contracting

However, some industries—like real estate, oil and gas, and certain trading activities—still require partial Saudi ownership or compliance with specific capital regulations.

Business Structures for Foreign Investors

Foreigners have several options for business structures, including:

• Limited Liability Company (LLC): A popular choice due to its limited liability for shareholders.
• Joint Stock Company (JSC): Ideal for larger businesses looking to publicly issue shares.
• Branch Offices/Subsidiaries: Foreign companies can establish local branches or subsidiaries to manage operations.

Minimum Capital Requirements

The capital required for setting up foreign-owned businesses varies by sector:

• Retail and Wholesale: SAR 500,000 minimum capital.
• Real Estate Investment: SAR 30 million.
• Contracting: SAR 500,000 plus other assets.

Licensing and Compliance

To operate, foreign-owned companies must obtain an investment license from the Ministry of Investment (MISA), register with the Ministry of Commerce, and comply with labor and social security regulations. Additional documentation, such as the Articles of Incorporation (AOA), is also required.

Special Economic Zones and Incentives

Saudi Arabia has introduced special economic zones (SEZs) to further attract foreign investors, offering benefits like tax exemptions and simplified regulations. These zones can provide competitive advantages for businesses setting up in the Kingdom.

Conclusion

Saudi Arabia has significantly eased its regulations, allowing foreigners to own 100% of a company in several sectors. The Vision 2030 initiative has created new opportunities, making the Kingdom an attractive destination for foreign investment. Investors should familiarize themselves with the specific rules for their industry and may benefit from consulting local experts to ensure a smooth business setup process.