Can You Start a Business in Saudi as a Foreign National?

Updated on May 13, 2025 | Saudi e-Visa

Wish to set up a business in Saudi? Explore lucrative investment opportunities in Saudi Arabia with the Saudi e-Visa application and the business visa for KSA. The simple answer to the above question was a yes even a few years back. However, in recent years Saudi Arabia has made strides to improve the business and investment landscape.

In order to attract investors, Saudi Arabia has opened up its market vis-a-vis multiple industries. The new Investment Law declared in 2024 (pending implementation in 2025) is designed to level the field between domestic and foreign investors in Saudi Arabia. To add, the Kingdom of Saudi Arabia is aiming to streamline the regulatory sphere with this law.

Further, the availability of the online Saudi e-Visa application has made traveling to and investing in Saudi Arabia much easier.

Can Foreigners Own Businesses in Saudi Arabia?

The Kingdom of Saudi Arabia lets foreigners enjoy 100% ownership of their business. However, the Ministry of Investment (MISA) must give you a license when you set up your business in Saudi Arabia.

With the implementation of Saudi Arabia’s new Investment Law (pending official publication in February 2025), the country aims to achieve a more pro-investment market. The target is to streamline and update the regulatory landscape.

The top sectors that allow foreign investments in Saudi Arabia are:

  • Renewable energy
  • Infrastructure
  • Manufacturing
  • IT and ITES
  • Healthcare
  • Tourism
  • Fintech and Financial services
  • Supply chain and logistics

To add, investments from foreigners are restricted in the below sectors:

  • Defense and military manufacturing.
  • Real Estate in Holy Cities of Mecca and Medina.
  • Oil and gas exploration and production
  • Religious tourism associated with Hajj and Umrah.
  • Private Security Services.

Understanding the Legal Business Structures

To operate within legal bounds in Saudi Arabia, foreigners can set up one of the following:

  • Regional Headquarters (RHQ)
  • Joint Stock Company
  • Foreign Company Subsidiary
  • Limited Liability Company (LLC)
  • Technical and Scientific Services Office (TSSO)

Further, GCC nationals can also set up Sole Proprietorship firms in the Kingdom of Saudi Arabia.

Requirements for Foreign Investors

Under Saudi Arabia’s new Investment Law, investors need to have a minimum capital SR 30 million for wholesale and retail trade. For closed joint stock companies, this is set at SR 500000. If this JSC is owned by a single individual, the minimum capital requirement is SR 5 million. Further, sector-specific capital requirements may range from SR 2 million to SR 200 million.

On top of these, all businesses have to get a license from MISA and supporting letters from government entities such as PIF, SAGIA, etc.

You may also require some investment from local investors for certain sectors. For example, the real estate and finance sectors need a minimum of 25% Saudi investment.

Steps to Set Up a Company in Saudi Arabia

To set up and operate a business in the Kingdom of Saudi Arabia, investors need to follow the given steps:

Step 1: Apply for a Foreign Investment License with MISA

Draw up a business plan, contracts, and financial statements. With the help of these documents that map out your business plan, apply for a license with the Ministry of Investment Saudi Arabia (MISA). Once you have this in hand, it is time to register your business.

Step 2: Register Your Business

If you are intending to set up an LLC, you will need a unique name for your company. Check the availability of the name you pick in the Ministry of Commerce and Investment (MOCI) portal. The name you select should be Arabic or contain Arabized words. Make sure to avoid any sensitive terms.

If your chosen name is available, register the business with the MOCI. You may also need to obtain a Commercial Registration for your business.

Step 3: Apply for the Required Approvals and Licenses

After the business registration process is complete, it is time to apply for sector-specific licenses and permits. The licenses available are meant for:

  • offering a certain business service,
  • entrepreneurial purposes,
  • setting up and operating an industry,
  • agriculture and associated purposes,
  • real estate development,
  • trading in the financial market,
  • mining, and
  • freelance consulting.

The license you opt for will vary as per the scope of the company and the industry it plans to operate in. Plus, as a business, you will also need to avail permits and approvals specific to your industry.

Step 4: Open a Corporate Bank Account

After the business registration is complete, it is time to set up a corporate account for your business. Choose a bank for your business and apply for a corporate account with the necessary documents.

Step 5: Register for Taxes and ZATCA Compliance

The next thing on the to-do list is getting registered as a tax-paying business. This includes the VAT and ZATCA (for invoicing).

Step 6: Hiring Employees and Work Visas

Once the documentation for your business is complete, all that is left to do is hire workers. You can do this from the skilled workforce present in Saudi Arabia or abroad. Further, if you are setting up a branch office, you can transfer employees from another branch.

While there are no such restrictions on hiring local workers, when hiring from abroad you need to facilitate a work or business visa for KSA (Kingdom of Saudi Arabia) on behalf of your workers.

With the Saudi e-Visa application, you get a business visa for KSA in a few easy steps. These include:

  • Use a valid passport (6 months beyond the date of departure) to apply for the business visa for KSA.
  • Fill out the online form available for Saudi e-Visa application.
  • Upload all requested documents.
  • Double check the details and click apply.
  • Complete payment with debit/credit card.

Further, employers who aim to provide sponsorships for their employees applying for the Saudi e-Visa application need to apply with

  • The Ministry of Interior for Saudi Arabia
  • The Ministry of Labor

Both ministries work together to issue an Iqama or residence permit for your workers.

Business Challenges and Solutions

Operating a business in a foreign land often comes with certain challenges. For investors in Saudi Arabia these include:

  • An economy that is easily affected by oil price fluctuations.
  • Cultural differences in terms of local customs.
  • Administrative, regulatory, and labor law challenges.
  • Looking for local partners for certain business domains.
  • Hiring local talent to meet Nitaqat quotas.
  • Stiff market competition in Saudi Arabia.

To address these, Saudi Arabia has set out to bridge the gap between foreign and domestic businesses with their new Investment Law. Further, some solutions to meet the above challenges are:

  • Partner with properly vetted firms and individuals.
  • Retain lawyers to navigate your way through laws and regulations.
  • Meet the Nitaqat quotas early by hiring locally.
  • Conduct proper market research before setting up your business.
  • Train employees to learn the culture of Saudi Arabia.

Benefits of Doing Business in Saudi Arabia

In spite of the stiff competition, businesses are looking at Saudi Arabia as their destination. The main reasons that make KSA a great place for a new business are:

  • High purchasing power of the Saudi population.
  • Government support towards creating a conducive business environment.
  • Availability of financial institutions to raise capital.
  • Low tax rates.
  • Presence of proper infrastructure to set up industries.
  • Economic stability of the nation.
  • Ability to invest in a number of sectors.

Investing in Saudi Arabia's Business Sphere

With its dynamic economy and wide consumer market, Saudi Arabia is a profitable market for companies. Further, the new Investment Law aims to streamline the market more and introduce regulatory parity between foreign investments and home grown businesses.

To add, a little professional help from business consultants will not go amiss when setting up in Saudi Arabia. Evaluate the market for investment opportunities and set up profitable, innovative business ventures.

Explore the entrepreneurial opportunities in Saudi Arabia with a business visa for KSA.

 
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