How to Open a Branch of a Foreign Company in Saudi Arabia

In today’s interconnected global market, expanding your business to the Middle East—particularly Saudi Arabia—is a strategic move that can open doors to immense opportunities. As the Kingdom accelerates its Vision 2030 plans, it is actively encouraging foreign investment, making it the perfect time to establish a branch of your foreign company there.

This blog provides a complete guide to opening a branch of a foreign company in Saudi Arabia, from legal requirements to documentation, costs, and timelines. Whether you're in tech, construction, services, or manufacturing, this article will help you take the first step into the Saudi market confidently.

Why Expand Your Business to Saudi Arabia?

Saudi Arabia is the largest economy in the Middle East and among the top 20 globally. With its strategic geographic location, strong infrastructure, government reforms, and tax incentives, it has become a magnet for global investors.

Some compelling reasons to set up a branch include:

• 100% foreign ownership in most sectors

• No personal income tax

• Access to a large local and regional market

• Reforms promoting ease of doing business

• Significant opportunities under Vision 2030 sectors (tourism, logistics, entertainment, and renewable energy)

Opening a branch rather than a new company also allows you to maintain the legal identity of the parent company, which can streamline branding, licensing, and compliance.

Types of Foreign Business Entities in Saudi Arabia

Before opening a branch, it’s important to understand the different types of business structures available for foreign investors:

1. Limited Liability Company (LLC)

This is the most common form, ideal for foreign companies wanting local flexibility.

2. Foreign Branch Office

This allows a foreign company to conduct commercial activities in the Kingdom under its parent company’s name.

3. Representative Office (Technical and Scientific Office)

This setup is more for marketing or liaison activities and is not allowed to engage in direct commercial transactions.

For those seeking full operational rights while retaining the parent company’s legal identity, a foreign branch office is the most relevant option.

Requirements to Open a Foreign Company Branch in Saudi Arabia

Opening a branch requires meeting certain legal, financial, and procedural criteria. Below is a breakdown of the key requirements:

1. Commercial Registration (CR)

You must register your branch with the Ministry of Commerce and Investment (MoCI) and obtain a Commercial Registration Certificate.

2. SAGIA License (Now MISA – Ministry of Investment Saudi Arabia)

Your branch must be licensed by the Ministry of Investment (MISA). This license authorizes foreign investment and operations in the Kingdom.

3. Parent Company Documents

Documents from the parent company, notarized and attested by the Saudi Embassy in your country, include:

• Certificate of Incorporation

• Articles of Association

• Board Resolution approving the branch

• Power of Attorney in favor of the local manager

4. Local Office Address

A valid local address is required for official communication and inspections.

5. Appoint a Branch Manager

You must appoint a Saudi-resident manager to act as the legal representative of the branch in the Kingdom.

Step-by-Step Guide to Opening a Foreign Branch

Step 1: Prepare Parent Company Documentation

Collect and legalize all required documents such as:

• Parent company CR

• Board resolution to open a branch in KSA

• Appointed manager’s ID and details

• Power of Attorney

Ensure these are notarized in your home country and attested by the Saudi Embassy.

Step 2: Apply for the MISA License

Submit an online application via the MISA portal. This includes details about:

• Nature of business

• Proposed capital investment

• Parent company background

Approval usually takes 5–10 business days if documentation is complete.

Step 3: Obtain the Commercial Registration

After receiving MISA approval, apply for the Commercial Registration (CR) with MoCI. This makes your branch legally recognized within the Kingdom.

Step 4: Register with the Chamber of Commerce

Membership is required for local business operations and trade authorizations.

Step 5: Open a Bank Account

Open a local corporate bank account under the name of the branch. This is necessary for transactions, salary payments, and tax filings.

Step 6: Get ZATCA Tax Registration

Register your branch with the Zakat, Tax and Customs Authority (ZATCA) for VAT and corporate tax purposes.

Cost of Opening a Branch in Saudi Arabia

The total cost depends on the business activity, license type, and professional services used. However, here’s a rough estimate:

• MISA License: SAR 2,000 – SAR 62,000 (varies by sector)

• Commercial Registration: SAR 1,200 – SAR 2,500

• Notarization and Attestation: SAR 5,000 – SAR 15,000

• Legal and Consulting Fees: SAR 10,000 – SAR 30,000+

• Office Space: Varies by city

Budgeting between SAR 30,000 to SAR 100,000 (USD 8,000 to USD 27,000) is typical for most industries.

Taxation for Foreign Branches in Saudi Arabia

Foreign branches are taxed at 20% corporate income tax on net profits. If your branch has Saudi partners, it may also be subject to Zakat (religious wealth tax). VAT is 15% and must be collected on taxable supplies.

Hiring staff? Be aware of Saudization requirements, which mandate a certain percentage of Saudi nationals in your workforce.

Compliance and Ongoing Requirements

Once your branch is established, you must:

• Renew licenses annually

• File tax returns and financial statements

• Maintain proper employee records

• Comply with Saudization and labor laws

• Keep your office address updated with authorities

Staying compliant is key to avoiding fines, license suspension, or deportation of foreign staff.

Comparison: Branch in Saudi Arabia vs. Freelancing in UAE

Many entrepreneurs and small business owners consider freelancing in the UAE, particularly in Dubai, due to the freelance visa UAE and freelance license Dubai options.

Freelancing in UAE

• Ideal for solo professionals (designers, IT, marketers, writers)

• Requires freelancer visa cost in UAE, which ranges from AED 7,000–15,000 annually

• Freelance visa UAE price includes license + residency + medical

• Limited scalability compared to opening a full branch

Branch in Saudi Arabia

• Suited for companies looking to expand operations

• More complex licensing and setup

• Higher capital requirement, but greater access to larger contracts and clients

If you’re currently operating under a freelance license in Dubai and considering expansion, setting up a foreign branch in KSA can be your next big move.

FAQs: Opening a Foreign Company Branch in Saudi Arabia

Q1. Can a foreign branch own property in Saudi Arabia?

Yes, but only for business purposes such as office premises, staff accommodation, or warehousing. Residential property for investment is generally restricted.

Q2. How long does it take to open a branch in KSA?

Typically, it takes 6 to 8 weeks, depending on how quickly documents are prepared and approved. Delays can occur during attestation or license approvals.

Q3. Do I need a Saudi sponsor to open a branch?

No, a foreign company can now fully own its branch without a local sponsor, especially after recent investment reforms. However, engaging a local consulting firm is recommended to navigate regulations efficiently.

Conclusion

Expanding your business by opening a branch of a foreign company in Saudi Arabia is not only possible, it’s also highly encouraged by the government. With 100% foreign ownership, tax incentives, and access to a booming economy, Saudi Arabia is an excellent gateway to the GCC and broader MENA region.

While the process may seem complex, breaking it down into manageable steps—starting from documentation to licensing and compliance—can make it much more straightforward. Whether you're transitioning from a freelance visa UAE setup or scaling a regional enterprise, this move could unlock significant growth for your business.

Need help? Consult a local business setup advisor or legal consultant in Saudi Arabia to get started with ease.