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Saudi Arabia’s Vision 2030 is reshaping the nation with a host of socio-economic reforms, unlocking its economic potential. This article explores the fundamental changes, including the possibility of 100% foreign ownership for non-Saudis.
What is the Role of Vision 2030 in New Conditions
Vision 2030 is a pivotal project ushering in a new era of business opportunities in Saudi Arabia. It extends the privilege of 100% ownership to foreign nationals, enabling them to own and operate companies in the Kingdom.
Benefits for Expatriates
Before Vision 2030, many expatriates aspired to establish businesses in Saudi Arabia. Now, thanks to the reforms initiated by HRH King Salman Bin Abdulaziz Al Saud and HRH Crown Prince Muhammad Bin Salman, foreign-owned companies can operate without the need for a local partner.
Benefits for Saudi Arabia
These initiatives have earned Saudi Arabia recognition as one of the top reformers in the G20 by the World Bank. The changes affect four key pillars, enhancing the nation’s business environment and attracting global entrepreneurs, innovators and investors worldwide. Giving investors a chance to access previously untapped opportunities in the large and growing economy.
Major Changes in Business Ownership for Expatriates
In the past, Saudi Arabia mandated a minimum of 25% national ownership in foreign businesses. However, in September 2015, SAGIA, now the Ministry of Investments of Saudi Arabia (MISA), made a groundbreaking announcement. It allowed foreign nationals to hold 100% ownership in retail and wholesale businesses, a significant shift from the previous 75% limit.
In 2016, the KSA Government endorsed the rules and regulations for establishing 100% foreign-owned limited liability companies (LLCs) in the wholesale and retail sectors. This transformational move aimed to attract foreign investors.
Key License Conditions For 100% Foreign Ownership in Saudi LLCs
Let’s dive into the essential license conditions for foreign ownership:
Capital Requirement
Prospective applicants must maintain a minimum cash capital of SAR 30 million (about US$8 million). Remarkably, this capital doesn’t need to remain frozen in a bank account; it can be withdrawn after the deposit is provided to authorities.
Geographic Presence
Foreign nationals should demonstrate operations in at least three regional or international markets. While the precise definition of ‘operations’ remains somewhat unclear, it’s expected to encompass direct trade and legal presence in multiple jurisdictions.
Investment Threshold
Foreign investors are required to commit to an investment of at least SAR 200 million (approximately US$53.33 million). This includes an initial SAR 30 million over the first five years, an increase from the previous SAR 20 million requirement.
Business Structure
Companies can be structured as LLCs or branches of foreign enterprises, a significant shift from previous regulations.
Saudization Commitment
Foreign investors must pledge to meet Saudi