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How Can Expats Own 100% Of Their Business In Saudi Arabia

BusinessHow Can Expats Own 100% Of Their Business In Saudi Arabia

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.

Expats business ownership

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 Remarkably, this capital doesn’t need to remain frozen in a bank account; it can be withdrawn after the deposit is provided to authorities.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 Saudization (Nitaqat) percentage requirements set by the Ministry of Labor and Social Development (MLSD). They should also provide a plan for Saudi nationals to hold key positions within the first five years, emphasizing senior executive management roles.

Workforce Training

The company must offer annual training to at least 30% of its Saudi employees, a substantial increase from the previous 15% requirement.

Meeting Conditions

Within the initial five years, foreign investors must fulfill at least one of three conditions: manufacturing, R&D investment, or establishing logistics centers and after-sales services. The specifics of these conditions may vary, making clarity essential.

Exemption for Significant Investment

Companies investing SAR 300 million (about US$80 million) within the first five years may be exempt from the preceding conditions.

This comprehensive guide demystifies the license conditions for establishing a 100% foreign-owned LLC company in Saudi Arabia. With this information, foreign investors can confidently navigate the path to success in the Kingdom.

Unlocking 100% Foreign Ownership in KSA: Capital Requirements Unveiled

Are you ready to enter the capital requirements for starting a 100% foreign-owned LLC company in Saudi Arabia? Let’s get started.

The Basics

The Ministry of Investments of Saudi Arabia, previously known as SAGIA, mandates that foreign investors must have a minimum share capital of SAR 500,000. The exciting part? This share capital usually doesn’t need to be locked away in a local bank. Instead, it should be reflected on the company’s balance sheet and used as working capital.

Diverse Capital Requirements

Now, here’s where it gets interesting. Depending on the type of business, MISA prescribes different minimum