25 February 2024
Table of Contents
- Key Guiding Principles
- Key Investment Sectors
- License Categories
- Service Licenses
- Industrial Licenses
- License for a Scientific and Technical Office
- Real Estate License
- Temporary Licenses for the Performance of a Government/Semi-Government Contract
- Entrepreneurs License
- Consultancy Licenses for engineering Offices
- Commercial License (100% foreign ownership)
- Commercial License with Saudi Shareholder
- License for Transport
- Licensing of Audiovisual Media
- Licensing of Printing and Publishing
- Professional License with Saudi Shareholder
- Agricultural License
- Mining License
- License Issuance Service for Beneficiaries of the Corrective Period for the National Program to Combat Commercial Concealment
- License for Regional Headquarter (RHQ)
- List of Businesses Excluded from Foreign Investment
- Specific Capitalization and Shareholding Requirements
- The Incorporation Process
- Special Economic Zones
- Brief Tax Considerations
FOREIGN INVESTMENT OVERVIEW
The Kingdom of Saudi Arabia has become one of the major destinations for foreign companies due to the numerous business opportunities available across several sectors and industries, which are driven by the Saudi government vision to diversify the national economy and make it far less dependent on oil revenues but also the willingness of the local authorities to make the market far more attractive in terms of adopting best international legal and business practices through the overhauling of its entire legislative and investment infrastructure and make it more business conducive and friendly through the opening of further sectors (e.g. audiovisual, oil exploration, entertainment, IT & new technologies etc…). This immense project of placing Saudi Arabia on the international business scene as a major player is underpinned by a strategic vision called the Vision 2030 and other key principles.
- Investment Principles and Policies
The key principles underlying the Saudi Vision 2030 and the whole of the Saudi foreign investment policy are summarized below:
- Ensure equality between Saudi and non-Saudi investors, and among foreign investors and allow the latter the broadest and fastest access to all sectors of activity and governmental services.
- Ensure the protection of investments, in line with the Kingdom’s laws and regulations and its commitments following its accession to the World Trade organization (WTO) in 2005.
- Ensure transparency in the investment processes and procedures and treatment of foreign investments.
- Secure the provision of investment incentives in a transparent manner and solid legal protection to ensure that foreign investors have the level of comfort needed to inject funds in the Kingdom.
- Maintain environmental and social standards in order to ensure that Saudi and foreign investors comply with the applicable laws and regulations regarding labor, health, and environmental safety and in line with best international practices and treaties to which Saudi Arabia has become a party.
- Facilitate entry procedures for foreign employees including technicians, consultants, experts through the implementation of several initiatives aimed at streamlining the recruitment and entry processes (e.g. temporary work visa regulations, sponsoring of employees’ siblings and relatives, Golden residency etc…).
- The foreign investors can arrange the residency visa and permits for its offices’s employees and dependent, to facilitate their participation in the licensed activities of the company in accordance with the Kingdom’s regulations and its international obligations.
- Transfer and localize science and technology resulting from foreign direct investment in accordance with the Kingdom’s international obligations.
- Adoption of modern laws aimed at aligning the Kingdom on best international practices (e.g. IP laws, Civil Transaction Law, Electronic Transaction Law, Cloud Computing Framework, Data Protection Laws, Privatization Law, Companies’ Law, Franchising Law, Commercial Agency Law, Special Economic Zones laws, Taxation and Customs laws etc…).
- Investment Sectors in Saudi Arabia
Among the most prominent sectors in which Saudi Arabia seeks to attract foreign investment are:
- Transformative industries.
- Communication and information technology.
- Education and smart education field.
- Healthcare and life sciences.
- Real estate investment, tourism, and entertainment.
- Investing in Securities and Bank Deposits.
- Sports.
- Infrastructure and Construction (e.g. NEOM).
- Licenses Available to Foreign Investors
- Service License
A service license covers a wide range of activities and sectors including, but not limited to construction, information technology, tourism, training and consulting, health care, insurance and re-insurance, education, advertising and media, logistics, event and exhibitions planning and organization, catering and food services, financial services, aviation and handling services, etc.).
The requirements of a service license in terms of documents are as follows:
- A copy of the foreign investor’s trade license/Commercial Register (CR) certificate duly legalized up to the Saudi embassy in the originating country or apostilled (assuming the originating country is a party to the La Haye Convention on Apostilles).
- Financial statements for the last fiscal year duly legalized up to the Saudi embassy or apostilled.
- A Power of Attorney (POA) to a Saudi law firm to undertake the incorporation formalities.
- Industrial License
This license is available to all foreign investors wishing to engage in industrial activities, such as heavy and light industries and transformative industries.
The requirements of a service license in terms of documents are as follows:
- A copy of the foreign investor’s trade license/Commercial Register (CR) certificate duly legalized up to the Saudi embassy in the originating country or apostilled (assuming the originating country is a party to the La Haye Convention on Apostilles).
- Financial statements for the last fiscal year duly legalized up to the Saudi embassy or apostilled.
- A Power of Attorney (POA) to a Saudi law firm to undertake the incorporation formalities.
- License for a Scientific and Technical Office (TSO)
This license is available to foreign entities that have appointed a Saudi distributor/ commercial agent to distribute and promote their products and/or services in the Kingdom. A TSO serves, in essence, as a liaison between a foreign company, its Saudi distributor and the local market. A TSO cannot engage in commercial activities or earn revenue. Its activities are limited to: (i) providing technical information and assistance regarding the foreign company’s products to the distributor and to end users of the products, including analyzing and assisting the distributor to handle technical service problems; (ii) studying the market and preparing reports to the company’s head office; and (iii) conducting technical research in connection with the products.
The requirements in terms of documents required as the same as for a branch of a foreign company:
- Copy of the CR certificate of the mother company.
- Copy of the Articles of Association (AOA) of the mother company.
- Resolution of the Board of Directors/shareholders of the mother company to open the TSO, appoint its manager and grant the latter the requisite powers.
- Copy of the financial statements of the mother company for the last fiscal year.
- A copy of the distribution agreement/commercial agency entered into with the Saudi distributor/commercial agent.
- POA to a Saudi law firm to undertake the incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Temporary certificate to submit proposals for government projects.
Entities that need to bid for government projects can submit an application to the Ministry of Investment by requesting a temporary certificate to bid for government projects.
The documents required to obtain this license are as follows:
-A copy of the Commercial Register (CR) certificate of the company in its country of origin.
-The Financial Statements of the company for the last three fiscal years, prepared by an internationally reputable audit firm.
-The company must provide the following documents:
– copies of letters of award for at least three projects carried out by the company as the main contractor and accomplished within the last seven years. The value of each one of them should exceed the minimum value required from the contractors classified as a first degree in the Saudi Arabian Ministry of Municipal and Rural Affairs.
- a copy of the ISO 9001 certificate (valid).
- a copy of the ISO 14001 certificate or alternative certificates (valid).
- a copy of the Occupational Safety Certificate OSHAS 18001 (valid).
- confirmation confirming the reliability of the information provided, including that the person who has signed the documents is authorized to do so on behalf of the company.
- A power of attorney (POA) to a Saudi law firm to carry out the incorporation process.
All of the above documents must be duly legalized up to the Saudi embassy or apostilled.
- Real Estate License
This license is available to foreign companies in the real estate sector provided that the total value of the project, in terms of both land and construction, is not less than 30 million Saudi riyals and the investment and project is located outside of Mecca and Medina.
The documents required to apply for this license are set out below:
-A copy of the commercial registration (CR) certificate/trade license of the foreign entity and a copy of the national identity, if one of the shareholders is a natural person holding the nationality of one of the GCC countries.
-Financial statements of the last fiscal year of the foreign entity.
-A power of Attorney (POA) for a Saudi law firm to undertake the incorporation formalities.
The above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Temporary licenses for the performance of a government/ semi-government contract
This license is available to foreign entities that do not have a foreign investment License for the contract activity, for which a government or semi-government contract is awarded. This license shall expire upon the finalization of the project for which the license was awarded.
- Entrepreneurs License
This type of license is available to business leaders who wish to establish emerging technological, and innovative start-up companies capable of expansion and growth to provide a better and different product or service in the Saudi market and can avail themselves of the sponsorship of Saudi universities or Saudi business incubators.
The documents required to apply for this license are as follows:
-Resolution of the Board of Directors expressing the desire of the entrepreneur to apply for and obtain a license.
-A letter of support from the sponsoring authority (Saudi universities or business incubators) within the Kingdom specifying the name of the project, the required activity, ownership data and contact information for the sponsorship authority.
-A Power of Attorney for a Saudi Law firm to apply for and obtain the relevant license.
- Commercial License
This license is available to all foreign entities wishing to engage in direct (i.e. not through a Saudi commercial agent/distributor) trading activities in the Kingdom. The foreign entity may choose to establish an entity with a Saudi partner or a wholly owned subsidiary.
-Commercial license with Saudi shareholder
This Service is provided to foreign entities that are interested in the activity of wholesale and retail trade in the Kingdom of Saudi Arabia with a Saudi shareholder.
The documents required to establish such a joint venture company are as follows:
-A copy of the commercial registration of the foreign shareholder certified by the Saudi Embassy and a copy of the national identity, if one of the shareholders is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system);
-Financial statements of the last fiscal year of the foreign company.
-A Power of Attorney (POA) for a Saudi law firm to undertake the licensing and incorporation formalities.
All the documents to be submitted by the foreign entity must be legalized up to the Saudi embassy in the originating country or apostilled.
–Wholly Owned Subsidiary
This service is limited to foreign companies that have a presence at least in (3) regional or international markets and the minimum capital required is (30) million Saudi Riyals.
The documents required to apply for this license are as follows:
-A copy of the commercial register (CR) certificate of the foreign company for its entities operating in at least three (3) regional or international markets.
– Financial statements of the foreign company for the last fiscal year.
– A Power of Attorney (POA) for a Saudi law firm to undertake the licensing and incorporation formalities.
- Transport License
This license is available to foreign companies that wish to provide public land transport services.
The documents required to apply and obtain this license are set out below:
-Resolution of the Company’s Board of Directors expressing their intent to invest in the Kingdom of Saudi Arabia, indicating the shareholders’ names, capital, shareholders’ shares, activity, location and appointment of the General Manager and his powers.
-A Copy of the Commercial Register (CR) certificate/trade license of the foreign company.
-A proof of commitment to periods of the execution of contracts in the past five (5) years.
– Proof of the financial capability consistent with the project’s capital, the share of each shareholder and consistency with the executive action plan for the project.
-A Power of Attorney (POA) for a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Consulting License for Engineering Offices
This service is provided to foreign companies that wish to provide engineering consultation services inside the Kingdom being wholly owned by foreign firms.
The documents required to apply for and obtain this license are set out below:
-Copies of the Commercial Register (CR) certificates of the foreign entity in the same field in four (4) countries.
-Financial statements of the foreign entity for the last fiscal year.
-Power of Attorney (POA) for a Saudi law firm to undertake the licensing and incorporation formalities.
All these documents must be legalized up to the Saudi embassy in the originating country or apostilled.
- Consulting License for Technical & Economic Communication Offices
This license aims to enable countries wishing to invest in the Kingdom to study the Saudi market and prepare reports to be submitted to the concerned bodies in the country wishing to have a license.
The documents required to apply for and obtain the license are set out below:
– A resolution addressed to the Ministry of Investment from ministries, governmental bodies and competent authorities to open a technical and communication office in the Kingdom.
– A letter from the Ministry of Foreign Affairs addressed to the Ministry of Investment requesting the latter to issue a license for opening an Office of Economic and Technical Communication with a detailed work plan for the businesses and services to be provided within the Kingdom.
-A Power of Attorney (POA) to a Saudi law firm to undertake the licensing formalities.
- License for Serving Agents and Providing Workers Services
This license is available to foreign companies that wish to engage in the activities of domestic labor placement services and temporary employment agency activities for home services in the Kingdom.
The documents required to apply for and obtain the license are set out below:
– A copy of the Commercial Register (CR) certificate/trade license of the foreign shareholder and a copy of the national identity, if one of the shareholders is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign company for the 3 last fiscal years.
-Power of Attorney (POA) to the Saudi law firm to undertake the licensing formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Audiovisual & Media License
This license is available to foreign companies that wish to conduct audio and visual activities.
The documents required to apply for this license are listed below:
-A copy of the Commercial Register (CR) certificate/trade license of the foreign company and a copy of the national identity, if one of the shareholders is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign company for the last fiscal year.
-Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Printing and Publishing License
This license is available to foreign companies that wish to conduct printing and publishing activities.
The documents required to apply for this license are as follows:
-A copy of the commercial registration of the foreign company and a copy of the national identity, if one of the partners is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign company for the last 3 fiscal years.
-Copies of the Commercial Register (CR) of the foreign company in the same field in three (3) different countries.
– Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Professional license with a Saudi shareholder
This license is available to foreign companies wishing to practice professional activities in the Kingdom with a Saudi partner.
The documents required to apply for this license are set out below:
For professional partners:
-A copy of the Commercial Register (CR) certificate/trade license/professional license of the foreign company legalized up to the Saudi embassy in the originating country or apostilled.
-Financial statements of the foreign company for the last fiscal year legalized up to the Saudi Embassy or apostilled (if the company is not licensed by the Ministry of Commerce with a previous professional activity.)
-A copy of the national identity if one of the partners is a natural person (individual) holding the nationality of one of the GCC, or a copy of the national identity if one of the partners is holding the Saudi nationality and a statement issued by “ABSHAR” System to prove the profession and a copy of the professional license for each partner from the competent authority in the Kingdom.
– Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities legalized up to the Saudi embassy or apostilled.
For non-professional partners:
-A copy of the commercial registration of the foreign entity legalized up to the Saudi embassy or apostilled and a copy of the national identity, if one of the partners is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign company for the last fiscal year legalized up to the Saudi embassy or apostilled.
- Agricultural License
This license is available to foreign companies wishing to engage in agricultural activities in the Kingdom.
The documents required to apply for this license are listed below:
-A copy of the Commercial Register (CR) certificate/trade license of the foreign entity and a copy of the national identity, if one of the partners is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign entity for the last fiscal year.
– Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Mining License
This license is available to foreign companies wishing to engage in mining activities in the Kingdom.
The documents required to apply for this license are listed below:
-A copy of the Commercial Register (CR) certificate/trade license of the foreign entity and a copy of the national identity, if one of the partners is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
-Financial statements of the foreign entity for the last fiscal year.
– Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
- Regional Headquarters (RHQ) License
This license is available to multinational companies (MNCs) wishing to establish their RHQ in the Kingdom as a unit duly established under the laws of Saudi Arabia for the purpose of supporting, managing, and providing strategic direction to its branches, subsidiaries and affiliates operating in the MENA region.
The documents required to apply for this license are listed below:
-A copy of the applicant’s commercial registration or commercial license.
-Copies of at least two commercial registrations or commercial licenses issued in two different countries, excluding the Kingdom of Saudi Arabia and the country in which the headquarters of the Multinational Group is located.
-The annual audited consolidated financial statements of the last fiscal year of the applicant.
– Power of Attorney (POA) to a Saudi law firm to undertake the licensing and incorporation formalities.
All the above documents must be duly legalized up to the Saudi embassy in the originating country or apostilled.
Restrictions & Conditions
The following restrictions and conditions apply to Regional Headquarters of multinational companies (MNCs):
1. The Multinational Group has minimum presence in two different countries, excluding the Kingdom of Saudi Arabia and the country in which the headquarter of the Multinational Group is located, either through Subsidiaries or Branches.
2. The RHQ is established as a separate legal personality in the Kingdom of Saudi Arabia either as a company or as a registered branch of a foreign company.
3. The RHQ shall not directly conduct commercial operations that generate revenue other than RHQ License activities.
4. The RHQ must commence the mandatory RHQ activities* within six months of issuing the License
5. The RHQ must commence at least three optional RHQ activities** within one year of issuing the RHQ License.
6. RHQ employees carrying on mandatory RHQ License activities must have the relevant skills and knowledge developed at the headquarters or another regional headquarters of the Multinational Group, at least 3 employees of which must be of Executive Director level and Vice-President level.
7. The RHQ must employ at least 15 full time employees deployed in the conduct of RHQ activities within one year of issuing the RHQ License (including the senior level executives mentioned in point 6 above).
8. The RHQ License is subject to cancellation by the Ministry of Investment in any of the following situations: – Failure to commence the mandatory or optional RHQ License activities, or hiring the minimum number of employees, within the stipulated time periods. The cessation of any mandatory RHQ activities or a minimum of three optional RHQ activities. – The cessation of satisfying any of the RHQ License conditions by the RHQ or the Multinational Group. – Violation of any licensing regulation established by MISA constituting ‘Grounds for Cancellation’.
* The mandatory RHQ activities are the provision of strategic direction and management functions. RHQ strategic direction functions include: (a) Formulate and monitor the regional strategy, (b) Coordinate strategic alignment, (c) Embed products and/or services in the region, (d) Support acquisitions, mergers and divestments, and (e) Review financial performance. RHQ management functions include: (a) Business planning, (b) Budgeting, (c) Business coordination, (d) Identification of new market opportunities, (e) Monitoring of the regional market, competitors, and operations, (f) Marketing plan for the region, and (g) Operational and financial reporting.
** The optional RHQ activities are: (a) Sales and Marketing Support, (b) Human Resources, and Personnel Management, (c) Training Services, (d) Financial Management, Foreign Exchange, and Treasury Centre Services, (e) Compliance and Internal Control, (f) Accounting, (g) Legal, (h) Auditing, (i) Research and Analysis, (j) Advisory Services, (k) Operations Control, (l) Logistics and Supply chain management, (m) International Trading, (n) Technical Support or Engineering Assistance, (o) Network Operations for IT System, (p) Research and Development, (q) Intellectual Property Rights Management, (r) Production Management, and (s) Sourcing of Raw Materials and Parts.
- List of Businesses Excluded from Foreign Investment
Certain activities are explicitly off limits to foreign investors and are found in the so-called “Negative List” maintained and updated by the Saudi Supreme Economic Council. As at the date of this guide, the following activities are till restricted to foreign investment:
- Oil exploration, drilling, and production. Except the services related to the mining sector listed at (CPC 5115+883) in International Industrial classification codes.
- Catering to military sectors.
- Security and detective services.
- Real estate investment in Makkah and Madina.
- Tourist orientation and guidance services related to Hajj.
- Recruitment services.
- Commission agents.
- Fishing/ hunting marine living resources.
- Investment Company’s Types.
The Saudi foreign investment law seeks to encourage the entry of foreign investors into the Kingdom and has allowed for some flexibility in the choice of the vehicle to support the relevant investment. Below are some of the most common vehicles used by foreign investors to penetrate the Saudi market:
- Limited Liability Company (LLC).
- Limited Liability One-person Company.
- Joint Stock Company.
- Foreign Company Branch.
- Solidarity professional company
Moreover, through the introduction of the best international legislative and regulatory practices, the Kingdom has significantly improved the investment environment making it far more attractive to foreign investors. Set out below is a list of the key laws adopted recently to improve the business framework:
-Civil Transactions Law.
-Electronic Transactions’ Law.
-Cloud Computing Framework.
-Personal Data Protection Law.
-Franchise Law.
-Commercial Agency Law (under review and consultation).
-Privatization Law.
-Cybersecurity Law.
- Special Capitalization and Shareholding Requirements
Certain activities open to foreign investors require a high level of capitalization or the participation of Saudi shareholders as shown in the table below.
| No | License Type | Minimum Capital (SAR) ($1=SAR.3.75) | Minimum Saudi Participation |
| 1 | Commercial with Saudi Partner | 26,666,667 Foreign capital shareholding not less than SAR. 20,000,000 and percentage shareholding not more than 75% | 25% |
| 2 | 100% Foreign Ownership of Commercial Venture | 30,000,000 | |
| 3 | Communications | – | 40% |
| 4 | Communications Value Added | – | 30% |
| 5 | Insurance | – | 40% |
| 6 | Reinsurance | – | 40% |
| 7 | Property Financing | 200,000,000 | 40% |
| 8 | Property Investment | *The value of each project should not be less than SAR. 30,000,000 (covering land and construction); the land and building must be outside the perimeter of the two Holy Mosques. | – |
| 9 | Management of Construction Projects, detailed engineering & EPC Contracts | – | 25% |
| 10 | Public transport (bus transportation within cities) | 500,000 | 30% |
| 11 | Public transport (metro transportation within cities) | 500,000 | 20% |
| 12 | Joint Stock Company (JSC) | 500,000 | – |
| 13 | JSC (One Person Company) | 5,000,000 | – |
| 14 | Other Transport Activities | 10,000,000 | – |
| 15 | Digital Brokerage | 2,000,000 | – |
| 16 | Collection of Financing Agencies Debts | 10,000,000 | – |
- The Incorporation Process
The graph below illustrates the steps through which the incorporation of the subsidiary or branch of a foreign company goes:
- The Special Economic Zones
In an attempt to attract companies with value added products and services in several sensitive sectors, the Saudi Economic Cities and Special Zones Authority has established five Special Economic Zones (SEZ) allowing foreign investors to benefit from significant tax exemptions.
Below is a list of these SEZs with the activities and tax exemptions available therein:
1-King Abdullah Economic City
Authorized activities
- Automobile supply chain and assembly
- Consumer goods
- ICT (Electronic light manufacturing)
- Pharmaceuticals
- MedTech
- Logistics
Available Tax Exemptions and other Advantages
Alongside the supply of world-leading infrastructure and utilities, KAEC SEZ offers unique commercial incentives as foundations for success for investors and companies:
– 5% Corporate Income Tax for up to 20 years.
– 0% customs duties deferral for goods inside the SEZ.
– 0% VAT for all intra-SEZ goods exchanged within the zone and between zones.
– 0% withholding tax permanently for repatriation of profits from SEZ into foreign countries.
-Flexible and supportive regulations around foreign talent during first 5 years Expat levy ensuring fees exemption for employees and their families in the zone.
2-RAS AL -KHAIR SEZ
Authorized Activities
- Shipbuilding and MRO.
- Rig platforms and MRO.
Available Tax exemptions and Other Advantages
Same as those available in KAEC.
3-JAZAN SEZ
Authorized Activities
- Food Processing
- Metal conversion
- Logistics
Available Tax Exemptions and other Advantages
Same as those available in KAEC.
4-Cloud Computing SEZ
Authorized Activities
Cloud Computing Services
Available Tax Exemptions and other Advantages
-Special tax treatment in line with OECD principle that avoids double taxation and accommodates CSPs operating mode.
– Expat levy ensuring fees exemption for employees and their families in the zone.
– Affordable network connectivity and electricity prices. Electricity available at a competitive rate of 0.05 USD/kWh for businesses.
– Flexibility to provide cloud computing services from the zone, with the ability to build and operate data centers from all over the Kingdom.
5-Special Integrated Logistics Zone (SILZ)
Authorized Activities
- Consumer products
- Computer parts
- Pharmaceuticals
- Nutritional and medical supplies
- Aerospace spare parts
- Luxury goods, jewelry, and precious metals
Available Tax Exemptions and other Advantages
-0% Corporate Income tax.
– VAT exemptions.
– Withholding tax exemptions
– Remittance tax exemptions
– 50-year tax relief period
-VAT exemptions for goods under customs suspension
-0% VAT on servicing or manufacturing and assembly
- Brief Tax Considerations
There is no personal income tax in Saudi Arabia.
A flat income tax rate of 20% is applied to the tax-adjusted profit of resident non-Saudi and non-GCC individuals.
Non-residents who do not have a legal registration or a permanent establishment in Saudi Arabia are subject to withholding tax on their income derived from a source in Saudi Arabia. A Saudi resident entity must withhold tax from payments made to such non-residents with respect to income derived from Saudi Arabia. This rule applies regardless of whether the Saudi entity is a taxpayer. The withholding tax rates are:
- management fees are taxed at 20%.
- dividends, interest, rent, payments made for technical and consulting services, payments for air tickets, freight or marine, shipping, international telephone services, and insurance or reinsurance premiums are taxed at 5%.
- royalties, payments made to head office or an affiliated company for services and payments for other services are taxed at 15%.
- all other payments are taxed at 15%.
Cyrille Naffah, founder of The Edge Law Firm, has over 28 years of experience in Saudi Arabia, Lebanon, and United Arab Emirates. Cyrille is an International Business Lawyer (corporate commercial) and is the promoter of Legal Tech contractual solutions. Cyrille is fluent in English, French and Arabic.
Phone number: +961 3 161 119
E-mail address: cyrille.naffah@edgelf.com
LinkedIn: https://www.linkedin.com/in/cyrille-naffah-16421b6/
Karen Raad, legal associate at The Edge Law Firm, is persuing her advanced studies in International Business Law. Karen is fluent in English, French and Arabic.
Phone number: +961 76 528 451
E-mail address: karen.raad@edgelf.com
LinkedIn: https://www.linkedin.com/in/karen-raad-567256262/
Lea Wazen, legal associate at The Edge Law Firm, is persuing her advanced studies in Intellectual Property law. Lea is fluent in English, French and Arabic.
Phone number: +961 78 846 934
E-mail address: lea.wazen@edgelf.com