Can Foreigners Own 100% of a Company in Saudi Arabia?هل يمكن للأجانب امتلاك 100% من شركة في السعودية؟

One of the most common questions from international investors is whether foreigners can own 100% of a company in Saudi Arabia. The definitive answer is yes—in the majority of economic sectors, 100% foreign ownership is now permitted under Saudi law. This page provides a comprehensive explanation of the legal framework, eligible sectors, and requirements for establishing a fully foreign-owned company in the Kingdom.

Legal Basis for 100% Foreign Ownership

The legal foundation for foreign ownership in Saudi Arabia is established through several key regulations:

Foreign Investment Law

The Foreign Investment Law, issued by Royal Decree No. M/1 dated 05/01/1421H (corresponding to April 2000), provides the primary legal framework allowing foreign investors to own businesses in Saudi Arabia. This law grants foreign investors the right to invest in the Kingdom and own shares in Saudi companies.

Implementing Regulations

The Ministry of Investment of Saudi Arabia (formerly known as MISA/SAGIA) issues implementing regulations that specify:

• Which activities are open to foreign investment
• Ownership percentages permitted by sector
• Licensing requirements and procedures
• Capital and operational requirements

Vision 2030 Reforms

Under Vision 2030, Saudi Arabia has significantly liberalized foreign investment rules. The Kingdom has removed foreign ownership restrictions from the majority of economic activities, making it one of the most open investment destinations in the Middle East.

Eligible Sectors and Activities

The vast majority of business activities in Saudi Arabia are now open to 100% foreign ownership. Eligible sectors include:

Service Sectors

• Information technology and software development
• Management consulting and professional services
• Engineering and architectural services
• Marketing and advertising
• Education and training services
• Healthcare and medical services

Industrial and Manufacturing

• Manufacturing and production facilities
• Industrial equipment and machinery
• Food processing and packaging
• Pharmaceutical manufacturing
• Construction materials

Trade and Commerce

• Wholesale and retail trading
• Import and export activities
• E-commerce and digital platforms
• Distribution and logistics

Tourism and Entertainment

• Hotels and hospitality
• Restaurants and food services
• Entertainment venues and events
• Travel and tourism services

Role of the Ministry of Investment of Saudi Arabia

The Ministry of Investment of Saudi Arabia is the primary government authority responsible for foreign investment in the Kingdom. Its role includes:

All foreign investors must obtain a license from the Ministry of Investment of Saudi Arabia before registering their company with the Ministry of Commerce. The investment license specifies the activities the foreign company is authorized to conduct and any conditions attached to the investment.

Licensing and Compliance Requirements

Establishing a 100% foreign-owned company in Saudi Arabia requires meeting specific requirements:

Documentation Requirements

• Commercial registration certificate from the investor's home country (attested)
• Audited financial statements for the past 1-2 years
• Board resolution approving investment in Saudi Arabia
• Passport copies of shareholders and proposed managers
• Detailed business plan for Saudi operations
• Power of Attorney (if using a representative)

Capital Requirements

Minimum capital requirements vary by activity:

• Service activities: Generally no minimum capital requirement
• Trading activities: May require SAR 500,000 or more
• Industrial activities: SAR 1 million to SAR 5 million depending on scale
• Contracting: SAR 500,000 to SAR 2 million
• Real estate development: SAR 30 million

Ongoing Compliance

• Annual license renewal with the Ministry of Investment of Saudi Arabia
• Commercial Registration renewal with Ministry of Commerce
• Tax and VAT compliance with ZATCA
• Saudization (Nitaqat) requirements for employee nationalization
• Annual audited financial statements

Restricted Sectors (Negative List)

Despite the broad liberalization, certain activities remain restricted or require Saudi partnership:

The negative list is periodically updated by the Ministry of Investment of Saudi Arabia. Some previously restricted sectors have been opened to foreign investment, and the trend continues toward greater liberalization.

Common Misconceptions

Several misconceptions persist about foreign ownership in Saudi Arabia:

Misconception 1: All sectors require Saudi partnership

Fact: Over 95% of sectors now allow 100% foreign ownership. The requirement for Saudi partners has been removed from most activities.

Misconception 2: Foreigners cannot own real estate

Fact: Foreign companies can own commercial real estate for their business operations. Residential real estate ownership has also been opened to qualified foreign investors in many areas.

Misconception 3: The licensing process is very lengthy

Fact: The Ministry of Investment of Saudi Arabia has digitized its processes. Investment licenses are typically issued within 1-4 weeks for straightforward applications.

Misconception 4: High capital requirements apply to all businesses

Fact: Many service-based activities have no minimum capital requirement. Capital requirements are activity-specific and have been reduced for many sectors.

Misconception 5: Foreign companies cannot repatriate profits

Fact: Foreign investors have full rights to repatriate profits, dividends, and capital from their Saudi investments without restrictions.

Conclusion

Yes, foreigners can own 100% of a company in Saudi Arabia in the vast majority of sectors. The Kingdom has transformed its investment environment to become one of the most welcoming destinations for foreign investment in the Middle East. With clear regulations, digital processes, and comprehensive support from the Ministry of Investment of Saudi Arabia, the path to establishing a fully foreign-owned company is well-defined and accessible.

For personalized guidance on establishing your 100% foreign-owned company in Saudi Arabia, contact CJC Group for a consultation.