A comprehensive guide to setting up a company with a foreign partner in Saudi Arabia: permitted ownership ratios, foreign investment license requirements, steps and costs.
In order to expand investment horizons in the Kingdom, Saudi citizens are now permitted to include foreign investors in their company ownership structure. More specifically, it is now possible to establish a company with a foreign partner in Saudi Arabia across most sectors, subject to controls governing the foreign partner's entry such as the type of investment, minimum investment value, and the ownership percentage the foreign partner is allowed to hold.
In this guide, we review the types of companies available for foreign partnerships, permitted activities and ownership ratios, and the steps, requirements, and costs of incorporation step by step.
Types of Companies That Can Be Established with a Foreign Partner in Saudi Arabia
Limited Liability Company (LLC)
The most popular choice, as it can be established with a limited number of partners and is distinguished by ease of management and clarity in distributing responsibilities between Saudi and foreign parties.
Joint Stock Company
The best option when seeking to establish a company with a foreign partner for large-scale projects in the Kingdom, given its high capital requirements.
Representative or Consultancy Office
Established by Saudi nationals with a foreign partner, suitable for non-profit activities such as conducting studies and market research, and often used as a preparatory phase before entering the market.
It is worth noting that each legal form has its own advantages and requirements, so it is important to study the options carefully. Rapture Business Solutions experts are ready to guide you in choosing the most suitable legal structure in full compliance with all applicable regulations in the Kingdom.
Activities Permitted for Company Formation with a Foreign Partner and Ownership Ratios
Under the economic openness driven by Vision 2030, Saudi citizens can now partner with foreigners in most investment sectors, though controls vary by sector:
First: Sectors Prohibited for Foreign Partnerships
Such as the oil sector (exploration and production) and the military manufacturing sector.
Second: Sectors with a Maximum Foreign Partner Ownership Cap
Third: Sectors with Free Ownership Ratios by Partner Agreement
Steps to Establish a Company with a Foreign Partner in Saudi Arabia
Apply through the Ministry of Investment's platform, attaching required documents such as the certified Commercial Registration of the foreign company, the partnership resolution, business activity description, and business plan.
Through the Ministry of Commerce website, ensuring the name complies with regulations and does not duplicate existing names.
Includes partner details, shareholding ratios, profit distribution mechanism, management powers, dispute resolution procedures, and is notarized electronically.
Opened in the company's name and the capital is deposited according to specified requirements.
After completing all procedures and notarization, the Commercial Registration is officially obtained from the Ministry of Commerce.
Includes ZATCA, GOSI, the Qiwa platform for human resources, and the relevant municipal or urban authority.
Steps for the Foreign Partner to Obtain the Investment License
A company cannot be established with a foreign partner in the Kingdom until the foreign partner first obtains a foreign investment license, by creating an account and registering on the Ministry of Investment's platform, then submitting a license application meeting the following requirements:
Requirements for Foreign Individual Investors
Requirements for Foreign Corporate Investors
Activity-Specific Conditions
Financial Requirements for Obtaining the Investment License
Requirements for Establishing a Company with a Foreign Partner in Saudi Arabia
The foreign partner must meet the following conditions:
Costs of Establishing a Company with a Foreign Partner in Saudi Arabia
Fees vary depending on the type of activity and the legal form of the company, and may range from a few thousand to tens of thousands of Saudi Riyals. The total cost is affected by:
Rapture Business Solutions provides you with an accurate fee calculator to compute the costs of establishing a company with a foreign partner with complete accuracy and transparency.
Rapture Business Solutions Helps You Establish a Company with a Foreign Partner Easily
At Rapture Business Solutions, we have all the tools needed to complete your foreign partnership successfully:
In light of Saudi Arabia's ongoing economic developments, establishing a company with a foreign partner has become a promising opportunity for investment and growth in a market with an advanced and supportive regulatory environment. With diverse legal forms and organized procedures, investors can choose the most suitable structure for their business aligned with their strategic goals. Compliance with legal requirements and a precise understanding of the steps remain fundamental to a successful incorporation phase — and Rapture Business Solutions is here to help you complete your business with ease.
Most Common Questions About Foreign Partnerships in Saudi Arabia
What are the conditions for foreign investment with a Saudi partner?
Key conditions include: the foreign partner obtaining an investment license from the Ministry of Investment, proving financial capacity and good reputation, and ensuring the business activity is open to foreign participation.
What are the requirements for a foreign investor to obtain a Commercial Registration in Saudi Arabia?
Obtaining a valid investment license from the Ministry of Investment, ensuring the activity is among permitted ones, submitting official documents such as company data, articles of association and proof of identity, and meeting the minimum capital threshold based on activity type.
Are foreigners allowed to open a company in Saudi Arabia?
Yes, foreigners can establish companies with 100% full ownership in many sectors without a Saudi partner, while other sectors such as trade, distribution, and healthcare require a Saudi partner at a specified ratio.
What is the permitted ownership percentage for a foreign partner in Saudi companies?
Up to 100% in sectors such as manufacturing and information technology, up to 75% in trade, distribution, and logistics, and 49% in some healthcare and transport activities.
What are the fees for a foreign investor in Saudi Arabia?
Fees vary by company type, legal form, and activity, and include investment license fees, Commercial Registration, notarization, and publication fees. Rapture Business Solutions experts can determine exact fees through their fee calculator.
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