Start a Business in Saudi Arabia: GEOS Guide for Global Expansion

This article is apart of our weekly series associated with the The Global Subsidiary Index. The series is designed to help businesses identify the best countries for establishing a subsidiary based on key operational factors. GEOS provides a data-driven ranking of jurisdictions worldwide, assessing across 40+ criteria to bring you insights into global expansion opportunities.

Each country on the index is scored on an overall score out of 100, with each individual criterion out of 5 or 10. Higher scores indicate a more favorable environment for businesses. By leveraging these insights, companies can make informed decisions on where to establish a legal presence.

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Saudi Arabia is no longer a future market. Business in Saudi Arabia is moving quickly, backed by Vision 2030, large-scale investment, and a clear push into technology, manufacturing, and data-driven growth.

KPMG notes that the Kingdom is outpacing many peers in turning data and analytics investment into real performance, while the startup ecosystem is expanding at speed, with strong growth, rising company formation, and multiple unicorns.

At the same time, market entry still runs on structure. Licensing, workforce planning, banking, and compliance all matter from day one. This guide walks through what it actually takes to set up and operate in Saudi Arabia, so expansion plans match how the system works on the ground.

Why Should You Expand to Saudi Arabia?

Saudi Arabia runs the largest economy in the Middle East, and it’s in the middle of a long, deliberate shift. Oil still matters, but it no longer tells the full story.

Vision 2030 keeps pushing investment into new sectors, which creates steady demand for foreign companies that can support modernization, scale, and large delivery programs. The evolving business environment, shaped by recent legal reforms and economic incentives, makes Saudi Arabia an increasingly attractive destination for new businesses and foreign investment.

The GEOS Global Subsidiary Index score of 62.4 reflects that mix. Business in Saudi Arabia offers real market scale, strong financial resources, and policy stability. Saudi Arabia’s Vision 2030 programme focuses on economic diversification away from oil dependency. At the same time, foreign companies still need to work within structured licensing and compliance frameworks.

The Middle East’s Largest Economy Is Moving Fast

Saudi Arabia’s GDP per capita reached USD 35,121.7 in 2024, earning a 9/10 score. High purchasing power is closely tied to government spending, which continues to fuel demand across infrastructure, tourism, digital services, healthcare, and energy transition programs.

For foreign companies, that often translates into a familiar pattern: bigger opportunities, but more steps to reach them. In practical terms, you’ll usually see:

• Larger contract sizes once approvals land
• Longer sales and procurement cycles
• Consistent demand for specialized expertise

Growth Continues Beyond Oil

Saudi Arabia posted 2.0% GDP growth in 2024, scoring 4/5. Lower oil prices and production caps softened headline growth, but the non-oil economy still expanded.

Economic diversification remains a key strategic goal under Vision 2030, with the country actively working to reduce its reliance on oil by developing sectors such as tourism, construction, and technology.

In 2023, the non-oil sector accounted for 50% of Saudi Arabia’s GDP, reflecting this strong commitment to economic diversification. Tourism, construction, and services keep moving forward, supported by mega-projects and major international events tied to Vision 2030. A few non-oil drivers stand out:

• Tourism growth of roughly 10% year over year
• Ongoing investment in construction and infrastructure
• Expansion across service-based and digital sectors

Oil production is expected to rise gradually, which can lift government revenues without undoing the broader diversification push.

Policy Stability Supports Long-Term Planning

Saudi Arabia’s centralized governance model supports continuity, reflected in a 4/5 political risk score. With no election cycles to reset priorities, policy direction tends to stay consistent across regulators and state-backed institutions. To do business in Saudi Arabia, that often means:

• Fewer abrupt policy swings
• Clear signals around priority sectors
• Predictable direction, even when approvals take time

A More Diversified Economic Base

Saudi Arabia scores 4/5 for industry diversity, as growth keeps extending beyond hydrocarbons. Fintech, logistics, healthcare, AI, electric vehicles, and digital services all receive targeted support. The Public Investment Fund plays a major role by directing capital toward sectors viewed as strategically important.

New civil, commercial, and investment laws also aim to strengthen regulatory certainty and attract more foreign investment. Recent regulatory reforms and incentives are specifically designed to attract multinational companies to Saudi Arabia.

Foreign Ownership Is Opening, With Structure

Full foreign ownership is permitted in many sectors, giving Saudi Arabia a 7/10 score for openness to foreign UBOs. Entry still depends on sector rules, licensing authorities, and compliance readiness, so companies should plan for a fairly detailed setup process.

It is essential to understand and comply with local regulations when setting up a business in Saudi Arabia to ensure legal compliance and a smooth operation. When doing business in Saudi Arabia, expect:

• Licensing and approval reviews that go beyond basic filings
• Localization and Saudization requirements
• Ongoing governance and reporting obligations

From January 2026, new Ultimate Beneficial Owner rules take effect. Companies must maintain a UBO register, confirm ownership annually, and report changes within 15 days through the Saudi Business Center. Confidentiality protections are narrower, and regulators can share UBO data with supervisory and foreign authorities.

Fiscal Capacity Remains Solid

Lower oil revenues are expected to widen the fiscal deficit to around 3% of GDP in 2024, but debt remains low at roughly 27% of GDP. Saudi Arabia continues to access capital markets with strong demand, which gives the government room to fund priority projects without aggressive tightening.

Foreign reserves remain healthy, supporting currency stability and import coverage. FDI inflows still trail Vision 2030 targets, which keeps pressure on regulators to improve investor experience and shorten approval timelines.

Global Partnerships Keep Shifting

Saudi Arabia continues to broaden its international relationships. China plays a larger role through infrastructure investment, technology partnerships, and regional diplomacy. At the same time, U.S. policy direction and regional conflicts will influence trade flows, investment sentiment, and geopolitical alignment over the coming years.

Local Expert Insight

Foreign business in Saudi Arabia is actively prioritized. Success comes down to knowing which regulator oversees your sector, how approvals work in practice, and how compliance expectations apply from day one. Timelines and documentation standards vary widely by sector, so local expertise often makes the difference between moving steadily and getting stuck.

For companies willing to plan carefully and work within the system, Saudi Arabia offers scale, capital, and long-term opportunities that few regional markets can match.

Tax & Regulatory Environment

Saudi Arabia’s tax and regulatory system is clear, but it runs on process and follow-through. Compliance can’t sit on the back burner. It needs to be part of daily operations from the start.

Government authorities play a crucial role in approving and processing residency permits and visas for board members and other personnel, making them central to the regulatory environment. Overall, the framework balances competitive tax rates with close monitoring and structured reporting.

Corporate tax and Zakat

Saudi Arabia applies different rules based on ownership, so entity structure matters right away:

• Corporate income tax: 20% on profits tied to non-Saudi and non-GCC ownership
• Zakat: 2.5% applies only to the Saudi-owned portion
• Mixed ownership: income splits between income tax and Zakat

That structure supports a Corporate Tax Rate Score of 7/10. Rates are reasonable, but ownership planning makes a real difference. Some sectors follow separate rules, including oil and hydrocarbons, which can face much higher tax rates.

Who Pays Income Tax?

When doing business in Saudi Arabia, income tax typically applies to:

• Companies with foreign ownership, directly or indirectly
• Branches and permanent establishments of foreign companies
• Non-Saudi individuals doing business in the Kingdom
• Non-residents earning Saudi-sourced income

There are no local or municipal income taxes beyond income tax and Zakat.

Filing, Payments, and Audits

Saudi Arabia uses a self-assessment system, but filings get close attention from the Zakat, Tax and Customs Authority (ZATCA). Companies should plan for a steady cadence of reporting and review, including:

• Annual tax returns filed within 120 days of year-end
• Audited financial statements for Saudi-owned and mixed-ownership entities
• Advance tax payments during the year, unless thresholds apply
• Withholding tax on certain cross-border payments, ranging from 5% to 20%

In addition to ZATCA, the General Organization for Social Insurance (GOSI) is a key regulatory body involved in social security registration and compliance checks. Both ZATCA and GOSI may review payroll data to ensure proper reporting and contributions.

ZATCA selects audit targets based on size, ownership profile, and risk indicators. Foreign-owned entities and branches often receive more scrutiny. Most audit windows span five years, but they can extend to ten if filings are missing or misleading.

VAT Is Straightforward, but Firmly Enforced

Saudi Arabia’s 15% VAT rate is among the highest globally. The rules are clear, but enforcement is firm, which contributes to a Tax & Accounting Score of 5/10. Practically, that means monthly activity and a lot of documentation.

Compliance and regulatory procedures related to business transactions are strictly monitored, making it essential for companies to ensure all business activities and records meet local requirements. Most companies will deal with:

• Monthly VAT filings
• Mandatory e-invoicing
• Detailed audit checks and reconciliations

ZATCA commonly reviews payroll data against GOSI records, payments to non-residents, and import values matched with customs declarations.

Ongoing Compliance, Not Once a Year

Between monthly VAT, annual tax returns, customs filings, and e-invoicing, compliance stays continuous. That places Saudi Arabia at a Compliance Reporting Score of 3/5. Clean records, consistent data, and timely submissions matter, because fixing gaps after the fact is tough. It is also essential to liaise with local authorities to ensure ongoing compliance with all regulatory requirements.

Data Protection and Digital Rules

Saudi Arabia’s Personal Data Protection Law sets out a strong national data framework, earning a Data Management Laws Score of 4/5. It covers:

• How personal data is collected and used
• Cross-border data transfers
• Consent, retention, and breach response

Implementing regulations are active, and enforcement sits alongside sector-specific rules from regulators such as SAMA, the National Cybersecurity Authority, and CST.

Regulatory Oversight Across the Business Lifecycle

Tax is only one part of the picture. Businesses in Saudi Arabia also deal with compliance across licensing, employment, products, and financial conduct. Common areas include:

• Commercial registration and licensing with the Ministry of Commerce
• Saudization and labor compliance under the Nitaqat program
• Product standards and import approvals through SASO and SABER
• Anti-bribery and financial crime controls

Government entities play a key role in establishing tax incentives and regulatory requirements, and businesses often need to formally engage with these entities to qualify for certain benefits.

Penalties can range from fines and shipment delays to license suspension and, in severe cases, criminal exposure.

Local Expert Insight

ZATCA actively audits VAT, withholding tax, and transfer pricing. Documentation needs to be ready upfront, not pulled together during an audit. Companies that treat compliance as part of everyday operations move faster, avoid disruption, and build credibility with regulators early.

Saudi Arabia’s tax and regulatory environment is demanding, but predictable. With the right setup, it becomes a framework you can plan around instead of a risk you react to.

Incorporation & Licensing Essentials

Most foreign businesses in Saudi Arabia should plan for an overall incorporation timeline of two to three months, assuming documents are prepared correctly and approvals move without delays. That timeline typically covers:

• Ministry of Investment (MISA) licensing
• Commercial registration
• Bank account setup
• Post-incorporation registrations across tax, labor, and social insurance

Licensing Comes First

Foreign companies must secure approval from MISA before incorporation, driving a Licensing Requirements Score of 2/5. Obtaining an investment license from MISA is a crucial step for foreign investors to legally operate and invest in Saudi Arabia.

Entrepreneurs can use the Invest Saudi Portal to apply for an investment license. Approval isn’t automatic. Authorities review proposed business activities closely and assess whether they align with Vision 2030 priorities.

Clear positioning matters. Companies that explain economic value, sector relevance, and local impact usually move faster than those that submit generic descriptions.

Documentation Requirements Are Strict

Saudi Arabia still relies heavily on original, formal paperwork during incorporation, resulting in an Original Paperwork Score of 2/5. Expect to provide documents that are properly legalized and apostilled, along with clean ownership records and activity descriptions that match licensing categories. It is crucial to prepare all required documents for company registration and compliance to ensure a smooth process. To avoid delays, most companies prepare:

• Legalized and apostilled parent company documents
• Board resolutions and ownership records
• Activity descriptions that match licensing categories

Missing or incorrectly prepared paperwork can pause the process entirely, so upfront prep saves a lot of time later.

Digital Portals Help, but Reviews Remain Manual

Saudi Arabia has invested heavily in digital government services as part of Vision 2030. Most filings now run through online portals, earning a Government Portal Sophistication Score of 3/5. Digital systems reduce in-person visits, but approvals still involve manual review behind the scenes. Timelines vary depending on sector, regulator workload, and document clarity. Businesses in Saudi Arabia, typically rely on these portals:

• ZATCA for corporate tax, VAT, zakat, and customs
• GOSI for social insurance and workforce reporting
• Qiwa for employment contracts, work permits, and Saudization tracking
• Mudad for payroll and wage protection compliance

In addition to using these digital portals, businesses must obtain official approvals and residency permits through the relevant government authorities, especially for processes like the Director of Board visa.

These systems connect with each other. Data entered in one portal often feeds into another, so accuracy matters right from the start.

A Local Address Is Mandatory

A physical Saudi address is required for licensing and banking, resulting in a Registered Address Score of 3/5. Virtual offices won’t cut it for most setups. Authorities expect a real, verifiable presence tied to commercial activity. Additionally, you must register a national address with the Saudi Post authority, as this is a government requirement for business registration and official correspondence.

Expect Some In-Person Steps

Despite digital progress, certain steps still require physical presence, especially around banking and select regulatory interactions. That places Saudi Arabia at an In-Person Travel Requirements Score of 2/5.

Company reps should plan for:

• Bank account opening meetings
• Opening a company bank account, which involves preparing required documentation and meeting with local banks
• Identity verification steps
• Occasional regulator or notary interactions

How the Portal System Affects Daily Operations

Once incorporated, compliance moves almost entirely through government platforms. These portals replace most in-person filings and create a single digital record across ministries.

That’s great for efficiency and traceability. The trade-off is that errors can cascade. Payroll data, tax filings, employment records, and customs declarations are routinely cross-checked, and a mistake in one portal can cause issues elsewhere. Smaller teams often underestimate how connected these systems are, which is why ongoing oversight matters just as much as initial setup.

Local Expert Insight

MISA approval isn’t a formality when doing business in Saudi Arabia. Regulators look closely at business activities and how they support national priorities. Companies that clearly articulate economic value, local contribution, and long-term intent tend to face fewer delays.

Saudi Arabia’s incorporation process is detailed, but predictable. With the right preparation, realistic timelines, and a clear value story, companies can move through setup smoothly and avoid early friction.

Entity Structure & Capital Considerations

Saudi Arabia gives foreign companies flexibility in how they set up, but regulators still look for substance. When you start a business in Saudi Arabia, it’s key to choose the right business entity, legal entity, and business structure, as this choice will impact ownership, regulatory requirements, and operational flexibility. They want to see a structure that reflects real, on-the-ground activity, not a paper entity.

The most common business structures for foreign investors in Saudi Arabia include limited liability companies (LLCs), joint stock companies (JSCs), and joint ventures.

Board, Management, and Local Presence

There’s no formal requirement to appoint a Saudi national director, which results in a Resident Director Score of 3/5. Still, local representation is strongly expected in practice. Regulators often look for a senior decision-maker in-country and clear authority for local action.

In many cases, the general manager plays a key role in obtaining necessary visas, such as the Iqama or employment visa, and can relocate to Saudi Arabia with appropriate sponsorship and documentation. In other words, approvals tend to move more smoothly when they see:

• A senior decision-maker based in Saudi Arabia
• Authority to act locally without constant head office escalation
• Management presence that matches the scale of the licensed activity

Share Capital Expectations Can Be Higher

Saudi Arabia doesn’t use one universal minimum capital rule across all sectors. Capital requirements vary by activity and regulator, resulting in a Share Capital Amount Score of 2/5. However, recent reforms have reduced the minimum capital requirement, making it easier for foreigners to establish a business and encouraging foreign investment.

In practice, that usually means:

• Higher paid-up capital for regulated or strategic activities
• Capital reviewed during licensing, not only incorporation
• Expectations that capital matches the proposed scope of activity

Compared to regional peers, Saudi Arabia often expects a stronger capital commitment, especially for operational businesses rather than holding setups.

Common Legal Structures for Foreign Investors

Most foreign companies choose between three structures.

• Limited Liability Company (LLC): the most common option. It limits liability, supports full foreign ownership in many sectors, and tends to be preferred for long-term operations.
• Joint Stock Company (JSC): increasingly popular, especially after recent amendments to the Companies Law introduced the simple joint stock company (SJSC). JSCs are suitable for larger ventures, allow for share issuance, and are often chosen by multinational companies.
• Branch office: permitted, but less favored. Branches expose the parent company to local liabilities and can face closer scrutiny during licensing and tax reviews.

Most investors choose an LLC unless there’s a specific reason to operate through a branch or a joint stock company.

Resident Status and Tax Exposure

A company is treated as resident if it is formed under Saudi company law or if its central management and control sits in Saudi Arabia. Resident status brings full tax filing, Zakat, VAT, and compliance obligations.

Non-resident companies can still trigger tax exposure through a permanent establishment (PE), even without incorporating locally. Activities that commonly create a PE include:

• Operating a licensed branch in Saudi Arabia
• Running construction or installation projects with supervisory activity
• Maintaining a fixed place of business or local office
• Acting through a dependent agent who negotiates or concludes contracts

On the flip side, preparatory or auxiliary activities, like storage, information gathering, or contract prep for signature abroad, generally do not create a PE.

Agents and Indirect Exposure

Saudi tax rules take a broad view of dependent agents. A PE may arise if a local agent regularly negotiates or concludes contracts, holds inventory to serve customers, or conducts insurance-related activity locally. That’s why even “remote” operating models need careful planning around authority and commercial activity.

Local Expert Insight

Foreign ownership is permitted, but regulators often expect meaningful local substance before issuing final approvals. Office space, senior management presence, and realistic capital levels all signal commitment. Companies that align structure, capital, and activity early tend to face fewer delays and less regulatory friction later.

Workforce & Saudization Considerations

Saudi Arabia’s labor framework is structured, actively evolving, and closely monitored. For foreign employers, workforce planning ties directly to licensing, visa access, and day-to-day operations. Employers are also required to provide health insurance to their employees and their dependents as part of their obligations.

Employment Law: Structured and Evolving

Saudi Arabia earns an Employment Law Complexity Score of 5/10. Rules are detailed and updated regularly. Amendments approved in August 2024 introduced changes across resignations, probation, notice periods, and leave entitlements, among other areas.

These updates aim to strengthen job security and human capital development. They also mean businesses in Saudi Arabia need to revisit contracts, policies, and processes to stay aligned. Some key update areas include:

• Resignation procedures for fixed-term contracts
• Probation rules and termination rights
• Notice periods for indefinite contracts
• Expanded maternity and parental leave
• New definitions covering manpower services and employment relationships

Payroll and Social Insurance Costs

Saudi Arabia scores 4/5 for Employer Payroll Contributions, since social insurance costs apply mainly to Saudi nationals. Employers pay Social Insurance Tax for Saudi employees only, through the General Organization for Social Insurance (GOSI). In practice:

• Saudi employees: total contribution of 21.5%, split between employer and employee
• Non-Saudi employees: employer pays 2% for occupational hazard coverage
• Contributions are capped at a monthly salary ceiling of SAR 45,000

No personal income tax helps, but payroll planning still matters, especially with Saudization targets.

Employee Protections and Termination

Saudi Arabia earns a Too Employee Friendly? Score of 3/5. Employers can manage performance and exits, but procedures are formal and documentation matters. Recent changes add clarity for businesses in Saudi Arabia regarding resignations and objections, improving predictability but reducing room for informal workarounds.

Unions and Labor Actions

Saudi Arabia scores 5/5 on the Union Score. Labor unions are not permitted, and strikes are rare and regulated. Employers still need tight compliance, especially under growing international scrutiny.

Saudization (Nitaqat Program)

Saudization sits at the center of workforce planning. Under the Nitaqat program, companies must meet minimum Saudi national hiring quotas based on sector and size. Performance affects:

• Ability to hire expatriates
• Issuance and renewal of work visas
• Access to certain government services

Strong Saudization performance increases flexibility. Dropping below thresholds can quietly block hiring plans.

Workforce Planning Implications

Saudization works best when it’s built into the business model early. Companies that rely heavily on expatriate hires usually need a plan for:

• Hiring Saudi nationals into suitable roles
• Training and development pathways
• Aligning headcount growth with Nitaqat thresholds

Because employment records, payroll, and visas sit in connected platforms, workforce data is routinely cross-checked across systems.

Local Expert Insight

Saudization ratios directly affect your ability to hire expatriates. Workforce planning needs to align with Nitaqat thresholds from the start, not after operations begin. Companies that treat Saudization as a strategic input tend to scale faster and face fewer hiring constraints.

Talent Availability & Compensation

Saudi Arabia’s talent market is expanding quickly, shaped by Vision 2030, a young population, and heavy investment in skills development. Employers will find strong commercial talent, growing finance capability, and an improving tech pipeline.

Having an on ground team is crucial to facilitate market entry and ongoing operations in Saudi Arabia, as local personnel help navigate market conditions and build essential relationships.

Commercial and Sales Talent Is a Clear Strength

Saudi Arabia earns a Sales Talent Score of 5/5, especially for enterprise sales and government-facing commercial roles. Companies commonly find:

• Strong experience selling into government and large enterprises
• Comfort navigating long procurement cycles
• Increasing familiarity with global systems and service models

Finance and Accounting Talent Is Maturing Fast

Saudi Arabia scores 4/5 for Finance Talent. The pool is stronger than it used to be, supported by professional training and exposure to international standards. Strengths often include:

• Accounting, controllership, and compliance roles
• Growing IFRS and audit exposure
• Strong alignment with local regulatory expectations

Senior and specialized roles exist, but competition is higher at the top end.

Developer Talent Is Improving, but Still Selective

Saudi Arabia earns a Developer Talent Score of 3/5. The pipeline is growing, but it remains smaller than mature tech hubs. In practice:

• Junior and mid-level developers are increasingly available
• Senior engineers and niche skills remain harder to source
• Many companies use a blended model of local hires and targeted expatriate specialists

Compensation Trends to Plan For

Saudi Arabia receives a Salary Benchmarking Score of 4/10. Salaries run higher than most emerging markets, especially for leadership roles and in-demand specialties. Employers usually plan for:

• Premium pay for senior managers and scarce skills
• Competitive packages to attract top talent
• Higher costs in Riyadh than in secondary cities

No personal income tax helps, but total compensation still needs careful planning.

Language Expectations Are Practical

Saudi Arabia scores 3/5 for Language. English is widely used in business, but Arabic is still required for official filings and many employment and regulatory documents. Most companies operate with:

• English as the business working language
• Arabic support for HR, legal, and government-facing processes

Riyadh Is Pulling Ahead as the Talent Hub

Riyadh has become the dominant corporate center, driven by incentives and headquarters requirements tied to public-sector contracts. That concentration improves access to talent, but it also increases competition for experienced professionals.

Local Expert Insight

Riyadh’s rise is being shaped by policy. Incentives and headquarters mandates influence where leadership teams sit and how companies recruit. Businesses that plan compensation carefully and align hiring with Saudization goals are best placed to attract talent without hitting visa constraints.

Financial & Banking Considerations

Saudi Arabia’s financial system is modern, well regulated, and well capitalized. The tricky part for foreign companies is not the quality of the banking system, but the time and documentation needed to get fully activated. As part of the business setup process, it is essential to open a corporate bank account, which is a key step for operating your business in Saudi Arabia.

A Strong Banking Foundation

Saudi Arabia earns a Financial Infrastructure Score of 4/5. The sector is stable and closely supervised by SAMA. Conventional and Islamic banks operate side by side, and Islamic banking plays a major role in the market. Companies can generally expect:

• Strong capitalization across major commercial banks
• Deep experience supporting large corporates and government-linked projects
• Mature Islamic banking options alongside conventional services

Bank Account Opening Takes Time

Account opening is often the slowest step in the setup process, driving a KYC Requirements Score of 2/5. Banks typically wait for all key elements to be in place before activation. Companies usually need:

• Final MISA approval
• Commercial registration
• A physical office lease in Saudi Arabia
• Full disclosure of shareholders and UBOs
• In-person signatories for final activation

Reviews can take weeks or longer, especially for complex ownership structures.

KYC and AML Expectations Are High

Saudi Arabia’s AML framework is well established and actively enforced. Banks verify identity, ownership, and risk on an ongoing basis, not only at onboarding. Expect:

• Detailed identity checks on shareholders and UBOs
• Periodic updates and re-verification requests
• Enhanced due diligence for cross-border activity

Banks can use third parties for parts of due diligence, but responsibility stays with the bank, so the documentation burden doesn’t really shrink.

Budgeting for Banking and Operations

Saudi Arabia receives an Average Budget Score of 5/10. Operating costs are moderate overall, but a few items come at a premium, especially in Riyadh. Companies often budget for:

• Office space
• Senior leadership and specialized talent
• Compliance, audit, and advisory support

Islamic Banking Considerations

Many Saudi banks follow Shariah principles, which affects how financing is structured. Interest-based lending is replaced with profit-sharing or asset-backed arrangements. Most foreign companies adapt quickly, but it’s still worth factoring into treasury and financing plans.

Local Expert Insight

Opening a bank account is often the longest step. Banks may require full MISA approval, a signed office lease, and in-person signatories before activation. Companies that prepare ownership documentation early and align structure with bank expectations tend to move faster.

Saudi Arabia’s banking environment is reliable and sophisticated. The trade-off is patience, and a lot of paperwork. With proper planning and realistic timelines, banking becomes manageable instead of a blocker.

Immigration & Work Permits

Foreigners can live in Saudi Arabia by obtaining the appropriate type of visa depending on the purpose of their stay.

Saudi Arabia’s immigration system is structured, sponsor-based, and tightly linked to workforce compliance. For foreign employers, visas connect directly to Saudization performance and ongoing regulatory alignment.

There are different types of visas available, including a business visa and an employment visa (work permit), each serving specific purposes. An employment visa allows foreigners to reside in Saudi Arabia and is usually extended to cover family members. A business visa enables foreigners to explore business opportunities in Saudi Arabia but does not permit them to engage in business activities during their stay.

Visa processes and requirements in Saudi Arabia may change, so it is important to check with the Saudi Arabian embassy or consult with local experts for the most up-to-date information. When participating in government tenders or expanding operations, a foreign entity may need to establish a branch or obtain a temporary foreign investment license to qualify for bid submissions and government contracts.

Overall, the system earns an Immigration Complexity Score of 3/5. Processes are clear, but the dependencies across labor, immigration, and compliance systems require planning.

Sponsor-Based Visas and Saudization Links

All foreign employees must be sponsored by a Saudi entity. Visa issuance and renewals tie closely to a company’s Saudization status under Nitaqat.

For individual GCC nationals starting a business in Saudi Arabia, it is also required to provide a certificate proving they are not a government employee as part of the documentation process. In practice, that tends to look like:

• Strong Saudization scores unlocking smoother visa processing
• Falling below thresholds restricting or freezing new visas
• Workforce planning and hiring approvals moving together

A company can be fully incorporated and still face visa blocks if Saudization targets are missed.

Iqama: the Foundation of Legal Residence

Every foreign employee working in Saudi Arabia needs an Iqama, the residency permit that supports legal employment and access to daily services. Companies should plan for:

• Issuance and renewal timelines
• Employer responsibility for sponsorship compliance
• Fines or deportation risk for expired or missing permits

Renewals need to happen before expiry, since repeated violations can escalate quickly.

New Expatriate Skill Classification System

From mid-2025, Saudi Arabia introduced a formal expatriate work permit classification system under the Ministry of Human Resources and Social Development. Foreign workers are categorized into three tiers:

• High-skilled
• Skilled
• Basic

Classification depends on qualifications, experience, salary, age, and alignment with SSCO standards, and it runs through platforms like Qiwa and Mudad.

Why the Classification Matters

Role titles and pay need to align with the new skill-level criteria before permits are approved. That adds a planning layer to hiring, especially for fast-scaling teams. Businesses in Saudi Arabia typically needs to:

• Reclassify existing expatriate employees in Qiwa
• Confirm new hires meet eligibility rules before recruitment
• Align job descriptions, titles, and compensation with SSCO

Ongoing Employer Responsibilities

Employers remain responsible for immigration compliance throughout employment, including document controls and visa management. That includes:

• Safeguarding residence permits
• Reporting lost documents within 24 hours
• Managing exit and re-entry visas
• Ensuring dependents don’t work without authorization

Local Expert Insight

Visa quotas are tied directly to your Saudization score. Non-compliance can freeze new visa issuance even after setup is complete. Companies that align workforce structure, job classifications, and Saudization targets early avoid the most common immigration bottlenecks.

Saudi Arabia’s immigration framework rewards preparation. With clear role design, compliant records, and realistic hiring plans, work permits become a manageable process rather than a growth constraint.

Unique Saudi Arabia Expansion Insights

Saudi Arabia rewards companies that understand how the system actually operates. Opportunity is significant, but outcomes depend on alignment, sequencing, and credibility.

• Vision 2030 alignment speeds approvals.
  Projects tied clearly to diversification, technology, or skills development tend to move more smoothly through regulatory reviews.
• Regional headquarters expectations are increasing.
  Companies bidding on government or state-linked contracts may need to establish a regional headquarters in Saudi Arabia. For many public-sector opportunities, a local HQ is now part of eligibility.
• Sequencing affects timelines.
  Incorporation, banking, visas, and hiring must follow a specific order. Starting steps too early can stall progress and create avoidable delays.
• Relationships still influence outcomes.
  Processes are formal, but progress often depends on credibility, local presence, and informed engagement with regulators.

How GEOS Simplifies Your Expansion into Saudi Arabia

GEOS supports foreign businesses in Saudi Arabia through MISA licensing, entity setup, registered address solutions, nominee arrangements (where required), and ongoing compliance coordination. The focus stays on aligning your structure, timelines, and documentation with Saudi regulatory expectations from the start.

AI-Powered Expansion Support

Geovanna brings visibility to the process, helping teams follow approvals, filings, and compliance milestones in one place as Saudi regulations evolve.

Is Saudi Arabia the Right Fit for Your Business?

With a GEOS Global Subsidiary Index Score of 62.4, Saudi Arabia offers scale, capital access, and long-term opportunity that few regional markets can match. Companies prepared to navigate licensing rigor and localization requirements can unlock one of the world’s most ambitious growth environments.

📩 Contact GEOS to build a customized Saudi Arabia expansion strategy.

This article does not constitute legal advice.