Saudi Arabia is the region's largest economy and its fastest-changing regulatory environment; since February 2025, foreign-investor entry has been governed by the new Investment Law issued by Royal Decree No. M/19 of 16/1/1446H, which replaced the old investment license with registration at the Ministry of Investment. The opportunity - from giga-projects to privatization - is real, but the right entry decision is made before incorporation, not after.
What the Consultation Covers
Activity fit: the excluded-activities list and prior sector licensing. Entity choice: limited liability company, branch, or simplified joint-stock company under the Companies Law issued by Royal Decree No. M/132 of 1443H. Structuring: ownership, governance, and management authority. Zakat and tax planning before the first registration, not after the first return.
The New Investment Registration
The new law created a national investor register; the foreign investor registers with the Ministry of Investment before investing, backed by declared guarantees: freedom of investment, equal treatment of local and foreign investors, and protection from expropriation except for public interest with fair compensation. Review the excluded list carefully before assuming your activity is fully open.
Regional Headquarters
The Regional Headquarters program grants global companies expanded incentives - including preferential tax treatment extending thirty years under the Zakat, Tax and Customs Authority rules - and is now linked to contracting with government entities. The RHQ decision is strategic and studied early: its scope, the conditions for keeping its incentives, and its effect on the whole group structure.
Practical Friction Points
Saudization quotas: ratios move by activity and size and belong in the hiring plan from day one. Sector licensing: finance, telecoms, health, and energy answer to their own regulators on their own tracks. Documentation: Arabic is the official language before authorities and courts. Bank account opening: a step that takes time and starts early with complete documents.
Common Mistakes
Assuming investment registration alone is enough to start a sector-regulated activity. Ignoring Saudization ratios until the first visa request. Choosing an entity that cannot carry growth plans or incoming partners. Deferring zakat and tax planning until after operations begin.
See our company formation in Saudi Arabia and our commercial and corporate practice for related work.
Frequently asked questions
Does the investment license still exist?
It was replaced by Ministry of Investment registration for most activities; excluded activities follow their own track.
Can a foreigner own 100%?
In most activities, yes - outside the excluded list and sector-regulator conditions.
How long does entry take?
From weeks for straightforward registration and incorporation to months for regulated activities.
How do you serve Saudi Arabia without a Saudi office?
From our Kuwait office and in cooperation with our partners in the Kingdom: analysis, structuring, and drafting remotely; local requirements through our partners.