By emna noa 
Introduction
Saudi Arabia has become one of the most attractive destinations for foreign entrepreneurs and investors. With its Vision 2030 initiative, the Kingdom has made significant reforms to encourage foreign business ownership. Traditionally, setting up a business in Saudi Arabia required a local sponsor holding a majority stake. However, new regulations now allow foreign investors to establish a company without a local sponsor under specific conditions.
This guide will walk you through the steps to start a business in Saudi Arabia without a local sponsor in 2025, covering aspects such as company formation, visa services, legal requirements, and more.
Understanding the Local Sponsor Requirement
In the past, foreign entrepreneurs had to partner with a Saudi national who held at least 51% of the company shares. This requirement was a major barrier for those looking for full ownership of their businesses. However, Saudi Arabia has removed this restriction for certain sectors, allowing 100% foreign ownership under the Saudi Arabian General Investment Authority (SAGIA) licensing system.
Industries Eligible for 100% Foreign Ownership:
- IT and Technology
- Healthcare
- Education
- Manufacturing
- Engineering and Consultancy Services
Steps to Start a Business in Saudi Arabia Without a Local Sponsor
1. Choose the Right Business Structure
Selecting the appropriate business structure is crucial for successful company formation in Saudi Arabia. The most common structures for foreign investors include:
- Limited Liability Company (LLC): Most preferred for SMEs.
- Branch Office: Suitable for existing foreign companies expanding to Saudi Arabia.
- Joint Stock Company: Ideal for large enterprises and public shareholding.
- Representative Office: For research and promotional activities without commercial transactions.
2. Obtain a Foreign Investment License (SAGIA License)
To legally operate without a local sponsor, you must obtain a SAGIA (Saudi Arabian General Investment Authority) license. The steps include:
- Register an account on the SAGIA website.
- Submit a business plan and financial projections.
- Provide relevant documentation (passport copies, financial statements, etc.).
- Obtain the commercial registration (CR) certificate.
3. Register Your Business with the Ministry of Commerce
After obtaining the SAGIA license, you need to:
- Register your business with the Ministry of Commerce.
- Obtain a Commercial Registration (CR) certificate.
- Register with the Chamber of Commerce.
4. Apply for Business and Employee Visas
Foreign entrepreneurs must secure a Business Visa in Saudi Arabia to manage their company. Additionally, you will need:
- Investor Visa: Grants residency to foreign business owners.
- Work Visas: For hiring foreign employees.
- Dependent Visas: If you plan to bring your family to Saudi Arabia.
Professional immigration services in Saudi Arabia can help streamline the visa application process.
5. Open a Corporate Bank Account
To conduct financial transactions, opening a corporate bank account is mandatory. Requirements include:
- Commercial Registration (CR)
- SAGIA License
- Business owner’s passport
- Company incorporation documents
Leading banks such as Al Rajhi Bank, National Commercial Bank (NCB), and Riyad Bank offer corporate banking services tailored to foreign investors.
6. Ensure Compliance with Legal and Accounting Services
Operating in Saudi Arabia requires adherence to legal and financial regulations. Hiring legal services and accounting services ensures compliance with:
- Zakat and Tax Regulations: Businesses must register for VAT and pay corporate taxes.
- Labor Law Compliance: Companies must follow Saudi labor laws for hiring employees.
- Financial Reporting: Annual financial statements are required by law.
Engaging with a professional payroll service provider can simplify employee salary processing and taxation.
Key Benefits of 100% Foreign Ownership in Saudi Arabia
- Full Control: No need to share ownership with a local sponsor.
- Access to a Growing Market: Saudi Arabia offers a rapidly expanding economy.
- Easier Expansion: Foreign businesses can expand freely across the GCC region.
- Government Incentives: Tax exemptions and investment incentives are available.
FAQs
1. Can a foreigner start a business in Saudi Arabia without a local sponsor?
Yes, under new regulations, foreign investors can establish 100% foreign-owned businesses in specific sectors such as IT, manufacturing, and consulting.
2. How much does it cost to start a business in Saudi Arabia?
The cost varies depending on the business type and sector. On average, setting up a company can range from SAR 100,000 to SAR 500,000, including licensing, legal, and operational costs.
3. How long does it take to register a business in Saudi Arabia?
Business registration typically takes 2 to 4 weeks, provided all documentation is complete and approved by the relevant authorities.
Conclusion
Starting a business in Saudi Arabia without a local sponsor is now a reality for foreign investors. With the right business structure, SAGIA license, and compliance with legal and financial requirements, entrepreneurs can enjoy full ownership and tap into the Kingdom’s lucrative market.
For seamless business setup in Saudi Arabia, consider professional immigration services, legal services, and accounting services to ensure compliance and smooth operations. With the right approach, your company can thrive in Saudi Arabia’s dynamic economy.
Need assistance with your company formation in Saudi Arabia? Contact experts in business setup, visa services, and payroll management to get started today!
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