Foreign Investment Regulation

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Licensing regulation and process for foreign investment

 

Being licensed to operate in Saudi Arabia as a foreign investor is necessary to obtain any permit to start operations.

Established in 2000, the Saudi Arabian General Investment Authority (SAGIA) is the Kingdom’s investment promotion agency responsible to setup and govern the regulatory framework for international companies willing to entry the Saudi market, offering assistance from the initial planning stage to comprehensive after care services.

 

The granting of a license to invest in Saudi Arabia is a crucial activity for obtaining all permits before starting a new business. The first step is the selection of the type of investment license for which investor wishes to apply and verify whether there are any specific requirements, such as minimum acceptable capital and any cap to foreign capital. Investors can register and apply through the SAGIA official website, with a simplified process.

 

 

Fiscal regime elements relevant for foreign investment

 

Four main fiscal regime elements are particularly relevant for foreign investment

  • Corporate income tax, applicable on foreign ownership of Saudi Arabia-based company; with statutory corporate rate set at 20%, it is the lowest among the G20
  • Zakat, applicable on local ownership of Saudi Arabia-based company; set at 2.5% of the Zakat base
  • Value-Added-Tax
  • Social Security contribution; only for Saudi personnel

 

 

International trade agreements

  • Saudi Arabia is a member of the World Trade Organization, working to further liberalize its trade regime and accelerate integration in the global economy
  • On a regional basis, the Kingdom is member of the Gulf Cooperation Council and of the Greater Arab Free Trade Area
  • Bilaterally, Saudi Arabia signed treaties for the avoidance of double taxation of income and capital (Double Taxation Avoidance agreements, DTAs) with 29 countries as well as agreements (23) aimed at promoting and protecting the investments of the enterprises of one contracting party in the territory of the other