Saudi Law: Business in Saudi Arabia: An Overview

Doing business in Saudi Arabia is considered as one of the easiest in the world. Saudi Arabia is one of the countries in the Middle East that adopted globalization as a method of liberating its economy to achieve robust economic development and to promote investments in Saudi Arabia. It pursued and initiated reforms that gradually solidified its economic standing and competence among the world’s economies. watin-p

Saudi laws were enacted to address the economic challenges and obstacles in meeting the economic goals of the Kingdom. The Council of Ministers issued and promulgated the new Saudi Foreign Investment Law on April 2000 following the recommendation of the Supreme Economic Council.

The purpose of the law is to remove several economic restrictions to allow other forms of investments aside from oil and energy. This allows investment diversity that would significantly boost the economic growth of the Kingdom. With oil energy as its main economic sector, this website Saudi Arabia is in need to integrate with the world economic changes.

The Saudi Arabian General Investment Authority is the governmental authority that issues the required Foreign Investment License, and manages and regulates all investments in the Kingdom.

To achieve its mission for growth and development in foreign investment, and in furtherance of its newly promulgated Foreign Investment Law, Saudi Arabia made a significant move to join the World Trade Organization in December 2005 after careful and serious trade agreements. The international community welcomed the membership of Saudi Arabia to the World Trade nadiya Organization despite the Kingdom’s unique culture and religion. The membership of Saudi Arabia to the WTO allowed the liberalization and development of its international trade. It was able to reach sustainable economic growth and total success.

As a sign of its commitment to open its trade to the world, Saudi Arabia offers incentives and guarantees to attract foreign investors to do business in Saudi. Under the Saudi Foreign Investment law, foreign investments shall enjoy all the benefits, incentives, and guarantees that are extended to Saudi businesses.


The Kingdom has withdrawn the minimum capital requirements to establish a company in Saudi Arabia. This applies to certain forms of business like a limited liability company.


The new Foreign Investment Law removed the restriction on business ownership and control and it now allows 100 percent foreign-owned investments removing the requirement for a Saudi partner, sho except for banking and insurance sectors.

Real Estate

The new Saudi law likewise allows foreign investors to acquire and own real estate properties in the Kingdom that is required to carry out its licensed activity, except in Meccah and Madinah.


To allow the foreign investors freedom to hire its employees of its choice, the law permits the foreign investors to sponsor foreign employees under the name of the business entity licensed to operate in Saudi. forbixindia

Taxation Flexibility

The Kingdom signed agreements that offer the benefit of avoiding double taxation and it likewise promotes the protection of investments. The business entity is also allowed to carry forward the losses it incurred to the following years and will not be calculated at tax settlement of the years during which the entity reaps profits.


The Saudi government allows the business entity to obtain industrial credits and loans in accordance with the regulations of The Saudi Industrial Development Fund.

Doing business in Saudi Arabia is indeed one of the easiest and flexible in the world. The government had appropriately promulgated effective Saudi law and regulations to regulate and address business transaction needs.


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