+971 52 248 8528
+966 56 233 0183
Saudi Arabia continues to be one of the fastest-growing investment destinations globally, driven by Vision 2030, regulatory reforms, and increased openness to foreign ownership. For multinational companies and regional groups, setting up a subsidiary company in Saudi Arabia has become the preferred entry strategy to access government projects, local contracts, and long-term market growth.
What Is a Subsidiary Company in Saudi Arabia?
A subsidiary company in Saudi Arabia is a locally registered company that is owned partially or fully by a foreign parent company. Unlike a branch, a subsidiary is treated as a separate legal entity, offering stronger credibility and operational flexibility.
Most subsidiaries are established as a Limited Liability Company (LLC), as it allows:
Independent legal status
Limited liability for the parent company
Eligibility for most commercial and service activities
Easier banking and long-term scalability
Key Benefits of Setting Up a Subsidiary in Saudi Arabia
Investors prefer subsidiaries over branches due to several strategic advantages:
- Separate legal entity (reduced parent company risk)
- Eligible for government and semi-government contracts
- Access to Saudi banking, visas, and local workforce
- Stronger market credibility with clients and partners
- Full or majority foreign ownership in most sectors (subject to MISA approval)
How to Set Up a Subsidiary Company in Saudi Arabia
Step 1: Obtain Foreign Investment License (MISA)
The first and most critical step is obtaining approval from the Ministry of Investment of Saudi Arabia (MISA).
Key documents usually required:
Parent company incorporation documents
Board resolution approving Saudi subsidiary
Audited financial statements of the parent company
Proposed business activities
Step 2: Reserve Company Name & Legal Structure
Once MISA approval is secured:
Company name is reserved via the Ministry of Commerce
Legal structure is finalized (commonly LLC)
Shareholding and capital structure are defined
Step 3: Draft and Notarize Articles of Association
The Articles of Association (AOA) must be drafted in Arabic and notarized in Saudi Arabia. This document defines:
Ownership structure
Capital contribution
Management and profit distribution
Step 4: Commercial Registration (CR)
After notarization, the company receives its Commercial Registration (CR), which legally establishes the subsidiary in Saudi Arabia.
Step 5: Post-Incorporation Registrations
To fully operate, the subsidiary must complete:
ZATCA registration (tax & VAT, if applicable)
Chamber of Commerce registration
Bank account opening
National Address registration
GOSI (social insurance) registration
Step 6: Licenses, Office & Visas
Depending on the activity:
Sector-specific licenses may be required
Office lease or flexi-desk setup
Employment visas and GM Iqama processing
Capital & Ownership Requirements (2026 Update)
Minimum capital depends on activity
100% foreign ownership is allowed in most sectors
Some strategic sectors may require additional approvals
Saudi Arabia continues to streamline capital requirements to attract high-quality investors.
Common Mistakes Investors Should Avoid
Choosing the wrong business activity
Incomplete MISA documentation
Underestimating post-setup compliance
Delays in bank account and visa processin
This is why working with an experienced local consultant is critical.
How J K Supports Investors
J K Management Consultancies provides end-to-end subsidiary company setup services in Saudi Arabia,
including:
🔹 MISA foreign investment licensing
🔹 Subsidiary company formation & CR issuance
🔹 Legal documentation & translations
🔹 Tax, ZATCA & VAT registration
🔹 Office setup, visas & GM Iqama support
🔹 Ongoing compliance and corporate advisory
Our team ensures your Saudi subsidiary is established correctly, compliantly, and efficiently, saving time and avoiding costly errors.
Why 2026 Is the Right Time to Set Up a Subsidiary in Saudi Arabia
With massive infrastructure projects, giga-projects (NEOM, Red Sea, Qiddiya), and continued regulatory reforms, 2026 presents a strategic window for foreign investors to establish a strong local presence in Saudi Arabia.
A well-structured subsidiary allows businesses to scale, secure long-term contracts, and fully participate in the Kingdom’s economic transformation.
Final Thoughts
Understanding how to set up a subsidiary company in Saudi Arabia is essential for investors seeking sustainable growth in the GCC’s largest economy. With the right structure and expert guidance, Saudi Arabia offers unmatched opportunities in 2026 and beyond.
WhatsApp
