This blog is aimed at being your ultimate guide for establishing a foreign company branch in Saudi Arabia. Analytix has years of experience establishing branch offices in KSA and helping investors efficiently manage all critical aspects of the process. You will find answers here to all your questions regarding opening a branch office in KSA.
What is a Branch Office?
A branch office is a subsidiary of the parent company, providing a swift and cost-effective means for foreign business owners to establish a presence in Saudi Arabia. Branch offices can carry out the functions and operations of the parent company but are restricted from participating in trading activities.
Benefits of Setting Up a Branch Office in Saudi Arabia
A branch office in Saudi Arabia can offer your company a set of important benefits letting you explore business opportunities in Saudi’s thriving market:
100% Foreign Ownership
A Saudi branch office allows the foreign company to keep complete control and ownership rights.
Convenient Setup Process
The incorporation process for a branch office is much simpler than setting up other types of business entities.
No Need for Local Sponsor
Foreign companies do not require support from a local sponsor when setting up a branch office in KSA.
Business Growth
A branch office is a cost-effective and systematic way to develop your business in KSA and increase brand visibility.
Gain Expertise in the Saudi Market
Opening a branch office in Saudi gives you strategic insights into the Saudi market while developing a local presence.
What to Consider When Opening a Branch in Saudi Arabia?
Foreign companies opening a branch office in Saudi Arabia need to consider the following aspects carefully:
- A branch office is not an independent legal entity but an extension of the main company.
- The branch office must have a registered address in a Saudi city, allowing it to access financial benefits.
- A branch office can be involved only in the same activities as the parent company.
- Foreign entities have the option to establish more than one branch in Saudi Arabia.
How can an Expert Help You to Set Up a Branch Office in KSA?
The process of establishing a branch office in Saudi Arabia can be made simpler and more efficient by using the services of a local expert, like Analytix. Our experienced team can assist you in critical aspects such as regulatory compliance, managing cultural norms, and planning competently. Our systematic approach removes complexity and provides you with all the necessary support.
Requirements to start a branch office in Saudi Arabia
The following requirements have to be met when opening a branch office of your foreign company in Saudi Arabia. These include laws regarding minimum share capital, iqama requirements, and more.
Minimum Capital Investment
A foreign company’s branch is mandated to deposit a minimum capital of SAR 500,000. The minimum capital may increase depending on the business activity.
Foreign License
The foreign entity has to obtain a business license from the Ministry of Investment (MISA).
Commercial Registration
The branch office will secure its Commercial Registration Certificate from the Ministry of Commerce and Industry (MOCI).
Opening of Bank Account
The parent company needs to open a business bank account in Saudi to deposit share capital and carry out financial transactions.
Residency Permit for Office Manager
The manager of the branch office is required to have a Saudi residency permit.
Physical Office
The branch office should have its registered office address in a Saudi city.
Documents Required to Open a Branch in Saudi Arabia
Our team can help you navigate the document requirements for opening a branch office based on the business activity your company is involved in
Required Documents for Establishing a Foreign Branch
- Business license of the parent company
- Memorandum of Association
- Audit report of your parent company
- Shareholder’s certificate
- Copy of shareholder’s passport
Looking to Start a foreign company branch in Saudi Arabia?
Analytix can make the process of setting up a foreign branch in Saudi an effortless one. From ensuring regulatory compliance to opening your bank account, we support you every step of the way to make your business journey into the kingdom a successful one.
- FAQs
Frequently Asked Questions
If your question is not addressed here, please feel free to reach out to us. We value your inquiry.
What are the Tax requirements with a KSA foreign company branch?
A foreign company branch in Saudi Arabia attracts 20% corporate income tax on its Saudi revenue.
How can I open a branch of a foreign company in Saudi Arabia?
A local expert like Analytix can help you to complete all official requirements for opening a branch office of your company in Saudi Arabia.
What is the difference between branch and subsidiary in Saudi Arabia?
A branch is a legal extension of the parent company. This means that the parent company will be responsible for any legal matters involving its branch. Subsidiaries are separate legal entities, and the parent company is not held legally liable for its debts or other legal matters.
