Under the Investment Law that took effect in 2025, entering Saudi Arabia as a foreign investor no longer requires a separate investment licence. According to the Ministry of Investment (MISA), it runs through registration instead — the updated law replaced the earlier Foreign Investment Law (Royal Decree No. M/1) and now covers both local and foreign investors under one framework, rather than a separate track for each. That sounds like a small procedural change; in practice, it removes an entire approval layer that used to sit in front of every foreign-owned company in the Kingdom. Here’s what actually changed, step by step, and what still doesn’t.
Before: the old licence model
Foreign investors previously needed a distinct MISA foreign-investment licence before they could proceed to company registration — an extra approval layer sitting in front of the standard incorporation process that domestic investors never had to clear.
After: registration, not licensing
Per Article 7 of the Investment Law, “a foreign investor shall register with the Ministry prior to engaging in any investment.” MISA maintains a National Registry of investor information and investment data, and operates a One-Stop Service Center to coordinate the licences and approvals that still sit with other government agencies. The practical effect is that “can I invest in Saudi Arabia” is now mostly a registration question, not a discretionary licensing question — for the activities the reform covers.
What’s still restricted
MISA publishes and periodically updates a List of Excluded Activities. Investment in a listed activity needs prior approval: the investor submits a request to MISA, which refers it to the relevant government agency for consideration. Ownership changes in a restricted activity also require separate approval — this isn’t a one-time check at incorporation.
The process today, in order
- MISA registration — register as an investor via the National Registry. This step has replaced the former licensing requirement.
- Sector/activity check — confirm your activity isn’t on the Excluded Activities list; apply for specific MISA approval if it requires one.
- Commercial Registration — register the entity with the Ministry of Commerce.
- Regulatory approvals — obtain any sector-specific approvals relevant to your activity (for example SFDA for health/pharma/food, SAMA for financial services, or CMA for capital markets).
- ZATCA registration — register for tax (corporate income tax/Zakat, VAT, withholding tax as applicable).
- Labour & GOSI — register for labour licensing and social insurance before hiring.
- Banking & ongoing filings — open a corporate bank account and enter the ongoing filing cycle.
The tax side: Zakat, corporate tax, and VAT
Saudi Arabia runs a dual tax system split by ownership. According to ZATCA, income tax applies to resident capital companies “with respect to the shares owned by non-Saudi partners,” while Saudi-owned shares generally sit under the separate Zakat regime instead. ZATCA states the applicable income tax rate as 20% for resident capital companies on the non-Saudi-owned share. A joint-venture structure with mixed Saudi and foreign ownership can have both regimes applying simultaneously, split by ownership share — worth confirming before a cap table is finalised, not after.
VAT applies at 15%, per ZATCA — one of the higher rates in the region, worth building into pricing and contract terms from the start.
Regional Headquarters (RHQ) status
Companies relocating their regional headquarters to Saudi Arabia may qualify for RHQ status, which carries a defined incentive package alongside specific eligibility and ongoing compliance conditions. It’s a genuine option for the right structure, not a default — eligibility should be confirmed for your specific situation rather than assumed from the programme’s existence alone.
What this means for foreign investors
This reform removes a genuine friction point — but “no licence” doesn’t mean “no process.” The registration path still has real steps and real sector-specific gates, and 100% foreign ownership should be confirmed for your specific activity rather than assumed universally. It rewards committed market entry — manufacturing, giga-project supply chains, regional HQ relocations, businesses targeting the domestic market at scale — more than it suits a business looking for a fast, light-touch entity purely for invoicing.
Frequently asked
Do I still need a MISA licence to invest in Saudi Arabia?
No — the licensing requirement was replaced by a registration process with MISA under the Investment Law that took effect in 2025. Activities on the Excluded Activities list still require specific MISA approval.
Can I own 100% of my Saudi company?
For most activities not on the excluded-activities list, yes. We confirm this for your specific activity before you commit to a structure.
What is RHQ status and do I qualify?
Regional Headquarters status offers incentives for companies relocating their regional HQ to Saudi Arabia, subject to specific eligibility criteria and ongoing compliance conditions, which we assess as part of your structuring session.
Is the corporate tax rate the same for everyone?
No. Per ZATCA, the income tax rate applies to the non-Saudi-owned share of a resident capital company; the Saudi-owned share generally falls under Zakat instead, and oil/hydrocarbon activities carry their own sector-specific rates.
Important information: this article is general information, reflecting official MISA and ZATCA guidance available as of 27 September 2026. Investment registration requirements, tax rates and excluded-activity lists may change — confirm your specific position with MISA and ZATCA before acting. This is not legal or tax advice, and Build Your Business does not guarantee registration, licensing or tax outcomes.
Read the full picture on our Saudi Arabia country page, including the tax snapshot and full compliance calendar.