Opening a financial company in Saudi Arabia implies several steps, among which one of the most important is the licensing one. However, in order to be issued a Saudi financial license, such a business must also meet certain requirements.
Below, our Saudi company formation agents invite you to discover the procedure of setting up a financial business. We are at your disposal through the incorporation and licensing phases.
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Financial licensing requirements in Saudi Arabia
Financial licenses in Saudi Arabia are issued by one of the following authorities:
- the Saudi Central Bank;
- the Saudi Capital Markets Authority.
Both governmental bodies require financial companies to:
- have a physical establishment in Saudi Arabia (in the case of local companies, both the headquarters and management must be located in Saudi Arabia);
- ensure effective supervision, which may require the majority of the board of directors members to be Saudi residents;
- follow a business model that respects the issuing authority’s requirements;
- have appropriate financial resources to complete its activities and cover the risks that come with such a business;
- make sure that the key officers of the company meet the fit and proper criteria;
- secure strict internal audit procedures (our accountants in Saudi Arabia can advise on the audit and accounting rules for such companies).
Our lawyers in Saudi Arabia are at your disposal with detailed information on the legal requirements to meet when filing for a Saudi financial license.
Steps to open a financial enterprise in Saudi Arabia as a foreigner
Saudi Arabia is open to both local and foreign investors who want to set up financial companies here. However, the latter category is required to comply with a few additional requirements, as follows:
- respect the Saudi immigration rules and apply for residence permits in Saudi Arabia before or after registering their companies, if they plan to relocate here;
- selecting one of the acknowledged business forms for carrying out financial activities, among which the limited liability and joint stock company;
- applying for an investment or SAGIA license which is now known as the MISA license;
- registering the company with the Commercial Register;
- applying for the financial license in accordance with the company’s activities.
Our Saudi company registration consultants can help you register the desired type of business form.
Activities requiring a financial license in Saudi Arabia
As mentioned above, the Saudi financial license issued to a company is related to the activities it will perform. From this point of view, this business permit covers the following operations:
- banking;
- insurance and reinsurance;
- financial leasing;
- securities activities.
Please note that each activity also has other sub-sectors in which a Saudi financial company can operate.
Foreign financial companies in Saudi Arabia
Foreign companies can operate through branch offices in Saudi Arabia. For this purpose, they must have physical locations to be issued financial licenses. With respect to the share capital of such businesses, they are decided on a case-to-case basis, in accordance with their activities.
The banking industry in Saudi Arabia
The Saudi banking market is made up of both local (traditional) and foreign banks. According to the latest statistics:
- by the end of 2024, the net income derived from interests in the banking industry is expected to reach USD 51.97 billion;
- the sector is dominated by traditional banks which are expected to have a market volume of USD 44.33 billion by the end of 2024;
- by 2029, the net interest income is projected to grow by 4.54% annually.
If you want to open a financial company in Saudi Arabia, please contact us.