A foreign company applying to set up a branch in Saudi Arabia may receive the right to do so only for specific activities, as the branch is prohibited from certain operations, such as trading activities. Our team of consultants for opening a company in Saudi Arabia can assist with the incorporation of this business form.
| Quick Facts | |
|---|---|
| Applicable legislation | Foreign country’s legislation |
Best Used For | Various activities, from commercial to technical activties, depending on the parent company’s object of activity |
Minimum share capital (YES/NO) | SAR 500,000 for the SAGIA license |
| Time frame for the incorporation (approx.) | Approx. 7 months |
| Documents to be filed by parent company | – Articles of Association, – Certificate of Registration, – power of attorney for the local representative |
| Management (Local/Foreign) | Local manager required |
| Legal representative required (YES/NO) | Yes |
| Local bank account (YES/NO) | Yes |
| Independence from the parent company | Dependent on the parent company, required to conduct the same activities |
| Liability of the parent company | Liable for debts and obligations incurred by the branch |
| Corporate tax rate | 20% on the income generated in Saudi Arabia |
| Annual accounts filing requirements | – annual tax returns, – audited financial statements |
| Possibility of hiring local staff (YES/NO) | Yes |
| Travel requirements for incorporating branch/subsidiary (YES/NO) | No, local agent services can be acquired |
| Double tax treaty access (YES/NO) | Yes |
Table of Contents
What are the main characteristics of branches in Saudi Arabia?
- Can only complete the same activities as the parent company;
- The foreign enterprise is required to apply for the licenses related to the operations of the Saudi branch;
- The parent company will be liable for the debts and other obligations of the branch office;
- The foreign company can appoint a person from its headquarters to represent it in Saudi Arabia, however, the respective individual must obtain a work permit;
- The minimum allocated capital to obtain the MISA (Ministry of Investment) license is 500,000 SAR.
What are the steps to open a Saudi branch office?
Here are the updated steps for 2026:
- trading name reservation: the branch office must bear the same name as the parent company; however, it must still be reserved;
- documents drafting: the parent company must submit several papers issued in the home country;
- MISA license application: this is an approval to be obtained by the foreign company;
- Commercial Register incorporation: the branch must also be registered like any other business;
- bank account opening: a local account is required for invoicing requirements;
- tax registration: the branch must be registered for corporate taxation.
You can find information on the branch office in the infographic below:
What are the documents to prepare when setting up a branch office in Saudi Arabia in 2026?
Here is a list of the papers to be filed with the Commercial Register:
- the trading name reservation form (this step must be completed when applying for the MISA license);
- a board resolution providing the approval for opening the branch;
- passport copies of the branch manager (in the case of foreign citizens);
- the lease agreement or other proof of the local office in Saudi Arabia;
- copy of the company’s certificate of incorporation;
- copy of the parent company’s articles of association and memorandum;
- the power of attorney, attested by the Saudi consulate;
- payment of specific fees.
Please note that the documents issued in the parent company’s home country must be translated and then legalized through the Saudi Embassy in the respective state. This will ease the application for registration of the branch. With respect to the documents supplied by foreign companies, these are: the Certificate of Incorporation, Articles of Association, board resolutions, and the financial statements for the last 2 or 3 years.
Are there any specific licenses to obtain when opening a branch office in Saudi Arabia?
Yes, there are two licensing requirements to consider:
- the first one is the MISA license, which is the investment approval from the Ministry of Investment;
- the second one is the license issued by the authority in the sector the branch will operate in (there may be cases where such a business permit is not required).
Are there specific share capital requirements for a branch office?
The capital deposited by the parent company (SAR 500,000) is required to obtain the operational license.
How long does it take to register a branch office in Saudi Arabia in 2026?
The procedure is usually completed in approximately one month, if all the documents are ready in time and correctly drafted.
Does a Saudi branch require a local representative?
Yes, a resident general manager who resides in Saudi Arabia (a foreign citizen with a work permit can also be appointed) or a local agent must be appointed to oversee the activities.
We also invite you to watch our video below:
How are branches taxed in Saudi Arabia?
In the case of branches, the corporate tax imposed by the Tax and Customs Authority will target only the income it generates here.
As a permanent establishment, the branch office can benefit from the provisions of double tax treaties, provided that it operates in Saudi Arabia for a specific period.
Here are the main taxes to be paid by a branch office in Saudi Arabia:
- the corporate tax, which is levied at a rate of 20% for most companies (exceptions apply to oil and gas businesses);
- the value added tax, which is levied at a standard rate of 5%;
- the capital gains tax is applied at a rate of 20%.
Investors can find out more details on the registration of a branch office from our representatives. Please contact our team of agents for company formation in Saudi Arabia for consultancy services and advice. They can also help you with opening a company in Saudi Arabia.