The government continues to pursue economic reform and diversification to make it easier to export to Saudi Arabia

An Introduction to Saudi Arabia

  • The Kingdom of Saudi Arabia is the largest Arab state and was founded in 1932
  • Saudi Arabia has a population of 32 million with foreign expats making up 33%
  • The currency is the Saudi Arabian Riyal (SAR)
  • Arabic is the first language, with English widely spoken and used in business. However any correspondence with government departments, should be in Arabic e.g. legal documents or contracts

Vision 2030

The government continues to pursue economic reform, diversification and promoting foreign investment, since the announcement of Vision 2030 in 2016. Vision 2030 covers a number of ambitious reforms to diversify the economy away from oil with three main themes; The National Transformation Program, The Fiscal Balance and The Public Investment Fund. These programs have implemented many changes for business and investment since the program was first launched.

Foreign Currency Control

Saudi Arabia imposes no foreign exchange restrictions on capital receipts made by residents or nonresidents, with the exception against transactions with Israel. Officially, the Saudi Riyal (SAR) is linked to the International Monetary Fund’s Special Drawing Rights. Since 1981, however, the Saudi Arabian Monetary Authority has instead chosen to peg the SAR to the US dollar with official currency exchange rate set at SAR 3.75 = $1.


VAT was implemented from 1 January 2018 at the standard rate of 5%. It covers all goods and services bought and sold by businesses apart from some exceptions such as insurance, healthcare and residential rent.

Legal and regulatory framework

Saudi Arabia is ruled by an absolute monarchy and has no legally binding written constitution. However, in 1992, the Basic Law of Saudi Arabia was adopted by royal decree. The Basic Law outlines the responsibilities and processes of the governing institutions.

The legal system in KSA is based on Shari’a, Islamic law which has been supplemented by regulations issued by royal decree covering modern issues such as intellectual property and corporate law. Royal decrees (Nizam) are the other main source of law and are referred to as regulations rather than laws to indicate that they are subordinate to the Shari’a. Royal decrees supplement Shari’a in areas such as labour, commercial and corporate law.

Additionally, other forms of regulations (lai’hah) include Royal Orders, Council of Ministers Resolutions, Ministerial Resolutions and Ministerial Circulars, these are similarly subordinate to Shari’a. Any Western commercial laws or institutions are adapted and interpreted from the standpoint of Shari’a law.

What we do

  • Company formation
  • Business advisory
  • Regulatory compliance

Business set up

Foreign investors can operate in Saudi Arabia through the following structures:

  •         Limited liability companies
  •         Foreign office branch
  •         Commercial agencies
  •         Joint stock companies
  •         Technical and scientific offices (representative offices)

For foreign investors, the most common forms of set up are limited liability companies (LLC) or a foreign office branch.

The ability for foreign investors to undertake business activities are limited in the absence of them having a formal presence in Saudi Arabia. In the absence of this, business activities may potentially be in violation of the Anti-Fronting Law, unless the organization has local agents or distributors appointed.


Advisory throughout the process of setting up your company in the Kingdom will put you in a favourable position when beginning operations. Advisory will ensure that you choose the best company structure for your company in the Kingdom, for where you are now and where you plan to expand to in the future. Advisory will ensure that you remain compliant to laws and regulations throughout the process and provide you with sustainable strategies to use for innovation and growth.