Doing Business in Saudi Arabia: A Guide for Investors


In 2022, the World Bank ranked Saudi Arabia 62nd among 190 economies in the ease of doing business. This ranking is clear enough to state the region’s commitment towards economic prosperity. But why Saudi Arabia is considered such a favorable destination for doing business? 

 

It’s because of the following reasons: 

 

- Infrastructure: In the last few years, Saudi Arabia has made significant investments for modernizing its infrastructure, including transport, healthcare, and energy.  

 

- Ease of starting a business: The Kingdom has also eased up its processes for starting a business and made several reforms for making it more welcoming for foreign investors. 

 

- Ease of getting permits: Saudi Arabia has streamlined its registration procedures, including visa applications and have also made it easier to get construction permits and electricity. 

 

- Trading Ease: With numerous reforms in its taxation laws and customs, it trading has become easier.  

 

With all these factors playing in its favor, the Kingdom has become a hotspot for global investors. However, businesses considering to make an entry into this fast-growing market need to stay updated with the latest developments. 

 

This post gives you quick insights into the essentials of doing business in Saudi Arabia including Headquarters (RHQ) program, Special Economic Zones (SEZs) and Investment Law reforms, incentives, and taxation, practically the key things shaping the region’s business ecosystem. Let’s begin. 


- The Regional Headquarters (RHQ) Program 

Saudi Arabia's Regional Headquarters (RHQ) Program is an initiative to encourage multinational corporations (MNCs) to establish their regional headquarters in the country. The program is part of Saudi Arabia's Vision 2030 strategy to become a regional business hub. 

Key Benefits of the RHQ Program 

 

  • Tax incentives: A 30-year exemption from corporate income and withholding tax.  

  • Saudization exemption: A 10-year exemption from Saudization requirements. 

  • Visa limit exemptions: Unlimited visas for RHQ personnel. 

  • Professional accreditation waiver: RHQ workers with valid accreditations in their native countries are exempt. 

  • Government tendering priority: RHQs are prioritized when bidding for government contracts. 

 

RHQ License 

RHQ Licenses are issued by MISA. There is an annual fee and a one-time service fee for the first year. However, MISA can revoke an RHQ license if the company doesn't meet certain requirements.  

 

- Investment Law Reforms 

Saudi Arabia's new investment law, which came into effect in February 2025, is meant for the betterment of Saudi Arabia’s investment environment and contribute to economic development. 

 

The New Investment Law replaces the Foreign Investment Law, which was in place since April 2000. The major changes in the law includes the following:  

 

  • Investor rights: Consolidates investor rights and freedoms into a single framework.  

  • Investor protections: Strengthens rule of law, fair treatment, property rights, and intellectual property safeguards.  

  • Registration process: Replaces complex licensing requirements with a more straightforward system. 

  • Penalties: Introduces new penalties for breach, which vary depending on whether the breach is serious or non-serious.  

  • Dispute resolution: Allows investors to agree to resolve disputes through alternative dispute resolution methods, including arbitration, mediation, and conciliation. 

 

- Special Economic Zones (SEZs) 

To give a boost to its economic development, Saudi Arabia has established multiple Special Economic Zones (SEZs) across its major regions. These zones are part of the National Investment Strategy and are designed to help with economic diversification and promotion of private sector. Some important SEZs in Saudi Arabia are: 

 

1) King Abdullah Economic City (KAEC): Located in Makkah province, this zone focuses on the automobile supply chain, consumer goods, and more. 

 

2) Ras Al Khair: This zone is situated in the Eastern Province and is focused on shipbuilding, maintenance, repair, and operations (MRO). 

 

3) Jazan: Located in Jazan province, this zone supports industrial sectors under food processing, metal conversion, and logistics. 

 

4) Cloud Computing: Located in Riyadh, this zone focuses on cloud computing services and houses data centers, research labs, and office spaces to foster innovation. 

 

5) Logistics Zone (SILZ) – Located at King Khalid International Airport in Riyadh, SILZ is designed to streamline customs, investor-supplier interactions, and logistics operations. 

 

Business Benefits of SEZs 

1) Tax incentives: Companies in SEZs may receive a reduced corporate income tax rate, exemption from customs duties, and 0% withholding tax on profits repatriated abroad. 

2) Flexible regulations: SEZs may have more flexible regulations for foreign talent. 

3) Attractive to foreign investment: SEZs are designed to attract high-quality investments and foreign direct investment. 

 

- Visa Reforms 

Saudi Arabia has recently implemented visa reforms to make it easier for expatriates to work in the country. These reforms are part of the country's Vision 2030 plan. Some major reforms include: 

 

- Pre-verification: Workers need to pre-verify their academic and professional qualifications before applying for a work visa. 

 

- Stricter certification: Certain jobs require stricter certification requirements. 

 

- Online extensions - Expatriates can renew their residency permits and extend their exit and re-entry visas online through Absher and Muqeem portals 

 

- Visa on arrival: Residents of the United States, United Kingdom, and European Union can apply for a visa on arrival. 

 

These reforms are designed to ease the entry for investors and professionals seeking to explore opportunities in the Kingdom. 

 

- Corporate Tax Policies 

Currently, the Kingdom imposes a corporate income tax at 20% and a Zakat tax at 2.5%, (applicable under Islamic law). The competitive tax rates along with various incentives and deductions, make Saudi Arabia an attractive jurisdiction for multinational corporations. 

 

Invest in Saudi Arabia: A Promising Business Destination 

Saudi Arabia has introduced several reforms to foster foreign investment and boost its economic development. The Kingdom’s efforts in streamlining regulations, establishing economic zones, and reforming visa renewals displays its progressive approach. 

So, if you’re thinking of doing a business in Saudi Arabia, the time is ripe. Whether you’re looking for an LLC company formation in Saudi Arabia, or simply want to explore new business prospects, Saudi Arabia is the place to be.  

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