Our previous article provided a comprehensive overview of the diverse types of foreign investment licenses available in Saudi Arabia. Now that investors have identified the specific license best suited for their business activities, the next logical step is understanding requirements and attestation.

Before any foreign investment license is granted, a series of prerequisites must be met, each tailored to the specific license type. Serving as the foundation of the entire landing process, this includes minimum capital requirements, Saudi ownership percentages, and essential documentation. Attestation is the process of verification of documents and is another crucial part that all foreign investors must undergo. 

In this article, we'll break down some of the main requirements for foreign investment in Saudi. We'll also give a quick overview of the attestation process, making it easier to understand how to set up your business in the Kingdom.

Requirements 101:

• What is the Minimum Capital Requirement?

Although most foreign investment licenses do not require any capital, there are a few exceptions where a minimum capital requirement must be fulfilled. This includes commercial/trade, public transportation, real estate brokerage, and property financing, etc. 

• Do you Need a Saudi Partner?

The majority of foreign investment licenses may be 100% foreign-owned. However, there are some license types where partial ownership must be given to a Saudi partner (citizen or entity). This ranges from 20% to 40% of the company and is only applicable to a few licenses, such as insurance, property financing, commercial/trade, public transportation, etc. 

Check out this table for a more detailed understanding of all minimum capital and Saudi ownership requirements.

• What is the Eligibility Base Criteria?

When pursuing most types of licenses for foreign investment in Saudi Arabia, there are a few major conditions that applicants must meet. 

Note: These are just the very minimum requirements that businesses must fulfill, certain licenses may have additional conditions.  

• Established Business in Home Country: To be eligible for a foreign investment license, you must already have an established business in your home country with an audited report of at least the last year of operation. New companies may not be opened by foreigners, they can only expand existing ones. 
• Consistency in Business Domain: Many licenses require that the business operates in a domain or industry similar to that in its country of origin. For example, you may not operate a retail company in your home country and plan to venture into real estate in Saudi Arabia.
• Positive Cash Flow (Preferred): Companies that are performing well are given greater preference when awarding licenses as it is an indication of their financial stability. This is an industry-focused condition, with it being more important for certain license types. 

To prove the above points, certain documents must be submitted as part of your application. This is discussed in the Documents & Attestation section below. 

Special Eligibility: Entrepreneurial License

The entrepreneurial license is a special type of service license for tech entrepreneurs. Unlike traditional licenses, this allows the opening of a business headquartered in Saudi Arabia that has no mother company, subject to certain conditions. This license requires applicants to provide a support letter or proof of a project from a venture capitalist fund, business incubator/accelerator, or angel group.

We will discuss this in detail about this license in a future article, so stay tuned. 

Documentation

To prove the eligibility base criteria mentioned above, the following documents must be attested and submitted as part of your foreign investment license application. 

Company Documents:

• Certified Commercial Registration: Official documentation proving the establishment of the company as a legal entity in Saudi Arabia.
• Articles of Association: Legal document outlining the internal regulations and procedures governing the company's operations, ownership, and management structure.
• Last-Year Financial Auditing Report: Financial statement audited by a certified accountant. This is waived for tech companies.

Additional Documents

Board of Resolution/Power of Attorney: Document authorizing either a general manager or a third-party representative to act on behalf of the company in matters related to opening a company in Saudi Arabia. This is the only document that must also be notarized. 

Attestation

The attestation process is notarized by the registrar or relevant authority, typically the Ministry of Foreign Affairs, in your home country first, to certify their authenticity and legality. Then, these documents are attested in Saudi Arabia, typically through the consulate or Saudi Embassy which approves their validity and compliance with local regulations. 

Alternative Option: Apostille Attestation

Another option is apostille attestation, which bypasses embassy and MOFA involvement, simplifying and reducing the cost of document authentication for international use. The top countries in the MENAP region that are part of the Apostille Convention include Bahrain, Oman, Morocco, and Pakistan. 

Saudi Expansion Series

This article is part of the Saudi Expansion series, aiming to educate international entrepreneurs and business owners on Saudi Arabia's foreign investment regime for a smooth landing. With a focus on original, technical, and informative content, our goal is to get business owners closer to securing that first riyal in their pocket.