Minimum capital for a foreign-owned company

Where the "no minimum capital" line comes from

It is not wrong; it answers a different question. A Saudi setup consultancy's cost page states there is no minimum capital in most activities. The ministry's own table agrees in its way: of the 8 listed activity types in it, only the trading rows carry a capital amount. What that line leaves out is that the table is a separate gate for foreign investment, and trading sits on it.

So both statements can sit side by side on the internet and both be sourced. The one that governs your budget depends on who owns the company and what it sells.

Trading is a deliberate gate

Read the two figures together and the policy is plain. Bring in a Saudi partner with a quarter of the company and the capital requirement drops by SAR 3,333,333. Keep full ownership and you pay for it in capital, plus a track record test: the guide also requires a presence in at least 3 markets.

The five-year commitment behind full foreign ownership

Section 5.1.3 of the guide attaches obligations that last well beyond registration. A wholly foreign commercial activity must train 30% of Saudi employees every year, meet the localization rates the labour ministry sets, and plan for Saudis in senior management within its first five years. On investment it chooses one of two options.

• Option 1: invest at least SAR 300 million over five years from the licence, including SAR 30 million of cash capital.
• Option 2: invest at least SAR 200 million over the same five years, again including SAR 30 million of cash capital, and meet one or more further standards: at least 30% of the products it distributes locally made in the Kingdom, at least 5% of total sales allocated to research and development in the Kingdom, or a unified logistics and after-sales centre.

Put differently, the cash capital is about 10% of the option 1 commitment. The rest is investment the company has to show over five years. Anyone modelling a fully foreign trading arm should model the five-year number, not just the capital line.

What this means for a first entry

Consider an overseas manufacturer that wants to sell into Saudi Arabia. A wholly owned trading company brings the capital figure, the market-presence test and the five-year commitment. A trading company with a Saudi partner holding the minimum share brings a lower capital figure and a partner. A services entity that supports a local distributor brings neither capital figure, because services are not on the trading rows. Which one fits is a commercial choice, but the costs of each are now visible before the first meeting.

Ownership floors for other activities

Where capital is not set, ownership sometimes is. Communications activities require 40%, supportive communications 30%, and professional activities with a Saudi partner 25%, with the further condition that a non-professional partner's share must not exceed 30%.

Full foreign ownership with conditions attached

Three entries show the shape of the rules. An engineering consultancy can be wholly foreign owned, but must have a presence in 4 countries and 10 years' experience. A wholly foreign legal activity needs a Ministry of Justice approval letter. Recruitment and domestic worker rental registration requires a home commercial registration issued at least two years before applying, three years of Saudi Embassy-authenticated financial statements, and a certificate that no judicial ruling for labour or human trafficking violations has been issued against the partners. None of them sets a capital figure. All of them replace capital with proof.

Before you commit to a number

Capital requirements attach to the activity code you register, not to the business you describe in a meeting. Two activities that sound alike in English can sit on different lines of the table. Confirm the exact ISIC activity in writing with the ministry or your consultant before you capitalise anything, and remember that registration has two tracks: available or restricted activities.

The routes side by side

GCC investors and the table

The table is written for foreign investment. A GCC investor is treated as a local investor, unless there are foreign investors in the ownership structure of the GCC company in its home country. A group owned entirely by GCC nationals should confirm that treatment first, because it can take the company outside these capital and ownership rows altogether.

Frequently asked questions

Is there a minimum capital for a foreign company in Saudi Arabia?

In the ministry's activity table, only trading has one: SAR 30,000,000 fully foreign owned, or SAR 26,666,667 with a Saudi partner.

Does a services company need minimum capital?

The table sets no capital figure outside trading. Check the exact activity code, because some activities carry ownership or evidence conditions instead.

What else does a fully foreign trading company commit to?

A five-year investment of SAR 300 million, or SAR 200 million with local manufacturing, research or logistics commitments, plus training 30% of Saudi employees a year.

How much must a Saudi partner own in a trading company?

At least 25% on the partner route.