Branch vs Subsidiary vs LLC in Saudi Arabia 2026

Foreign companies looking to enter the Saudi market in 2026 typically choose between three main structures: a branch, a subsidiary, or a limited liability company (LLC). Each carries different obligations for liability, tax, and setup, and understanding the differences helps businesses plan their entry correctly.

A branch is a legal extension of the foreign parent company. It has no separate legal personality, and the parent bears full liability for its operations. A subsidiary is a Saudi company owned by a foreign parent, usually formed as an LLC with its own separate legal personality and limited liability. The LLC itself is the underlying legal form used for most subsidiaries, allowing between 1 and 50 shareholders, with a one-person LLC also permitted.

Ownership, tax and capital

Under the current Investment Law and the licensing framework of وزارة الاستثمار, branches, subsidiaries, and LLCs can be up to 100% foreign-owned in most licensed activities, and a Saudi partner is generally not required. Standard corporate income tax on foreign-owned profits is 20% for branches and LLCs, while Saudi and GCC-owned shares are generally subject to 2.5% Zakat instead.

There is no single statutory minimum capital for all entities; it depends on the activity and licence conditions. In practice, a typical expected minimum for foreign LLCs and branches is around 500,000 ريال سعودي, and branch capital is usually evidenced by a deposit of that amount in a Saudi bank account.

Key government platforms

The setup process runs through several official channels. The investment licence is issued via the وزارة الاستثمار electronic portal, and commercial registration is obtained through the Ministry of Commerce services linked to ناجز for company articles and notarial services. After registration, قوى is used for labour and Saudization matters, Balady handles municipal permits, and the ZATCA portal covers tax and customs. نفاذ provides secure login and identity verification across these platforms.

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