Branch vs Subsidiary vs LLC in Saudi Arabia

Foreign investors looking to enter the Saudi market face a key early decision: establish a wholly foreign-owned LLC (subsidiary), open a branch of the foreign parent company, or register another LLC form. Each path runs through وزارة الاستثمار for foreign-investor registration and the Saudi Business Center/Ministry of Commerce for incorporation and commercial registration.

For a foreign-owned LLC, investors first obtain foreign-investor registration from وزارة الاستثمار, then incorporate via the Ministry of Commerce. The commercial registration costs SAR 1,200, plus a SAR 500 publication fee and 15% VAT. A key advantage is that members' liability is generally limited to their capital contributions.

A branch requires وزارة الاستثمار registration, a reserved trade name, the parent company's attested articles, an approved parent-company resolution, and sector approval where needed. The branch commercial-registration fee is SAR 1,600, while one listed establishment service for an LLC-form branch is SAR 600, separate from the registration fee. Importantly, a branch is not a separate legal person and remains an extension of the foreign parent.

Fees, deadlines, and compliance

Foreign ownership is permitted in many activities, but restricted or regulated sectors may require additional approvals from bodies such as the Saudi Central Bank, the Capital Market Authority, or another regulator. After وزارة الاستثمار approval, the registration fee must be paid within 15 business days of notification, or the registration is treated as void.

Companies must annually confirm their commercial-registration data — SAR 1,200 for an LLC and SAR 1,600 for a branch — with a SAR 100 fee to update registration data. Failing to confirm within 90 days of the due date can suspend the registration. After registering, businesses should enroll with ZATCA, open labor and social-insurance files when hiring, open a Saudi bank account, and secure municipal and sector licenses.

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