Foreign investment in local enterprises
The government of Saudi Arabia realizes how beneficial foreign investors are to the local economy. That is why they offer many attractive incentives for doing business within the Kingdom.
Incentives for foreign investors
Except as otherwise noted and subject to limitations and/or exclusions published by the Saudi Government, the following incentives are provided to foreign and local investors:
- Foreign investors can own 100% of their investment projects in the Kingdom of Saudi Arabia (KSA), as applicable.
- Shall enjoy all the benefits, incentives and guarantees extended to Saudi-owned investments.
- Under the current Saudi Arabia Income Tax Law, shall pay a maximum of 20% tax on corporate profits above SR 100,000 (U.S. $26,700). Subject to the provisions of the Saudi Arabia Income Tax Law and Companies Regulations, are allowed to repatriate 95% of their capital, profits and dividends (5% is deducted as a withholding tax and there are no currency conversion or currency export restrictions).
- May freely transfer shares.
- Can enjoy incentives provided under the Protection and Promotion of National Industries Act, including exemption from customs duties on imports of machinery and equipment, raw materials and spare parts if imported for industrial use, and preferential for national products in government procurement.
- Can apply for industrial loans on favorable terms from the Saudi Industrial Development Fund (SIDF) or other lending agencies.
- Will benefit from the Kingdom’s WTO accession commitments and applicable bilateral investment protection and promotion agreements, signed by the government.
- Subject to Saudization requirements, can sponsor foreign employees, i.e., to obtain entry and exit visas and residency and work permits pertaining to the investment project.
- Can refer disputes to the Board of Grievances and Investment Disputes Settlement Committee.
- Can carry over current tax losses into future years to offset taxes on future profits.
- Can benefit from non-imposition on personal income tax.
- Shall receive the same treatment, protection and incentives accorded to a national investment since the Kingdom is a member of the Multilateral Investment Guarantee Agency (MIGA).
- Shall be provided pre-investment assistance by Saudi Arabian General Investment Authority (SAGIA), such as in:
- Conducting feasibility studies for industrial projects.
- Providing information and statistics for investment projects within the scope of Saudi Arabia’s development plans.