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Studies the market and writes reports, with an annual summary filed with MISA. Barred from contracts and from any commercial or investment activity in the Kingdom.
Branch office in Saudi Arabia: opening a foreign company branch, or setting up a subsidiary
A branch office extends your foreign company into Saudi Arabia without creating a Saudi company. It registers first with the Ministry of Investment (MISA), then on the commercial register at the Ministry of Commerce. This guide sets out the official requirements and documents, how the branch is taxed, and when a subsidiary (LLC) is the better choice.
- Income tax on branch profit (non-GCC parent)
- 20% of net adjusted profit5
- MISA processing time
- 10 working days, complete file2
- Withholding on profit remitted to head office
- 5%3
Information verified in October 2026 · Notes and sources
In brief
- A foreign company branch in Saudi Arabia has no separate legal personality: the parent company signs the contracts and is liable for all of the branch's debts.
- Opening one takes an investment registration certificate from the Ministry of Investment (MISA), then commercial registration through the Digital Branch service on the Saudi Business Center (Ministry of Commerce).
- For tax, the branch is a permanent establishment: its profit is taxed at 20%, and profit remitted to head office is treated as a dividend and bears 5% withholding tax.
- An LLC wholly owned by a foreign company pays the same rates, so the choice between branch and subsidiary turns on liability, partners and the nature of the project, not on tax.
What is a foreign company branch in Saudi Arabia?
A branch office is your foreign company operating in the Kingdom, not a new company. It trades under the parent's name, within the parent's registered activity, with no assets of its own.
The parent is therefore liable for everything the branch owes: tax, salaries, end-of-service awards, commercial claims. In return, the branch has no shareholders and no Saudi articles of association; a parent resolution opens it and appoints its manager.
The route is the same as for any foreign-owned company: MISA registration first, then commercial registration. Activity conditions (capital, Saudi participation, sector licences) apply in exactly the same way.
Requirements to open a foreign company branch (MISA and Ministry of Commerce)
Taken from the Ministry of Investment's Investor Guide (13th edition) and the Ministry of Commerce FAQ, both checked on 19 October 2026.
At the Ministry of Investment (registration certificate)
- Commercial registration of the parent company, certified, plus that of its own parent if it has a different nationality.
- Financial statements of the parent for the last financial year, certified.
- Any activity-specific requirements in section 5 of the guide: minimum capital, Saudi participation or a sector licence for some activities.
- Payment of the fee MISA sets on approval within 15 working days of notification; otherwise the registration is void.
At the Ministry of Commerce (branch commercial registration)
- The investment registration certificate issued by MISA.
- A certified partners' resolution of the parent to open the branch, naming the manager and stating the activity and location.
- The manager's written consent to the appointment.
- A Saudi Central Bank (SAMA) licence if the activity requires one.
Legalisation and translation
- Apostille for documents from countries party to the convention (in force for Saudi Arabia since 7 December 2022); consular legalisation otherwise.
- Certified Arabic translation of documents in any other language.
Branch vs subsidiary (LLC) in Saudi Arabia
The two structures foreign companies use most. Tax rates shown for a parent outside the Gulf Cooperation Council (GCC).
Table 1
| Point | Foreign company branch | Subsidiary (Saudi LLC) |
|---|---|---|
| Legal personality | No, an extension of the parent | Yes, separate from its shareholders |
| Liability | The parent, with all its assets | Limited to the LLC's capital |
| Owner | The parent alone, no partners | One or more partners, individuals or companies |
| Existing company abroad | Required, with financial statements | Not required; an individual can be a partner |
| Capital | Activity thresholds in the MISA guide | No general legal minimum; SAR 100,000 to 500,000 expected in practice; activity thresholds |
| Founding document | Parent resolution (opening, manager) | Published articles of association |
| Ministry of Commerce fees | Similar order to an LLC, no articles to publish (confirm at filing) | SAR 1,200 incorporation and SAR 500 publication, plus 15% VAT |
| Tax on profit | 20% of the branch's net profit | 20% on the foreign partners' share; 2.5% zakat on the Saudi or GCC share |
| Getting profit out | Remittance to head office: 5% withholding | Dividend to a non-resident partner: 5% withholding |
| Best for | An established company delivering a contract under its own name and track record | A long-term presence, partners, or keeping the risk inside the Kingdom |
How is a branch taxed: 20% income tax or zakat?
A branch of a non-resident company licensed to do business in the Kingdom is a permanent establishment. Its net profit is subject to 20% income tax, with a return filed with ZATCA (the Zakat, Tax and Customs Authority) within 120 days of the year end.
Zakat at 2.5% applies to Saudi and GCC ownership. If the parent is European, Asian or African, the branch pays income tax, not zakat.
ZATCA treats profit the branch remits to its head office as a dividend: 5% withholding tax, unless a tax treaty sets a lower rate. Technical services the head office charges to the branch and that the branch resells to Saudi clients also bear withholding tax; they remain deductible if they meet the conditions for allowable expenses.
An LLC wholly owned by a foreign company also pays 20%, and its dividends bear the same 5%. Tax does not decide between the two. VAT at 15% applies to both on the same terms.
How to open a branch office in Saudi Arabia, step by step
The usual route for a services branch. Durations are estimates, except the published MISA processing time. Allow 4 to 8 weeks in total to the commercial registration, document preparation included.
- 1
Check the activity and whether a branch fits
Match the activity code against the activities open to foreign investment and their conditions. If the activity requires Saudi participation, a branch is ruled out: it cannot have partners.
- Qui
- Tasis Partners with you
- Durée
- 1 to 3 days
- 2
Gather and legalise the parent's documents
Commercial registration, last year's financial statements, the resolution opening the branch and appointing the manager, then apostille or legalisation and certified Arabic translation.
- Qui
- You and the parent company
- Durée
- 1 to 3 weeks
- 3
Register with the Ministry of Investment
Online application, then payment of the fee set on approval within 15 working days to receive the investment registration certificate.
- Qui
- Authority: MISA
- Durée
- 10 working days (official)
- 4
Enter the branch on the commercial register
Through the Digital Branch service on the Saudi Business Center, with the MISA certificate, the opening resolution and the manager's consent.
- Qui
- Authority: Ministry of Commerce
- Durée
- A few working days, confirm at filing
- 5
After the commercial registration
Chamber of commerce, ZATCA and GOSI (social insurance) registration, Qiwa and Muqeem accounts for visas and residence permits, then a bank account in the branch's name.
- Qui
- You with the authorities and the bank
- Durée
- 2 to 6 weeks
Branch, liaison office or regional headquarters?
The Investor Guide lists other structures that are often confused with a branch. The key difference is the right to earn revenue.
Foreign company branch
Revenue
Signs, invoices and employs within its registered activity. The parent answers for its obligations.
Regional headquarters (RHQ)
Regional management
Set up as a company or as a registered branch of a foreign company. No revenue-generating activity outside its licence, and at least 15 full-time employees within a year. See regional headquarters.
Common mistakes with a branch office
Frequently asked questions
What are the requirements to open a branch of a foreign company in Saudi Arabia?
The parent must be an existing, registered company and its activity must be open to foreign investment. MISA asks for its commercial registration and last year's financial statements, certified. The Ministry of Commerce then asks for the MISA certificate, a certified opening resolution and the manager's written consent.
Can a branch office be 100% foreign-owned? Is a Saudi partner required?
Yes, it belongs entirely to the parent and has no partners. If your activity requires Saudi participation, a branch does not work: you need a company with a Saudi partner.
Can a branch office generate revenue in Saudi Arabia?
Yes, within its registered activity. It contracts in the parent's name and registers for VAT once it reaches the threshold. A liaison office cannot.
How much does it cost to open a branch in Saudi Arabia?
MISA sets its fee case by case on approval; advisory firms report a range from zero to about SAR 62,000 a year depending on the activity. Ministry of Commerce fees are close to those of an LLC, with no articles to publish. Legalisation and translation come on top; confirm every amount at filing.
How long does it take to open a branch office?
MISA processes a complete file in 10 working days according to its guide. Allow 4 to 8 weeks in total to the commercial registration; the longest step is preparing and legalising the parent's documents.
Does a branch pay income tax or zakat?
With a parent outside the GCC, the branch pays 20% income tax on its net profit, and profit remitted to head office bears 5% withholding. Zakat at 2.5% applies to Saudi and GCC ownership.
Branch or subsidiary: which should a foreign company choose?
A branch suits an established company delivering a specific contract under its own name. A subsidiary suits a long-term presence, a project with partners, or keeping the risk inside the Kingdom. Tax is the same in both cases.
Notes and sources
- 1.Ministry of Commerce: FAQ, requirements to open a branch for a foreign company (checked 19/10/2026)
- 2.Ministry of Investment: Investor Guide, 13th edition (09-2026), service 3.1.1 and section 5.1
- 3.ZATCA: General Guideline for Withholding Tax (permanent establishment, dividends, 5% rate)
- 4.PwC Worldwide Tax Summaries: Saudi Arabia, corporate residence and permanent establishment
- 5.PwC Worldwide Tax Summaries: Saudi Arabia, 20% income tax and 2.5% zakat
- 6.Ministry of Commerce: services for foreign companies via the Digital Branch, including issuing foreign company branches
- 7.Ministry of Commerce: Establishing a Company Under an Investment License (fees)
Information verified in October 2026. Amounts and timelines are observed ranges provided for information only. Government fees are set by Saudi authorities and may change: they are confirmed in writing in the quote before you commit to anything.
See also
Branch or subsidiary: which structure fits your Saudi contract?
We scope your project and coordinate its delivery with licensed professionals in Riyadh. We start from your activity, the contract's duration and your company's documents, then recommend the right structure in writing. A free first call, then a written fixed-price quote.
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