Can I Start a Business in Saudi Without a Sponsor in 2025?
Can you start a business in Saudi Arabia without a sponsor in 2025? The answer is yes, but with a few important conditions. While Saudi Arabia now allows 100% foreign ownership in many sectors, you’ll need to have an existing company in your home country before you can take full advantage of this. Let’s explore what that means and how you can navigate the process!
1. Yes, 100% Foreign Ownership Is Now Allowed in Most Sectors
Saudi Arabia has made significant changes in the business landscape as part of its Vision 2030 goals. In 2025, 100% foreign ownership is now allowed in many industries, especially those that align with the Kingdom’s economic diversification plans.
This is a huge shift from the past, where foreign investors were required to partner with a Saudi sponsor, typically owning only up to 49% of the business.
The sectors now open for full foreign ownership include areas like technology, e-commerce, consulting, and manufacturing—but certain industries, like oil & gas, defense, and media, still require a local partner.
2. The MISA Investment License Is Key
To set up a business without a sponsor, you will need to apply for a MISA (Ministry of Investment of Saudi Arabia) investment license.
The MISA license gives foreigners the legal permission to own and operate businesses in the Kingdom, fully independent of local partners.
The process includes submitting business plans, financial statements, and proof of expertise in your field.
MISA will also assess your capital capacity, so it’s crucial to have a clear, viable plan for the business.
The application process can take several weeks to months, depending on the complexity of your business and whether all requirements are met.
3. Certain Sectors Still Require a Local Sponsor
While Saudi Arabia has opened many sectors to foreign ownership, strategic sectors such as defense, security, broadcasting, and media still require local sponsors or partners to protect national interests.
This is mostly in place to ensure cultural alignment, national security, and preserving local control over industries critical to the country.
If your business falls into one of these categories, you’ll need a local sponsor to move forward, though the ownership structure may vary depending on the sector’s regulations.
4. Capital Requirements Can Vary
While Saudi Arabia offers full foreign ownership, the required capital investments can vary depending on the nature of the business and sector.
For many sectors, the minimum capital required is around SR 500,000, but it can go much higher for certain industries.
For example, investment or finance-related businesses may require much higher capital to prove financial stability and credibility.
You’ll also need to ensure that the capital is properly funded—you can’t just show it as a paper investment; you’ll have to demonstrate that it’s available and can be used to run the business.
5. Document Attestation and Translation Are Essential
When applying for a business license in Saudi Arabia, you will need to attest all your legal documents (such as incorporation certificates, financial reports, and board resolutions) from your home country.
These documents must be authenticated by the Saudi embassy in your home country and then translated into Arabic by a certified translator.
This step is essential to ensure the documents meet Saudi regulatory standards. Failing to follow the document attestation process correctly can lead to delays or rejection of your application.
6. Operational Requirements and Compliance
After securing the MISA license, foreign-owned businesses must comply with Saudi regulations. These include:
VAT registration and payments (currently at 15%).
ZATCA filings for tax-related compliance.
GOSI (General Organization for Social Insurance) contributions for employees.
Saudization requirements—ensuring that a certain percentage of employees are Saudi nationals. This applies even if you’re starting with a small team.
Labor laws in Saudi Arabia are also stringent. Foreign business owners must ensure their employees’ working conditions comply with local labor laws, including working hours, holidays, and rights.
7. No Need for a Saudi Physical Presence (in most cases)
Contrary to common belief, foreign investors do not always need to have a physical office space in Saudi Arabia. For many types of businesses, a virtual office may suffice.
However, this varies depending on the business type. Some industries—such as those in trading or commercial activities—might require a physical office.
A virtual office can include a registered address, phone line, and other services, but it allows you to minimize overhead costs, especially for startups or small businesses testing the market.
8. Why You Need the Right Consultant to Navigate the Process
Navigating the process of setting up a foreign-owned business in Saudi Arabia can be complex. A business consultant familiar with local regulations, documentation processes, and licensing requirements can help save you time and avoid costly mistakes.
Consultants can also assist with:
Ensuring compliance with tax laws and labor regulations.
Advising on the best business structure for your goals.
Helping you navigate local customs and build relationships with local stakeholders.
Working with an experienced consultant like Helpline Group can streamline the process and ensure that your business starts on the right foot.