A branch office is a common legal structure for foreign companies looking to expand their business and operations in Saudi Arabia. A branch of a foreign company requires a license from the Ministry of Investment (MISA).
Under Saudi Arabian Foreign Investment regulations, international companies may establish a foreign company branch in the Kingdom with 100 percent ownership. As appose to a commercial agent, a branch has a more direct presence. Branches are restricted to an administrative role and may not engage in trading activities. Despite this, a branch office can be especially useful for a foreign company as a liaison office. A branch office offers the benefits of a physical presence without the formal requirements of a joint-venture company.
There is no legal distinction between a branch and the foreign business itself. Therefore, the business activities of the branch will be limited to those of the foreign company, and liability for the debts and other liabilities of the branch will be transferred to the foreign company.
The incorporation process to register a branch in Saudi Arabia is alike to registering a limited liability company (LLC) in Saudi Arabia. Below we have listed the requirements for registering a branch in KSA, an overview of the documentation, eligible activities to incorporate a branch in Saudi, and the key differences / pre-requisites for branch registration compared to an LLC registration in Saudi.