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Branches of foreign companies
Branches of foreign firms in Saudi Arabia are subject to regulations, laws and rules applicable to their activities. As with LLCs and joint stock companies, foreign businesses that establish branches in Saudi Arabia must deposit capital in a local bank. The deposited capital will be blocked until the Ministry of Commerce & Industry issues a certificate of registration for the branch.
Contracting firms must have at least a third-class contractor's classification certificate and completion certificates for projects undertaken outside Saudi Arabia. They must be able to prove they are financially solid and require minimum capital of SR1m. If they are working on an industrial project, the capital required will depend on a feasibility study carried out by the investor. If the project's capital requirements are more than SR5m, Sagia allows the company to deposit only 25 per cent of the capital in the bank.
Laws
Some of the legislation that companies operating under the Foreign Capital Regulation Law must adhere to include:
Anti-cover-up Law
The Anti-cover-up Law prohibits non-Saudis from conducting or investing in any business in the kingdom without a foreign capital investment licence issued by Sagia and prohibits any Saudi person from assisting in such activity.
Environmental Law
The Presidency for Meteorology and Environment (PME) is the entity responsible for regulating pollution control and related environmental matters. The PME (previously known as the Meteorology and Environmental Protection Administration, or Mepa) has issued environmental protection standards regarding ambient air quality, air pollution sources, receiving-water guidelines, direct discharge performance and discharge pre-treatment guidelines.
Saudi Arabia has also approved the General Environmental Regulation and the Environmental Assessment Regulation for the GCC. The General Environmental Regulation prohibits any act or failure to act that may result in adverse environmental effects and requires that precautionary and pre-emptive measures be implemented to ensure that such adverse effects do not occur as a result of the construction of any project. The Environmental Assessment Regulation applies to a long list of projects that may have an environmental impact and requires that an environmental assessment be conducted on projects that fall under its coverage.
Immigration
Non-Saudi citizens (other than GCC nationals) must obtain visas to enter the kingdom and must obtain permits to reside there. Visas and permits are not granted on arrival and must be obtained in advance.
Companies are required to register their employees' contracts with the Ministry of Interior before a residency permit can be issued. Each firm is permitted to have a certain quota of residency visas. Employees with residency visas who earn above a threshold salary may sponsor family members. Residency visas are valid for up to one year. Employees cannot work for anyone other than their sponsor and sponsorship cannot be transferred until the employee has worked for his original sponsor for at least two years.
Real estate
Ownership of real property is evidenced by title deeds.
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