Branch of a foreign company&

A branch of a foreign company in Saudi Arabia is an extension of a foreign company's operations into the Kingdom.

Foreign Ownership: A branch of a foreign company is wholly owned by the foreign company and is not considered a separate legal entity from its parent company.

Registration: To establish a branch in Saudi Arabia, the foreign company must obtain a commercial registration certificate from the Ministry of Commerce and Investment (MOCI). The branch must also appoint a local agent who is a Saudi national or a company wholly owned by Saudi nationals.

Activities: A branch in Saudi Arabia can engage in the same activities as its parent company, subject to any restrictions or regulations applicable to foreign companies in the Kingdom.

Taxation: A branch of a foreign company is subject to corporate income tax in Saudi Arabia on its profits derived from activities in the Kingdom. The standard corporate tax rate in Saudi Arabia is 20%.

Liability: The foreign company is liable for the debts and obligations of its branch in Saudi Arabia. However, the liability of the foreign company is limited to the assets of the branch in the Kingdom.

Reporting Requirements: A branch of a foreign company in Saudi Arabia is required to submit annual financial statements to the General Authority for Zakat and Tax (GAZT) and comply with other reporting requirements applicable to foreign companies.

Branch Closure: The closure of a branch in Saudi Arabia requires formal deregistration with the MOCI and settlement of any outstanding liabilities.

Branch vs. Subsidiary: Establishing a branch of a foreign company may be preferable to setting up a subsidiary in terms of cost and administrative requirements, as a branch does not require the creation of a separate legal entity.