Obligations of Foreign Companies in Saudi Arabia: A Guide to the 1443H Companies Law

The Companies Law of 1443H permits foreign companies to be established and operate in Saudi Arabia, and regulates their obligations in Part Eleven of the Law, an important legal development that did not exist in the previous Companies Law. In this article Shehab Alsaleh Lawyers & Legal Advisors explains the main legal obligations of foreign companies in Saudi Arabia.

1. Information Required on Company Documents

Article 237 of the Companies Law provides that:

Every branch or representative office of a foreign company shall state on all its papers, documents and publications its address in the Kingdom, in addition to the full name of the company, its address and its head office.

Branches and representative offices must therefore display the following on all official documents and correspondence (invoices, contracts, publications, official papers, etc.):

  • The address of the branch or office in the Kingdom
  • The full name of the parent company
  • The parent company’s address and head office

2. Financial Obligations and Financial Statements

Article 238 of the Companies Law provides that:

  1. The application to register a branch of a foreign company must state the start and end dates of the branch’s financial year.
  2. Except for representative offices, a branch of a foreign company must prepare financial statements for its activity in the Kingdom in accordance with the accounting standards approved in the Kingdom, and file them together with the auditor’s report within (six) months of the end of the financial year.
  3. The auditor may be appointed by decision of the branch manager under authority delegated by the foreign company.

These obligations separate the branch’s accounts from those of the parent company, enhancing transparency and tax and zakat oversight.

3. Domicile of the Foreign Company

Article 239 provides that:

The branch or representative office of a foreign company in the Kingdom shall be deemed its domicile with respect to its activity and business in the Kingdom, and all laws in force in the Kingdom shall apply to it.

In other words, having a licensed branch or representative office makes the foreign company fully subject to Saudi laws and courts for all its activities in the Kingdom.

4. Liability for Unauthorized Activities

Article 240 provides that:

If a foreign company carries on its activity before completing the licensing procedures and registering with the Commercial Register, or carries out business beyond what it is licensed for, the company and the persons who carried on that activity shall be jointly liable for it.

For the full text of the Companies Law: Bureau of Experts – Companies Law

5. Temporary Registration

Article 241 allows a foreign company to be registered temporarily where its presence is for specific works and a defined period. The registration ends when the works are completed and rights and obligations have been settled, with the possibility of continuing after meeting the statutory requirements.

This mechanism is particularly useful for major temporary projects requiring foreign expertise for a limited period.

How Can Shehab Alsaleh Law Firm Help You Establish and Manage a Foreign Company?

We provide an integrated legal solution that ensures compliance and sustainability. For the initial steps of foreign investment, visit the Ministry of Investment (MISA).

Our services include:

  1. Choosing the most suitable legal form and clarifying special restrictions and approvals
  2. Drafting and electronically authenticating incorporation documents
  3. Submitting applications and obtaining official licenses
  4. Legal representation and addressing any observations from government authorities
  5. Post-incorporation services (tax and zakat registration, governance, meetings, initial contracts, annual compliance)

If you are a foreign company or entrepreneur seeking to enter the Saudi market with confidence and full compliance, contact us through our contact page.