LLC vs SJSC vs Branch vs a Temporary Licence
LLC, Simplified Joint Stock Company, branch, or a temporary licence for a single contract — a decision matrix for foreign investors choosing a Saudi vehicle.
Once MISA registration is in hand, the next decision shapes everything that follows: which vehicle to incorporate. Saudi Arabia's 2023 Companies Law gives foreign investors real choice, and the Simplified Joint Stock Company in particular has changed the calculus for anyone thinking about outside capital.
The LLC — the default
The limited liability company is the most common vehicle for foreign investors: flexible management, limited liability, straightforward to run. There is no hard statutory minimum capital, but MISA applies activity-based expectations — a foreign-owned LLC is commonly expected to show around SAR 500,000 in practice, while many service activities sit far lower. The old 50-shareholder cap is gone, single-shareholder LLCs are allowed, and an LLC can now own subsidiaries. It fits operating businesses, joint ventures and holding structures. It cannot list, and share transfers are less flexible than a joint-stock form.
The SJSC — for capital and scale
The Simplified Joint Stock Company, introduced by the 2023 Companies Law, is built for flexibility. One or more shareholders, no minimum capital, no mandatory board, and — crucially — multiple share classes (ordinary, preference, redeemable) plus the ability to issue sukuk and debt. That makes it the natural choice for startups, VC-backed companies and anyone anticipating funding rounds or a future listing. The trade-off: it is newer, with fewer settled precedents, so more has to be defined deliberately in the bylaws.
The branch — extending the parent
A branch is not a separate company; it is an extension of the foreign parent, backed by it and limited to the parent's activities. There is no separate share capital. It suits a foreign company that wants to operate in the Kingdom under its own name for a defined scope. The parent's documents must be attested, and MISA generally expects the parent to show a track record.
The temporary route — for a single government contract
Where a foreign company has been awarded a specific Saudi government or quasi-government contract, a temporary investment licence can let it execute that contract for its duration without establishing a permanent entity. It is useful for contractors on a defined-scope project — but it is not a substitute for a real base if you intend to stay in the market.
Choose around three questions: Will you raise outside capital? (SJSC.) Are you extending an existing company or building a standalone one? (Branch vs LLC/SJSC.) Are you delivering one contract or planting a flag? (Temporary licence vs a permanent entity.)
A quick orientation
- LLC — operating businesses, JVs, holdings; simple, no listing.
- SJSC — startups and capital raising; share classes; future IPO.
- Branch — extend a foreign parent, same activities only.
- Temporary licence — one government contract, no permanent entity.
- RHQ — regional management functions, with a distinct tax deal and its own rules (see our RHQ guides).
Not sure which vehicle fits?
We'll match the structure to your capital plans, your activity, and whether you're staying or delivering a single project.
Speak to an Advisor →This article is general information, current as of 2026, and is not legal or tax advice for any specific situation. Saudi rules are changing quickly — confirm current thresholds and lists with MISA or local counsel before acting.