UAE vs Saudi Arabia: Corporate Law Comparison for Foreign Investors

UAE: The primary vehicle for foreign investors is the Limited Liability Company (LLC), formed under Federal Decree-Law No. 32 of 2021. Since the 2020 amendments, 100% foreign ownership is permitted for most commercial activities without a local Emirati partner. Formation takes approximately 3-5 working days through the DED or free zone authority. No minimum capital requirement for most activities. Alternative structures include free zone companies (100% foreign ownership, sector-specific benefits) and branch offices.

Saudi Arabia: The 2022 Companies Law (Royal Decree M/132) modernised company formation significantly. The primary vehicles are the LLC (الشركة ذات المسؤولية المحدودة) and the Simplified Joint Stock Company (SJSC — شركة المساهمة المبسطة), the latter being a new and increasingly popular structure for startups and JVs. 100% foreign ownership is permitted for most sectors following the 2021 Foreign Investment Law amendments. Formation requires a foreign investment licence from the Ministry of Investment (MISA), which adds 5-15 working days to the process. Minimum capital requirements vary by sector — MISA-licenced activities typically require SAR 500,000 (USD 133,000) for services or SAR 30 million (USD 8 million) for industrial activities.

UAE: Corporate Tax at 9% on profits exceeding AED 375,000 (effective June 2023). VAT at 5%. No personal income tax. No withholding tax on dividends, interest, or royalties paid to non-residents. 100+ double tax treaties. Qualifying Free Zone Persons benefit from 0% Corporate Tax on qualifying income.

Saudi Arabia: Corporate Income Tax (CIT) at 20% on the profits of non-GCC-owned entities. Zakat (Islamic levy) at 2.5% on the net worth of GCC-owned entities (instead of CIT). VAT at 15% (increased from 5% in July 2020). Withholding tax on payments to non-residents: 5% on dividends, 5% on interest, 15% on royalties, 15% on technical services, 20% on management fees. 60+ double tax treaties. Special Economic Zones offer reduced CIT rates (5% for qualifying activities) and customs exemptions.

UAE: Federal Decree-Law No. 33 of 2021. All contracts fixed-term (max 3 years, renewable). Gratuity: 21 days/year (first 5 years) + 30 days/year, capped at 2 years' salary. Emiratisation: 2% annual increase for 50+ employees. Wage Protection System (WPS) mandatory. Probation: max 6 months. Non-compete: max 2 years.

Saudi Arabia: Royal Decree No. M/51 (Labour Law). Both fixed-term and indefinite contracts permitted. End-of-service benefits: 15 days/year (first 5 years) + 30 days/year. Saudisation: more aggressive quotas varying by sector (Nitaqat system — colour-coded bands: platinum, green, yellow, red). Minimum wage for Saudi employees: SAR 4,000/month. Wage Protection System (Mudad) mandatory. Probation: max 90 days (extendable to 180 by agreement).

UAE: Dubai Courts and Abu Dhabi Courts (civil law, Arabic). DIFC Courts (common law, English) for DIFC-connected disputes. DIAC, ICC, and LCIA are common arbitral institutions. UAE Arbitration Law (2018) based on UNCITRAL Model Law. New York Convention signatory.

Saudi Arabia: Saudi Courts of First Instance, Courts of Appeal, and Supreme Court (civil law, Arabic). Commercial disputes heard by Commercial Courts (established 2017). SCCA (Saudi Center for Commercial Arbitration) is the primary domestic arbitral institution. Saudi Arbitration Law (2012) based on UNCITRAL Model Law. New York Convention signatory. Board of Grievances handles administrative and government contract disputes. Court proceedings conducted in Arabic; foreign legal consultants cannot appear before Saudi courts.

UAE: Freehold ownership available to foreigners in designated areas (particularly Dubai — Investment Zones and Freehold Areas). RERA regulation provides buyer protection through escrow accounts and developer licensing. Dubai Land Department maintains transparent, digitalised title registration. No annual property tax. 4% transfer fee on purchase. Strong rental law framework (RERA rent index, Rental Dispute Settlement Centre).

Saudi Arabia: The 2021 Real Estate Ownership for Non-Saudis Regulations allow foreign individuals and companies to own property in Saudi Arabia (excluding Makkah and Madinah) with MISA approval. The market is developing rapidly under Vision 2030 — major developments at NEOM, The Line, Jeddah Central, and Diriyah Gate. Property registration through the General Authority for Real Estate (Saudi Real Estate General Authority — REGA). Off-plan sales regulation through the 'Wafi' programme (similar to Dubai's escrow system).