This journey assumes
- The Korean company is a construction and engineering contractor incorporated in Korea and is not a financial institution or a defence contractor.
- The project is a building, infrastructure or installation project in Saudi Arabia lasting more than six months, for a government or government-linked client.
- Plant, equipment and some materials will be shipped from Korea, and Korean managers and engineers will work on site alongside locally hired staff.
- The work is not in oil exploration, drilling or production or any other activity closed to foreign investment.
- Rules are stated as at 19 October 2026; regional headquarters and classification rules have been changing and must be rechecked at the time of bidding.
If any assumption is wrong for your business, the conclusions change. Ask WONE Global to re-run the analysis with your facts.
Both sides of the border, issue by issue
Each row is one part of the work. The left and right columns show what each country's rules require, so you can see where one side's decision constrains the other.
Moving money out of Korea and registering the investment in Saudi Arabia
Funding a Saudi company or project office from Korea is an overseas direct investment that runs through the Korean company's designated foreign exchange bank. In Saudi Arabia every foreign investor must register with the Ministry of Investment before investing, and a foreign company that has already won a government contract can use a temporary registration tied to that contract.
- The Korean parent's investment in a Saudi company is reported as an overseas direct investment under the Foreign Exchange Transactions Act through its designated foreign exchange bank, which processes the report when the money is remitted. Post-investment and periodic reports follow, and a missed or late report can itself be a breach.1
- Confirm with the foreign exchange bank how a Saudi branch or site office (as opposed to a subsidiary) is reported and funded, because the source read does not deal with branches separately and the regulations set the detailed thresholds.1
- A foreign investor must register with the Ministry of Investment (MISA) before making any investment in Saudi Arabia; the Investment Law replaced the old licensing system with registration.2
- For regular registration the Korean company supplies its commercial registration and last year's financial statements, each certified or authenticated by the Saudi Embassy, plus any activity-specific documents. Allow time for this authentication in Korea.3
- A foreign company that has already been awarded a government contract can take MISA's temporary registration instead, using the authority's letter or the contract itself. It ends with the contract and the fee for the whole period must be paid within 30 days of notification.4
Choosing how to be present in Saudi Arabia for the project
The realistic choices are a temporary registration for one awarded government contract, a Saudi limited liability company or joint stock company as a lasting delivery vehicle, or one of those with a regional headquarters if government clients require it. The regional headquarters rule for government contracting appears to have been revised recently, and its current form must be checked before the structure is fixed.
- Whatever the Saudi vehicle, Saudi tax on the project profits is credited against Korean corporate tax on the same income under the treaty, so the choice mainly changes where tax is first paid and how profits come home, not whether Korea taxes them.56
- Working through a temporary registration or site office without a Saudi company leaves the Korean company itself exposed to Saudi tax once the project passes six months, and directly liable for the project.74
- MISA's investor guide sets special conditions for commercial, professional and engineering consulting activities (for example presence in four countries and 10 years' experience for a 100% foreign engineering consultancy) but none specific to contracting, so a pure construction contractor's registration turns more on classification and sector approvals than on MISA conditions. If design work is in scope, check whether the engineering consultancy conditions apply.8
- From 1 January 2024 government agencies were barred from contracting with foreign companies that have no regional headquarters in the Kingdom, subject to exceptions, including works below SAR 1 million, work executed outside the Kingdom and a single acceptable offer.9
- News reports indicate the regional headquarters rule has since been revised, including a formal exemption framework; this could not be verified and must be confirmed with the contracting authority before deciding whether a regional headquarters is needed.10
Tax, withholding and the Korea-Saudi Arabia treaty
The Saudi Arabia-Korea treaty has been in force since 1 December 2008. A construction project creates a Saudi permanent establishment only after six months, but most real projects last longer, so plan for Saudi income tax at 20% on project profits, Saudi withholding on payments to Korea at treaty-reduced rates, and 15% VAT. Korea taxes the same profits and gives a credit for Saudi tax.
- Korean corporate tax is charged at 10% to 25% by band, with no change because profits arise abroad; Korea gives a credit for Saudi tax under Article 23 of the treaty. The treaty, signed on 24 March 2007 and in force since 1 December 2008, had a tax sparing rule limited to its first five years, which has expired.6511
- Korean transfer pricing rules require arm's length pricing for head-office charges, equipment rentals, guarantees and secondments to the Saudi entity, with master file, local file and country-by-country reports depending on group size.12
- Korean staff spending more than 183 days in a twelve-month period in Saudi Arabia, or paid through a Saudi permanent establishment, fall outside the treaty's short-stay exemption; Saudi Arabia has no personal income tax on employment income, so the practical effect is on Korean payroll tax and cost recharges.1314
- A construction, installation or assembly project lasting more than six months is a permanent establishment under the treaty, and services through personnel become one after more than 183 days in twelve months. Splitting a contract to stay under the limit is likely to be challenged.7
- Saudi income tax is 20% on the foreign-owned share of a Saudi company's profits and on a non-resident's permanent establishment profits.15
- Domestic withholding on payments to Korea is 5% on dividends and loan charges, 5% on technical and consulting services, 15% on royalties and 20% on management fees. The treaty caps dividends at 5% (25% direct holding) or 10%, interest at 5%, and royalties at 5% for equipment and 10% otherwise.161718192021
- Treaty rates are applied at source only after the Saudi payer files with ZATCA the Korean tax residency certificate and an authenticated or apostilled treaty form; otherwise the full domestic rate is withheld and a refund must be claimed.22
- VAT at 15% applies to supplies in Saudi Arabia, and related-party pricing with the Korean parent must be at arm's length with documentation submitted to ZATCA.2324
Classification, government tenders and contract protection
Public-sector construction work needs a contractor classification in the right field and grade before a bid can be accepted, and is tendered under the Government Tenders and Procurement Law through Etimad, with price preferences for local content. Korea and Saudi Arabia have a bilateral investment treaty in force and both apply the New York Convention, which matters for dispute clauses in the project contract.
- The Korea-Saudi Arabia bilateral investment treaty has been in force since 19 February 2003 and is the starting point for protection of the Korean company's investment in the Saudi project vehicle; its dispute settlement terms should be read before structuring.25
- Korea applies the New York Convention to awards made in other contracting states and to commercial relationships, so an award from an arbitration seated in Saudi Arabia or elsewhere can be enforced against Korean assets of a counterparty.26
- Government bodies may not accept a bid on a project subject to classification unless the contractor is classified in the relevant field, activity and grade. Classification is by the Ministry of Municipalities and Housing, and foreign-invested contractors are classified under the same procedures as Saudi contractors.2728
- Public procurement runs under the Government Tenders and Procurement Law through the Etimad portal.29
- National products not on the mandatory list receive a price preference that treats a competing foreign product's price as 10% higher, which affects how a Korean contractor prices imported materials and equipment.30
- Saudi Arabia applies the New York Convention to awards made in another contracting state, so the seat of arbitration chosen in the contract matters for enforcement.31
Site staff, work permits and Saudisation
Every non-Saudi worker on the project needs a work permit sponsored by a Saudi employer, and the employer bears recruitment, permit and residence costs. Saudisation targets under Nitaqat limit new visas for employers in lower bands. Korean staff remain in Korea's social insurance system unless rules say otherwise; no Korea-Saudi social security agreement was confirmed.
- Korea's four social insurance schemes (national pension, health insurance, employment insurance and industrial accident insurance) are mandatory for Korean employment; how they apply to staff posted to Saudi Arabia was not confirmed and should be checked with the Korean payroll adviser.32
- Under the treaty, salaries of Korean staff on site for more than 183 days in twelve months, or borne by a Saudi permanent establishment, can be taxed in Saudi Arabia, although Saudi Arabia has no personal income tax on employment income.1314
- A non-Saudi may not work without a work permit, which requires legal entry, skills the country needs and a contract with an employer; the vehicle that employs site staff must therefore be registered and set up on the labour platforms before mobilisation.33
- Employers must meet Saudisation standards; under Nitaqat, lower bands restrict new work visas and profession changes, and from May 2026 required rates rise with headcount and are assessed across branches doing the same activity.3435
- For non-Saudi employees the employer pays social insurance of 2% for occupational hazards only; Saudi employees carry much higher pension and other contributions, which affects the cost of meeting Saudisation targets.36
Bank accounts, currency and bringing profits home
Saudi Arabia does not restrict remittance of profits, capital or loan repayments beyond withholding tax, so the main costs of getting money back to Korea are Saudi withholding at treaty rates and the reporting the Korean foreign exchange bank requires.
- Capital sent to the Saudi entity and returns coming back run through the designated Korean foreign exchange bank, which handles the overseas direct investment report and later reports.1
- Dividends from a Saudi company held 25% or more directly bear Saudi tax of at most 5% under the treaty, and Korea credits that tax against Korean corporate tax.195
- Saudi Arabia does not limit remittances of profits, debt service or capital other than through withholding tax, and there are no waiting periods for remitting investment returns.37
- Domestic withholding of 5% applies to dividends and loan charges paid to Korea unless the treaty procedure is used; parent loans carry at most 5% Saudi tax on interest under the treaty.1620
Bringing equipment and materials from Korea
Plant, equipment and materials shipped from Korea pay the GCC common external tariff of at least 5% plus 15% import VAT, because the Korea-GCC free trade agreement has not been confirmed as in force. Saudi Arabia and Korea have a mutual recognition arrangement for Authorised Economic Operators, which helps only if both the exporter and importer hold that status.
- Korea and the GCC concluded free trade negotiations in December 2023, but as last confirmed the agreement still needed legal review and formal signing; do not price contracts on preferential GCC duty rates until entry into force is confirmed.38
- Korean exporters holding AEO status can benefit from the Saudi-Korean mutual recognition agreement in Saudi customs procedures.39
- Most goods from outside the GCC pay the common external tariff of at least 5%, with higher rates on selected products.40
- Saudi Arabia has had an AEO mutual recognition agreement with South Korea since 2023; AEO benefits include customs priority and deferred payment of customs charges for approved operators.39
Structures to consider
These are the structures businesses commonly weigh, not a recommendation. The right one depends on the facts listed under "What we need from you".
What has to happen first
- Both sidesMap the project: client (government or private), contract value, expected duration on site, design scope and the equipment and staff that will come from Korea.
- Saudi ArabiaConfirm with the contracting authority whether the regional headquarters rule, as currently in force, applies to this contract and whether an exception covers it.After step 1
- Both sidesDecide the vehicle: temporary registration for the awarded contract, a Saudi company, or a Saudi company with a regional headquarters.After step 1, 2
- South KoreaBoard approval in Korea and the overseas direct investment report through the designated foreign exchange bank before any capital is remitted.After step 3
- Both sidesHave the Korean commercial registration and latest financial statements authenticated for the Saudi Embassy, and register with MISA (regular or temporary registration).After step 3
- Saudi ArabiaIncorporate the Saudi company where one is used, and open its labour, ZATCA and social insurance files.After step 5
- Saudi ArabiaApply for contractor classification in the right field, activity and grade before bidding or signing.After step 5, 6
- Both sidesOpen the Saudi bank account and remit capital from Korea through the designated foreign exchange bank.After step 4, 6
- Both sidesSet intercompany agreements (subcontracts, equipment rental, head-office services, guarantees, secondments) priced at arm's length under both countries' rules, and file the ZATCA treaty forms so treaty withholding rates apply at source.After step 6, 8
- Both sidesPlan workforce: Saudisation band, work permits and residence for Korean and third-country staff, and the Korean payroll and social insurance position for posted staff.After step 6
- Both sidesRegister for VAT and customs, and plan imports of plant and materials under the GCC tariff, checking whether the Korea-GCC agreement has entered into force and whether AEO status helps.After step 6
- Both sidesMobilise and track days on site from the start, since the six-month construction and 183-day services and employment thresholds drive permanent establishment and payroll tax outcomes.After step 7, 9, 10, 11
- Both sidesOngoing: Saudi tax return within 120 days of year end, monthly withholding filings, Nitaqat monitoring, Korean post-investment reports and claims for Saudi tax credit in the Korean return.After step 12
What we need from you before anyone can advise
- Who the client is (ministry, government company, giga-project developer or private developer) and whether the contract has already been awarded.
- Expected time on site for the whole project and for each phase, and whether any related contracts could be aggregated.
- Whether the scope includes design or engineering consultancy as well as construction.
- Contract value and whether any regional headquarters exception applies.
- How many Korean, Saudi and third-country staff will work on site, and for how long each.
- Which plant and equipment will be shipped from Korea, rented from the group, or bought locally.
- Group consolidated revenue (Korean transfer pricing documentation and global minimum tax).
- Planned financing of the Saudi entity: equity, parent loans, guarantees or bank facilities.
What this guide does not yet confirm
These points need checking with a qualified local professional before you rely on them.
- The current form of the regional headquarters rule for government contracting could not be verified: news reports of a reversal or exemption framework could not yet be checked, and the existing record relies on a January 2023 law-firm briefing.
- The Korean Overseas Construction Promotion Act requirements (reporting of overseas construction business and contract wins to the ministry or the International Contractors Association of Korea) could not be confirmed;.
- Korean overseas direct investment rules rely on a secondary source; the Foreign Exchange Transactions Act and its regulations, including thresholds and treatment of overseas branches, could not yet be checked on an official site.
- Whether Korea and Saudi Arabia have a social security agreement was not confirmed; the Korean government and adviser pages listing agreements could not yet be checked.
- The entry-into-force status of the Korea-GCC free trade agreement at October 2026 was not confirmed on an official Korean or GCC page.
- The Contractor Classification Law Implementing Regulations (certificate term, grades, evidence of foreign experience) and 2025 amendments could not yet be checked.
- Korean domestic foreign tax credit limits, Korean taxation and social insurance of employees posted abroad, and any Korean tax exemption for overseas construction site pay were not confirmed.
- Saudi customs treatment of temporarily imported construction plant (temporary admission) and any project-level customs exemptions were not confirmed.
- The dispute settlement provisions of the Korea-Saudi bilateral investment treaty could not yet be checked.
Brief for your advisers
Questions to put to your advisers in each country. Copy them, or download them as a text file to send with your requirement.
- Saudi procurement adviser: does the current regional headquarters rule apply to this client and contract, and which exception or exemption route is available?
- Saudi corporate adviser: temporary registration or a Saudi company for this project, and what registrations and approvals does each need before mobilisation?
- Classification adviser: which field, activity and grade do we need, what evidence of experience from Korea counts, and how long will classification take?
- Tax advisers on both sides: when will our Saudi permanent establishment start under Article 5(3), how will profits be attributed to it, and how will Korea credit the Saudi tax?
- Saudi tax adviser: which of our payments to Korea (equipment rental, design fees, head-office services, interest) fall under which withholding rate, and how do we apply treaty rates at source?
- Transfer pricing advisers: what pricing and documentation will satisfy both ZATCA and the Korean tax authority for our intercompany arrangements?
- Employment advisers: what Nitaqat band will we fall into, what are our Saudisation obligations, and how are Korean posted staff treated for Korean social insurance and payroll tax?
- Korean foreign exchange bank: what must we file before remitting capital, and how are a Saudi branch and a Saudi subsidiary each reported?
- Customs adviser: what duty and VAT will our equipment and materials attract, has the Korea-GCC agreement entered into force, and is temporary admission or an exemption available?
- Disputes counsel: what seat and rules should the contract use given the New York Convention and the Korea-Saudi bilateral investment treaty?
Who can help, on each side
South Korea
- Setting up and running a company · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Licences, permits and regulators · Arranged by WONE Global on request
- Tax and structuring · Arranged by WONE Global on request
- Accounting and annual filings · Arranged by WONE Global on request
- Contracts and commercial law · Arranged by WONE Global on request
- Disputes and arbitration · Arranged by WONE Global on request
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
Saudi Arabia
- Setting up and running a company · Arranged by WONE Global on request
- Payments and currency · Arranged by WONE Global on request
- Licences, permits and regulators · Arranged by WONE Global on request
- Tax and structuring · Led by Abdullah Yousef Alhussaini
- Accounting and annual filings · Led by Abdullah Yousef Alhussaini
- Contracts and commercial law · Led by Abdulrahim bin Saleh Al-Zahrani
- Disputes and arbitration · Led by Abdulrahim bin Saleh Al-Zahrani
- Employment, payroll and immigration · Arranged by WONE Global on request
- Banking and capital · Arranged by WONE Global on request
- Treasury and funding · Arranged by WONE Global on request
- Customs, trade and export controls · Arranged by WONE Global on request
Sources and review status
Each statement is numbered to the source it was checked against. We use official sources where we can, and each statement says whether it was checked against an official or a secondary source. Sources last checked on 19 October 2026. None of it has been professionally reviewed yet: it is research checked against official and secondary sources by WONE Global, not legal or tax advice.
A Korean company making an overseas direct investment files an overseas direct investment report under the Foreign Exchange Transactions Act through its designated foreign exchange bank, which processes the report when the investment is remitted, followed by post-investment and periodic reporting. Controlling or substantial stakes in a foreign company. Thresholds, deadlines and the treatment of branches are set in the Act's subordinate regulations and were not confirmed. A late or missing report can itself be a violation.
Secondary source published 31 August 2026; the Foreign Exchange Transactions Act and the Foreign Exchange Transaction Regulations could not yet be checked on an official Korean site.
A foreign investor must register with the Ministry of Investment before engaging in any investment in Saudi Arabia. Applies to foreign investors generally; investments in securities governed by the Capital Market Law are outside this requirement.
For regular investment registration, a foreign company must provide a copy of its commercial registration certified by the Saudi Embassy and its financial statements for the last fiscal year authenticated by the Saudi Embassy, plus any activity-specific requirements. Regular registration of foreign legal persons; holders of a Special Residency Permit are exempt from these document requirements.
MISA's temporary investment registration is for foreign companies that have obtained a government contract, requires a letter from the government authority or the project contract covering the contract period, and ends at the end of the contract. The fee for the full registration period must be paid within 30 days of notification or the registration is void; annual updates also apply.
Under Article 23 of the Saudi Arabia-Korea treaty, Korea allows Saudi tax payable as a credit against Korean tax on the same income, and Saudi Arabia allows Korean tax paid as a deduction from Saudi tax. Article 23(2) also contained a tax sparing rule for exempted or reduced Saudi business profits tax, limited to the first five years for which the treaty was effective, so it no longer applies. The protocol states that these methods do not prejudice the zakat regime for Saudi nationals.
The Korean domestic foreign tax credit limits that apply alongside the treaty were not confirmed.
Corporate income tax is charged at 10 percent on the first KRW 200 million of taxable income, 20 percent up to KRW 20 billion, 22 percent up to KRW 300 billion and 25 percent above that. Fiscal years starting on or after 1 January 2026; excludes local income tax.
Secondary source (PwC, last reviewed 4 June 2026); National Tax Service pages were not fetched. Same bands stated in Chambers Doing Business In 2026.
Under Article 5(3) of the Saudi Arabia-Korea treaty, a building site or construction, installation or assembly project is a permanent establishment only if it lasts more than six months, and furnishing services through employees or other personnel creates one where the activities continue for periods aggregating more than 183 days within any twelve-month period. Applies to a Korean contractor working on a Saudi project without a Saudi entity. Whether related projects are aggregated, and how supervisory activities are treated, should be checked against the full article.
The Ministry of Investment's investor guide sets special registration conditions for commercial, communications, professional, engineering consulting, legal and recruitment activities, but lists no special conditions for contracting or construction activity. Registration with the Ministry of Investment. Contracting still needs sector classification (see the Contractor Classification Law) and any activity licences. A 100% foreign-owned engineering consultancy must have a presence in at least four countries and at least 10 years of experience.
Absence of a contracting-specific condition in the guide does not rule out conditions set by other authorities.
Under regulations approved by the Council of Ministers on 27 December 2022, Saudi government agencies may not contract with foreign companies that have no regional headquarters in Saudi Arabia, or with their related parties, from 1 January 2024. Applies to all government agencies, not only those under the Government Tenders and Procurement Law. Does not apply to works or procurements estimated below SAR 1 million or executed outside the Kingdom. Exceptions include a single technically acceptable offer, a best technical offer priced at least 25% below the next, emergencies, and work only non-RHQ companies can perform; the agency must report its reasons to the General Auditing Bureau and the Expenditure and Project Efficiency Authority within 30 business days of signing.
Secondary source (law-firm briefing, January 2023). No official Saudi page stating the contracting rule was found; the Ministry of Investment investor guide (2026) describes the RHQ licence but not the contracting restriction. Thresholds and exceptions may have been revised since.
News reports indicate that Saudi Arabia has since revised the rule barring government agencies from contracting with foreign companies that have no regional headquarters in the Kingdom, including through a formal exemption framework. Government contracting by foreign companies without a Saudi regional headquarters. The date, legal instrument and conditions of the change were not confirmed.
Supported only by search result titles: this Gulf News article and a Middle East Briefing article titled 'Saudi Arabia Refines RHQ Procurement Rule with Formal Exemption Framework'. Neither page could be read, so the content of the change is unverified and must be confirmed with the Ministry of Finance or the contracting authority before relying on it.
The Saudi Arabia-Korea income tax convention was signed on 24 March 2007 and entered into force on 1 December 2008. Comprehensive income tax treaty between Saudi Arabia and the Republic of Korea; the English text prevails if the Arabic and Korean texts diverge.
Signature at Riyadh on 24 March 2007 is confirmed in the treaty text; a secondary source states the treaty became effective from 1 January 2009.
The arm's-length principle applies to cross-border related-party transactions under the International Tax Coordination Law, with master file, local file and country-by-country reporting depending on group size.
Law-firm practice guide, last updated 16 July 2026; official Korean pages (Korean Law Information Center, ministries) were not fetched run. Thresholds not stated.
Under Article 15(2) of the Saudi Arabia-Korea treaty, salary for work in the other state stays taxable only in the home state where the employee is present there for no more than 183 days in any twelve-month period, the employer is not resident there and the pay is not borne by a permanent establishment or fixed base there. Korean employees working on a Saudi project.
There is no personal income tax on employment income in Saudi Arabia. Individuals' employment earnings; social insurance contributions still apply.
Secondary source.
Income tax is charged at the standard rate of 20% on taxable income that does not qualify for a special regime. Non-Saudi shareholdings in resident capital companies and non-residents with a permanent establishment; oil and hydrocarbon production is taxed under separate rates.
Stated by ZATCA in the RHQ guideline as the standard rate for non-qualifying income. PwC Worldwide Tax Summaries also states a 20% rate on net adjusted profits.
Withholding tax of 5% applies to dividends and to loan charges paid to non-residents. Kingdom-source payments to non-residents; treaty rates may reduce the rate.
Withholding tax of 15% applies to royalties and 20% to management fees paid to non-residents. Kingdom-source payments to non-residents; treaty rates may reduce royalty rates.
Withholding tax of 5% applies to technical and consulting services, rent and international telecommunications, while other payments to non-residents not specifically listed are taxed at 15%. Kingdom-source payments to non-residents.
Under Article 10(2) of the Saudi Arabia-Korea treaty, source-state tax on dividends is capped at 5% where the beneficial owner is a company holding directly at least 25% of the paying company's capital, and at 10% in all other cases. Dividends paid by a Saudi company to a Korean resident beneficial owner. The Saudi domestic rate on dividends to non-residents is 5%.
Under Article 11 of the Saudi Arabia-Korea treaty, source-state tax on interest is capped at 5% of the gross amount, and interest paid to the other state's government, local authorities, central bank or certain governmental financial institutions is exempt. Interest arising in one state and beneficially owned by a resident of the other.
The list of governmental financial institutions covered by the exemption was not confirmed.
Under Article 12(2) of the Saudi Arabia-Korea treaty, source-state tax on royalties is capped at 5% of the gross amount for the use of, or right to use, industrial, commercial or scientific equipment and at 10% in all other cases. Royalties beneficially owned by a resident of the other state, including equipment rental where it falls within the royalty definition. The Saudi domestic withholding rate on royalties is 15%.
To apply treaty withholding rates at source, the payer applies to ZATCA through its e-services portal with the non-resident's tax residency certificate, ZATCA's treaty form authenticated by the Saudi embassy or apostilled, and an undertaking to settle any resulting tax; otherwise the domestic rate is withheld and a refund claimed. Payments to residents of countries with a double taxation agreement with Saudi Arabia; treaty claims are subject to a five-year limitation period.
The standard VAT rate is 15%. Taxable supplies in Saudi Arabia; zero-rating applies to certain exports, including services to non-resident customers.
The 1 July 2020 effective date of the increase from 5% to 15% comes from PwC Worldwide Tax Summaries (Corporate - Other taxes).
Related-party transactions must follow the arm's length principle, with supporting documentation submitted to ZATCA. Taxpayers with related-party transactions; documentation thresholds were not confirmed.
Stated in the RHQ guideline. Article 10(11) of the Income Tax Implementing Regulations also disallows related-party charges above independent-party prices.
The Korea-Saudi Arabia bilateral investment treaty was signed on 4 April 2002 and has been in force since 19 February 2003. Protects investments of each state's investors in the other. Its dispute settlement options could not yet be checked.
UNCTAD database entry; the treaty text could not yet be checked.
Korea acceded to the New York Convention on 8 February 1973, effective 9 May 1973, applying it only to awards made in another contracting state and to commercial legal relationships.
Under Article 3 of the Contractor Classification Law, government agencies, public institutions and other bodies with public legal personality may not accept a bid for a project subject to classification unless the contractor is classified in the relevant field, activity and grade. Projects subject to classification; fields and activities are set by ministerial decision and the law text does not state a value threshold. The certificate term is set in the Implementing Regulations.
The English translation is for guidance; the Arabic text governs. Amendments to the Implementing Regulations reported in 2025 could not yet be checked.
Under Article 11 of the Contractor Classification Law, a contractor licensed as a foreign investor is classified under the same procedures that apply to Saudi contractors, and the Council of Ministers may grant exemptions under controls it sets. Foreign-invested contractors. The article still refers to licensing under the former Foreign Investment Law, which has been replaced by the Investment Law's registration system.
Government procurement is governed by the Government Tenders and Procurement Law, applies to procurement by government entities including procurement executed outside the Kingdom, and runs through the Etimad electronic portal. The Ministry of Finance sets procurement policy and maintains a boycott list.
Secondary (foreign government) source; the official Saudi text could not yet be checked run.
In Saudi government contracts, national products not on the mandatory list receive a price preference applied by treating the price of a competing foreign product as 10% higher than its bid price. Regulations on Preference for Local Content and Local SMEs and Companies Listed on the Capital Market in Business and Procurement Transactions, Article 10. Local SMEs receive a separate 10% price preference except in supply contracts and high-value contracts (Article 4(2)); for designated high-value contracts other than supply, price carries 60% of the financial evaluation and local content commitments and capital-market listing the remaining 40% (Article 17).
The date of the version read was not confirmed; the Local Content and Government Procurement Authority (LCGPA) administers the local content portal.
Saudi Arabia acceded to the New York Convention on 19 April 1994, with entry into force on 18 July 1994, and applies it only to awards made in the territory of another contracting state. Saudi Arabia has made no commercial-relationship declaration under the Convention.
Four social insurance schemes are mandatory: national pension, national health insurance, employment insurance and industrial accident compensation insurance, the last paid by the employer alone. Contribution rates not stated in the source.
Law-firm practice guide, last updated 16 July 2026; official Korean pages (Korean Law Information Center, ministries) were not fetched run.
A non-Saudi may not work in Saudi Arabia without a work permit, which requires legal entry and authorisation to work, skills the country needs, and a contract with an employer. All non-Saudi workers under the Labor Law.
Saudi employers must comply with the standards for nationalising jobs (Saudisation) set by the Ministry of Human Resources and Social Development. Private-sector employers under the Labor Law. Article 32 also requires Ministry approval before recruiting for employment. The Nitaqat bands and percentages are set outside the Law and were not confirmed.
Under the Nitaqat programme, administered by the Ministry of Human Resources and Social Development, employers are placed in bands (Red, Low Green, Medium Green, High Green and Platinum) according to their Saudisation rate, and lower bands restrict new work visas and profession changes. Private-sector employers in Saudi Arabia. A procedural guide issued in May 2026 assesses Saudisation across all branches carrying out the same activity and replaces fixed percentage brackets with a formula under which required rates rise with headcount; thresholds vary by sector and are set for 2026 to 2028.
Secondary source; the MHRSD procedural guide itself could not yet be checked. Sector-specific percentages were not confirmed.
Social insurance contributions for Saudi employees total 21.5% of salary (9.75% employee, 11.75% employer), while for non-Saudi employees the employer pays 2% for occupational hazards only, on salary capped at SAR 45,000 a month. Contribution base is basic salary plus housing allowance; rates as reported for employees covered before the new Social Insurance Law.
Secondary source. The GOSI website did not render content when opened. The new Social Insurance Law (understood to apply to new Saudi entrants from 3 July 2024 with phased pension contribution increases) is not reflected on the PwC page and was not confirmed on an official page.
Saudi Arabia does not limit remittances of profits, debt service, capital, capital gains, returns on intellectual property or payments for imported inputs, other than certain withholding taxes, and there are no waiting periods for remitting investment returns through normal legal channels.
Secondary (foreign government) source; consistent with Article 4 of the Investment Law (claim sa-banking-001).
Korea and the Gulf Cooperation Council concluded negotiations on a free trade agreement in December 2023, and as reported in February 2025 the agreement still needed legal review and formal signing before it could take effect. Korea-GCC free trade agreement. Whether it has since been signed, ratified or brought into force was not confirmed; until it is in force, Korean goods pay the GCC common external tariff.
Secondary news source; an August 2024 report said Korea aimed to implement the agreement by the end of 2024. No official Korean or GCC page confirming entry into force was found.
Saudi Arabia has AEO mutual recognition agreements with South Korea (2023), Egypt (2024), Morocco (2025) and Hong Kong (2025). Benefits under mutual recognition apply to approved AEOs.
Saudi Arabia applies the GCC common external tariff of at least 5% to most goods imported from outside the GCC. Goods of non-GCC origin; higher rates apply to selected products and some goods are duty-free.
Secondary (foreign government) source, last published 11 May 2026; ZATCA's tariff and customs law pages could not yet be checked (content loads dynamically).
