Forms of JV Entities

The joint venture (JV) landscape in Saudi Arabia has evolved significantly in 2025, driven by the Kingdom’s Vision 2030 and the implementation of the new Companies Law, which came into force in January 2023. JVs have long been used as a way to do business in Saudi Arabia; however, the relaxation of foreign ownership requirements in Saudi Arabia over the past ten years means that recent and new JVs are increasingly focused on and critical to the Kingdom’s economic diversification strategy, enabling both domestic and international investors to collaborate across high-impact sectors such as construction, infrastructure, logistics, energy, technology and manufacturing.

These partnerships are increasingly structured to align with national development goals, combining local market knowledge and skills with global expertise to accelerate innovation, job creation, and know-how and technology transfer to the Saudi market. Government-owned companies, including affiliates of Aramco and the Public Investment Fund, are playing an ever-increasing role.

The developments under the new Companies Law (together with the introduction of the Civil Transactions Law) offer investors greater flexibility and legal certainty, together with the ability to implement structures that allow international investors to meet corporate governance expectations.

The authors’ accompanying Law and Practice chapter sets out further details regarding the most common legal forms used for incorporated JVs – namely:

• the limited liability company;
• the closed joint stock company; and
• the simplified joint stock company.

The Saudi Business Center (SBC), which has undergone considerable development since 2023, has become a central pillar in the Kingdom’s strategy to streamline and modernise its business environment, particularly in the wake of the new Companies Law and the broader Vision 2030 reforms. The SBC is a unified government platform and serves as a one-stop gateway for investors (both local and foreign) and companies seeking to establish and grow their businesses in Saudi Arabia. The SBC consolidates regulatory procedures across multiple agencies, reducing bureaucracy and improving efficiency. It supports most legal entity types (including all of those typically used for JVs) and facilitates the legal structuring of JVs in line with the new Companies Law.

The recent regulatory and legal reforms have made the Kingdom more attractive to foreign investors by lowering entry barriers and offering greater flexibility and certainty in structuring JVs. The net result of these reforms is that JVs are now seen as offering a strategic platform for long-term growth, innovation and regional expansion, and not just as vehicles for market entry.

This shift reflects a broader trend towards formalisation, transparency and investor protection, aligning with Saudi Arabia’s ambition to become a regional hub for innovation and investment.

Vision 2030 – Key Sectors for JVs

Vision 2030 has identified several strategic sectors where JVs with international partners are essential to achieving the Kingdom’s economic diversification and development goals. These sectors include:

• energy and petrochemicals, where the focus is on advancing cleaner technologies, renewable and sustainable energy, and downstream integration and technology; and
• the digital economy, which aims to position the Kingdom as a regional leader in innovation, artificial intelligence, smart infrastructure and logistics.

These sectors are deemed critical to supporting mega-projects and enhancing connectivity across the Middle East.

Additionally, defence and advanced manufacturing are targeted for localisation and capability building. The tourism and entertainment sectors are also key areas for JVs, as Saudi Arabia seeks to become a global destination for culture, leisure and heritage. These sectors offer significant opportunities for foreign investors to enter the Saudi market through JVs that contribute to long-term growth, knowledge transfer, and alignment with Vision 2030 objectives.

The strategic sectors prioritised under Saudi Arabia’s Vision 2030 are having a significant impact on the Kingdom’s economy, driving diversification, job creation and foreign investment. By focusing on industries such as energy, technology, infrastructure, logistics, defence, tourism and entertainment, the Kingdom is reducing its historical reliance on oil and building a more resilient and diversified economy.

Infrastructure Projects

JVs have become a defining feature of Saudi Arabia’s infrastructure boom, acting as a strategic mechanism to deliver the Kingdom’s giga-projects. The infrastructure sector is thriving, with a pipeline of projects valued at over USD1.8 trillion, and the Kingdom is investing heavily in transportation, housing, energy and smart city technologies. Key initiatives include the Red Sea Project, Qiddiya and a nationwide rail network expansion, including the recently inaugurated Riyadh Metro, which was the product of a number of major global consortia combining local and international expertise.

Antitrust Trends

In recent years, merger control has emerged as a critical consideration in the formation of JVs in the Kingdom. Under the Economic Concentration Review Guidelines (ECRG) published by the General Authority for Competition (GAC) in April 2025, JV companies may only be incorporated after the GAC issues a clearance decision. This applies when the proposed JV is deemed fully functioning – meaning it operates as an autonomous economic entity on a lasting basis – and when the parties involved meet the following cumulative revenue thresholds:

• combined annual worldwide turnover of the JV partners (group level) exceeds SAR200 million (approximately USD53.3 million/EUR50.3 million);
• at least two of the JV partners (group level) each has a global turnover exceeding SAR40 million (approximately USD10.7 million/EUR10.1 million); and
• combined annual turnover in Saudi Arabia of the JV partners exceeds SAR40 million.

JVs accounted for approximately 13% of economic concentration applications reviewed by the GAC in 2023, increasing slightly to 15% in 2024.

One of the most notable changes in the ECRG is the introduction of exemptions for certain JVs that no longer require notification to the GAC. Specifically, JVs established in the Kingdom with foreign partners are exempt if:

• they involve the manufacture of a new product, or a product that can only be distributed in a limited part of Saudi Arabia due to its nature; and
• the parties involved are not current or potential competitors in the relevant product market.

These exemptions are designed to encourage innovation and foreign investment while maintaining competitive safeguards.