Purpose: This study aims to explore the challenges faced by foreign banks in the Kingdom of Saudi Arabia (KSA). It is important to explore the challenges as extant literature provides limited guidelines about this issue. Design/methodology/approach: A mixed-method approach was used by canvassing 71 questionnaires and 36 semi-structured interviews. The sample included senior managers of foreign bank branches working in the Saudi market by the end of 2019. The quantitative data were analyzed using the distribution fitting algorithmic approach, and it is supported by the qualitative data analyzed using the thematic analysis method. Findings: Results indicate that foreign banks encounter various challenges including government policies and regulations, the Saudi legal system, high “Saudization” ratio of the workforce, technological advances, high competition and overall economic change (oil price change). It seems that these challenges represent the KSA’s specific business environment. Originality/value: This study will advance the extant literature on foreign bank entry with evidence from a unique context. This study could also help regulators, policymakers and bankers to better understand foreign banks’ entry into emerging and developing markets.