Business Licenses in Saudi Arabia - PowerPoint PPT Presentation

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Business Licenses in Saudi Arabia

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Explore the various types of business licenses in Saudi Arabia, crucial for establishing legal operations in the kingdom. Learn about the specific categories and regulatory frameworks governing industries from construction to retail, ensuring compliance with local laws. Discover how these licenses facilitate business growth and regulatory adherence in Saudi Arabia's dynamic economic landscape. – PowerPoint PPT presentation

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Date added: 6 July 2024
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Title: Business Licenses in Saudi Arabia


1
Top 9 Types of Business Licenses in Saudi Arabia
The Ministry of Investment in Saudi Arabia issued
a record 3,157 business licenses in Q1 2024, a 9
increase from the previous quarter and a
significant jump from 351 licenses issued in Q1
2020. This surge reflects the governments focus
on economic diversification, with construction
(864 licenses) and manufacturing (620 licenses)
leading the way. Interestingly, the financial
sector also saw 21 licenses issued, with big
names such as the Rothschild Co. opening an
office in Riyadh. Moreover, the government is
mandating regional HQs for foreign companies
seeking contracts over 270,000.
2
Saudi Arabias businesses are experiencing a
surge in licensing activity, fueled by several
key factors. These factors directly connect to
the nations ambitious economic transformation
plans, lets look at some of them
The Factors Contributing Towards Nations
Ambitious Growth Business Licensing In Saudi
Arabia
  1. Vision 2030 Momentum A recent government report
    underscores the success of Vision 2030, with 87
    of its projects deemed on the right track. This
    positive progress signifies a thriving effort to
    diversify the economy beyond its traditional
    reliance on oil. This diversification, in turn,
    creates a growing demand for new businesses to
    support various sectors.
  2. Strategic Restructuring of Mega-Projects While
    the Council of Economic and Development Affairs,
    led by the Crown Prince, convened to discuss
    potential adjustments to mega-projects due to
    budgetary pressures and rising interest rates,
    significant investment remains active.

3
  • This process may involve scaling back or
    reorganizing some projects but also presents new
    opportunities. New businesses can fill gaps
    created by these adjustments or contribute to
    revised plans.
  • PIF Secures Funding The Public Investment Fund
    (PIF), the entity responsible for mega-projects,
    continues to secure funding. Recent successes
    include a 5.5 billion green bond issuance and
    plans for a 3.5 billion sukuk issue later this
    year. This continued access to capital ensures
    ongoing investment and fosters new business
    opportunities.
  • Adapting to Market Dynamics A prime example of
    this adaptability is the recent announcement by
    Neom, a futuristic city project. Their initial
    vision for a 170 km horizontal city, The Line,
    has been revised to a more manageable 5 km length
    by 2030. This change highlights the focus on
    achieving progress even with modifications.

4
The Saudi economy is undergoing a dynamic
transition towards diversification, as evidenced
by the rising number of business licenses. This
shift is driven by the positive momentum of
Vision 2030, ongoing investment in
mega-projects even with restructuring, and
PIFs continued access to capital. These factors
combine to create a fertile ground for new
businesses to flourish. Are You Ready to Join the
Growth? Here Are the Top 9 Business Licenses in
Saudi Arabia If you are interested in being a
part of this exciting economic expansion, Saudi
Arabia offers a variety of business license
options to suit your entrepreneurial aspirations.
Here are nine distinct business licenses to
consider for starting your venture
5
1. Service License Catering to a wide range of
service-based businesses, this license allows
foreign companies to operate in sectors like
restaurants, marketing, IT solutions, and general
consultancy. Notably, foreign ownership of 100
is permitted. Requirements Established business
outside Saudi Arabia for over a year (not a sole
proprietorship) Minimum capital of SAR 25,000
6
2. Entrepreneurial License Ideal for launching
your innovative startup, this license streamlines
regulations, reduces fees, and provides access to
government support programs. However, specific
criteria like a patented idea, venture capital
backing, or endorsement letters are
necessary. Requirements Patented idea, VC
backing, or support letter from a government
entity (MISA, PIF, CODE, KAUST, TDF) Endorsement
letter MISA pre-approval
7
  • Industrial License
  • This license empowers foreign companies to
    establish manufacturing facilities within the
    kingdom, with full ownership permitted.
  • Requirements
  • Established business outside Saudi Arabia for
    over a year (not a sole proprietorship)
  • Minimum capital of SAR 25,000
  • Agricultural License
  • Designed for foreign companies venturing into
    agricultural activities like farming and
    livestock production, this license allows for
    100 foreign ownership.
  • Requirements
  • Established business outside Saudi Arabia for
    over a year (not a sole proprietorship)
  • Minimum capital of SAR 25,000

8
  • Real Estate License
  • For foreign real estate development companies
    with projects exceeding SAR 30 million (excluding
    Mecca and Medina), this license is required.
    Contacting MISA directly for detailed
    requirements is recommended.
  • Trading License (Commercial License)
  • This license facilitates import and export
    activities for foreign companies, with full
    ownership permitted. However, two options exist
    depending on your investment strategy
  • 100 Foreign Ownership
  • Requires three branches in different countries
    outside Saudi Arabia SAR 30 million capital
    injection in the first year
  • SAR 170 million capital investment within the
    next five years in the Saudi company

9
25 Saudi Partner No branch requirement SAR
26,666,666 capital injection in the first year
(minimum foreign capital share of SAR 20
million) No five-year investment obligation 7.
Mining License This license allows foreign
companies to engage in mining activities within
Saudi Arabia, with 100 ownership
permitted. Requirements Established business
outside Saudi Arabia for over a year (not a sole
proprietorship) Minimum capital of SAR 25,000
10
8. Professional License Foreign professionals
seeking to practice in areas like law, taxation,
consultancy, engineering, architecture, and
advisory services can leverage this license.
Interestingly, 100 ownership of a professional
company is possible. Requirements MISA
Professional License (for specific consulting
activities) requires a minimum of 25 local
partner with relevant experience. Alternatively
(Engineering Firms only) Four branches
globally Share capital of one branch must be at
least SAR 10 million A minimum of seven years of
experience
11
9. Special Consideration for GCC
Nationals Enjoying the same benefits as Saudi
citizens, GCC nationals can establish a business
with 100 ownership and a minimum capital of SAR
50,000. By carefully considering your business
goals and aligning them with the appropriate
license, you can unlock the exciting
opportunities presented by the evolving Saudi
Arabian market. Remember, conducting further
research and consulting with relevant authorities
can ensure a smooth application process and a
successful business venture in the kingdom.
12
Taking the Next Step
  • For in-depth information on these licenses and
    the application process, consider consulting with
    Safari Star one of the leading company
    formation consultants in the region. With careful
    research and planning, our experts help you
    leverage the current economic climate in Saudi
    Arabia to establish and grow your business to the
    fullest.
  • For more information or to book a free
    consultation with an expert, contact us today!
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