Title: Business Licenses in Saudi Arabia
1Top 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.
2Saudi 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
- 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. - 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.
4The 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
51. 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
62. 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
925 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
108. 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
119. 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.
12Taking 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!