Obtain a Transportation License in Saudi Arabia
With the rapidly growing economy and sprawling infrastructure, the Kingdom of Saudi Arabia (KSA) is witnessing a high demand for transportation services. Whether it is a logistics company, a taxi, or a private bus service, the common issue of all is obtaining a transport license. This blog will help you understand how to get a transport license in Saudi Arabia, the requirements, procedures, and key considerations to keep in mind.
Transport Licenses Available in Saudi Arabia
The first step in obtaining a transport license in Saudi Arabia includes determining the business activity that best fits your business needs. Saudi Arabia has various licenses issued, depending on the type or nature of transportation service.
It is important to understand which license is going to be required by your business, as each has different requirements and regulatory procedures. In case of confusion, it is always a good idea to get help from company formation firms like Gatestone Group to smoothen its licensing process and ensure everything is legally complete.
Below are the transport licenses available for issuance in Saudi Arabia with the basic requirements:
1. Logistics Service Activity
Basic Requirements
- The applicant must have a commercial registration including logistics services activity.
- Obtaining a restricted license for the activity.
- Obtaining the municipality permit for the activity (logistics).
2. School Transport Activity
Types of vehicles for this business activity
a. Cars:
- Seat capacity: 7-9 seats
- Age limit: Maximum 5 years old
b. Minibuses:
- Seat capacity: Maximum 15 seats
- Age limit: Maximum 10 years old
c. Buses:
- Seat capacity: More than 15 seats
- Age limit: Maximum 10 years old
Basic Requirements
There are numerous requirements for this activity, some of the basic requirements include but are not limited to:
- The enterprise must have a commercial registration including the transport activity.
- The enterprise must have appropriate headquarters (with the exception of educational enterprises and entities that practice the activity themselves, whenever there are sufficient parking spaces to accommodate the vehicles).
- A minimum of 5 buses must be provided.
- The national address must be provided.
3. Carriage of Goods by Road Using Light Vehicles
- The regulations apply to carriage of goods by road with light vehicles with a total weight of no. more than 3,500 kg.
- The regulations don’t apply to:
- Fare-free personal light carriage
- Transport of devices, equipment, medical, and food products
- Transport of relief goods in cases of emergency and natural disasters
- Transport of goods by light transport vehicles owned by military forces and government agencies
Basic Requirements
- The enterprise has a commercial registration, including the transport activity.
- The enterprise has a place for running this business in the city of license according to the technical specifications and the requirements issued by the relevant competent authorities.
- A national address must be provided.
- A minimum of 10 vehicles must be provided, and the operational life of each vehicle must not exceed ten (10) years from the date of manufacture.
4. Specialised Transport Activity, Rental and Directing of Buses
Types of licenses
- Specialised Transport License
- Bus Directing License
- Bus Rental License
Basic Requirements For Specialised Transport Activity
- The enterprise has a place for running this business in the city of license according to the technical specifications and the requirements issued by the relevant competent authorities.
- The enterprise must have the minimum number of buses necessary to practice the activity.
- A national address for the enterprise must be provided.
- Third party liability insurance must be procured for all single-unit trucks and/or doubles.
- All single-unit trucks and/or doubles must be subject to periodic technical inspection.
Basic Requirements For Bus Rental Activity
- The enterprise has a place for running this business in the city of license according to the technical specifications and the requirements issued by the relevant competent authorities.
- The enterprise must have the minimum number of buses necessary to practice the activity.
Basic Requirements For Bus Directing Activity
- Trademark registration certificate for the app used in bus directing activity.
- A financial guarantee for the benefit of TGA in the amount of SAR 250,000 (two hundred and fifty thousand riyals). However, TGA’s President may be exempt from providing this guarantee to entrepreneurial businesses and business incubator enterprises for once.
- Providing a dispatching system for ordering and distributing the orders for bus directing services.
- Specifying the transportation services provided and the pricing method for each service.
- The enterprise must assign a representative or authorised person to communicate with TGA, and name him as the contact person
5. Car Rental & Rental Brokers
Types of Licenses
- Car Rental License
- Rental Broker License
Basic Requirements
- The operational life of the vehicle must not exceed (5) five years from the year of manufacture, when the vehicle enters service.
- Providing appropriate headquarters in accordance with traffic requirements and the approved municipal and technical requirements.
- Providing the minimum number of cars needed to run the activity, according to the license category, provided that the cars are owned directly by the enterprise or through a financial lease contract, and the enterprise is the actual user of the cars.
- The vehicle must be new and not previously registered in the Kingdom when it enters the service for the first time.
6. Truck Parking Activity
Basic Requirements
- Initial approval from TGA.
- Building completion certificate from the Ministry of Municipal and Rural Affairs.
- Permit from the General Directorate of Civil Defence.
- The Ministry of Transport’s approval.
- Title deed or duly certified lease contract, or proof that the landowner agrees to establish and operate truck parking for the term of the project.
7. Directing Goods Transport Vehicles
Basic Requirements
- The applicant must assign a representative or authorised person to communicate with TGA.
- The applicant must provide a financial guarantee in the name of TGA in the amount of SAR 250,000 (two hundred and fifty thousand riyals), excluding the entrepreneurial businesses and business incubator enterprises.
- The financial guarantee is collected after the first year of the license term.
Other transport activities in Saudi Arabia include vehicle transport and towing, taxi, taxi brokerage and taxi delivery activities, transporting goods, freight, brokers and leasing trucks on land roads and freight broker activity.
Eligibility Criteria for a Transport License in Saudi Arabia
To obtain a transport license in Saudi Arabia, it is essential to ensure that the eligibility criteria framed by the Saudi authorities is fulfilled. The basic criteria include but are not limited to:
- A foreign partner’s average revenue for the past 3 years must be ≥ SAR 3 billion. Assets must be ≥ SAR 1.5 billion.
- A foreign partner must be licensed in 2 countries.
- Minimum capital for bus supply, operation, and maintenance is SAR 500,000.
- Saudi shareholder must provide a Department of Transportation/Public Transportation Authority license.
Certifying that you meet these requirements in advance shall contribute to saving time in the licensing process.
Document Requirements for a Transport License in Saudi Arabia
Once the basic documents needed to be submitted to proceed with the application include the following:
- Company’s Board of Directors’ decision to invest in Saudi Arabia (with details of shareholders, capital, shares, activity, location, and GM appointment)
- Authenticated copy of the Commercial Register from the country of incorporation
- Proof of contract execution periods for the past five years
- Proof of financial capability aligned with project capital, shareholder shares, executive action plan, etc.
Keeping all the above-mentioned documents ready will make your application processing time efficient and will not lead to a delay.
Compliance and Renewal Considerations for a Transport License in Saudi Arabia
Obtaining a transportation license is only the beginning. To officially operate a company in Saudi Arabia, one must adhere to the local regulations and compliance and renewal requirements. Some of the considerations include:
- Regular vehicle checks: All vehicles are to be certified roadworthy and meet safety standards.
- Driver qualifications: Ensure all drivers are appropriately certified, licensed, and trained where necessary.
- Reporting requirements: Periodic reports to the Ministry where required by law.
- Renewal of license: A transport-based license in Saudi Arabia is permitted for a certain duration and needs renewal before the expiration of this duration. Renewal goes through all procedures performed at the time of original submission by submitting the documentation again, paying the renewal fee, and additional inspections.
- Loss of compliance: In case of failing to adhere to the requirements, fines will be charged for non-compliance, a suspension of the license, or even a lawsuit line.
Challenges in Obtaining a Transport License in Saudi Arabia
The process of acquiring a license for transportation in Saudi Arabia could encounter several possible challenges, including but not limited to:
- Bureaucracy: The licensing process is usually entrenched with complicated government regulatory and procedural processes. One should be able to comply with the requirements clearly to avoid unwanted delays and to be updated as far as changes in regulations are concerned.
- Ensuring Vehicle Compliance: It could be a challenging task to achieve the standards set for vehicles, especially when they are to be imported from other countries.
- Meeting Financial Needs: licenses have big financial guarantees or proof of capital, which bars most small businesses. Proper financial planning and management should be able to meet most of these needs.
Conclusion
Get past these stumbling blocks by seeking professional help from experts like Gatestone Group. We will help ensure your business is on track with all the compliance requirements.
Without proper guidance, businesses willing to become a part of the transportation business in Saudi Arabia would be lost. Proper documentation in preparing relevant documentation for the licensing process and meeting all eligibility requirements ensures complete success. These steps, following where necessary advice from specialists, will be of great help in managing the licensing procedure to hit the road with confidence. Take the first step towards your Saudi Arabia goals. Our team is here to help. Contact us for a complimentary consultation via email at [email protected] or call +971 4 450 1023.
FAQs
The processing time for obtaining a transportation license in Saudi Arabia can vary depending on several factors, including the type of license, the completeness of your application, and any additional requirements.
Generally, the process can take anywhere from 30 to 60 days. However, it’s important to note that this is an estimate, and the actual timeline may be shorter or longer.
It’s recommended to start the application process well in advance to allow sufficient time for review and approval. Working with a local business setup company can also help streamline the process and ensure that all requirements are met.
Yes, foreign companies can apply for a transportation license in Saudi Arabia. However, the process may have specific requirements and conditions that must be met.
For more information, reach out at [email protected] or +971 4 450 1023.
