Types of Business Licences in Saudi Arabia

1.     Service Licence

As the name indicates, if you want a services-related business, for example, tourism, healthcare, education or technology, catering etc you will need a service licence. The requirements for a service licence are:

• Minimum capital requirement of SR 50,000.
• A copy of the shareholding partner’s commercial registration and the financial statements of the foreign company from the previous year certified from Saudi Embassy.
• A physical office space in Saudi Arabia to serve as your registered address.
• To apply for a foreign branch company, it must be established outside of Saudi Arabia for more than 1 year and has a positive audited financial report.

2.     Entrepreneurial Licence

This license is for individuals who have an innovative mind and want to experiment with business idea in KSA. The entrepreneurial licence has immense benefits including uncomplicated regulations, funding from government support programs, reduced fees at different stages and many other benefits. All of this is to encourage entrepreneurs to set up their businesses in KSA and contribute to the growth of Saudi Arabia. Here are the requirements:

• The entrepreneur should provide a patent for their idea, have venture capital funding, or a letter of support from a government agency like MISA, PIF, CODE, KAUST, TDF, etc.
• Support letter from a startup incubator in Saudi Arabia.

3.     Industrial Licence

Foreign investors who want to expand their factories in Saudi Arabia are granted an industrial license. One of the key benefits is that now foreigners can have 100% ownership of their business. This Saudi Arabian business license facilitates strategic investment and guarantees the industrial sector’s dynamic growth within the country’s economy. The prerequisites are as follows:

• The company must be established outside of Saudi Arabia for more than 1 year and has a positive audited financial report.
• A copy of the shareholding partner’s commercial registration must be certified by the Saudi Embassy.
• The financial statements of the foreign company from the previous year must also be certified by the Saudi Embassy.

4.     Real Estate Licence

This Saudi Arabia business license is only available to international real estate development firms who intend to build projects in Saudi Arabia that will cost more than 30 million Saudi riyals in total for both land and construction. The real estate investment should, in general, be situated outside of Mecca and Medina’s urban limits. The requirements for a Saudi Arabian real estate License are:

• A certified copy of the holding partner’s commercial registration from the Saudi Embassy.
• The financial statements of the foreign company from the previous year to be certified by the Saudi Embassy.

5.     Agricultural Licence

Foreigners looking to do business in Saudi Arabia in the sector of farming and livestock production can avail an agricultural license. This type of license allows for 100% ownership rights, which will support the growth and improvement of the kingdom’s food production industry. As part of Saudi Vision 2030, achieving food security and the 85% localisation target in processed food products are significant objectives that will present numerous growth prospects. The prerequisites for an Agricultural License in Saudi Arabia are as follows:

• The company must have been founded outside of Saudi Arabia and exists for a minimum of one year.
• A copy of the shareholding partner’s commercial registration must be certified by the Saudi Embassy.
• The financial statements of the foreign company from the previous year must also be certified by the Saudi Embassy.

6.     Mining Licence

With a potential worth of $1.3 trillion, Saudi Arabia’s mining industry is booming. Foreign companies are permitted to invest in and carry out mining operations within Saudi Arabia through the Mining License. With a mining business license, foreign companies can actively operate mining operations in Saudi Arabia, with foreign investors being able to own 100% of the company. The requirements for a Saudi Arabian mining license are:

• The company must be established for more than 1 year outside of Saudi Arabia and has a positive audited financial report.

• Minimum capital requirement of SAR 25,000.
• The Saudi Embassy will certify a copy of the shareholding partner’s commercial registration as well as the financial statements of any foreign companies from the previous year.

7.     Trading Licence

Foreign investors can obtain a Trading or Commercial License in Saudi Arabia either by applying for 100% foreign ownership, or in partnership with a Saudi shareholder to pursue wholesale or retail business activities. With this license, foreign companies can trade goods in Saudi Arabia’s wholesale and retail markets. The requirements for a foreign owned trading license in Saudi Arabia’s include:

• The foreign company, Saudi Arabia excluded, must have branches in at least three different countries.
• A minimum SR 30 million capital investment in the first year and a total SR 170 million capital investment over the next five years in Saudi Arabia startup.

Requirements for 25% Saudi partner:

• SR 26,666,666 in capital investment during the first year; foreign investors’ shares cannot be held for less than SAR 20 million.

Requirements for 100% GCC-national owned company:

• A minimum of SR 50,000 in share capital
• Every other regulation is the same for Saudi citizens as above

8.     Professional Licence

In Saudi Arabia, companies offering professional services like legal advice, accounting, engineering, and architecture can be established with the help of a Professional License. Professionals from other countries are eligible to own and operate 100% foreign professional businesses in Saudi Arabia. The requirements for a Saudi Arabian professional license are as follows:

• For 100% foreign ownership, branches of the foreign company must exist in at least 4 different countries.
• Each branch’s share capital should equal SR 10 million.
• The foreign company ought to have worked in this field for at least seven years.