Understanding the types of business licenses in Saudi Arabia is essential for anyone looking to start a business in the kingdom. By choosing the right types of licenses and following the necessary procedures, you can set up your business successfully and legally operate in Saudi Arabia. Do thorough research and seek professional advice to ensure a smooth business registration process. If you are considering setting up a business in Saudi Arabia, be sure to research the specific requirements for your industry and seek Neeja Corporate Services advice to guide you through the process of obtaining a business license in KSA.
Why Choose Saudi Arabia for Your Business?
Before diving into the specifics of obtaining a business license in Saudi Arabia, let’s first discuss why this country is a favorable choice for entrepreneurs. With its robust economy, strategic location, and business-friendly environment, Saudi Arabia offers numerous opportunities for business growth and expansion. Additionally, the government has implemented various initiatives to attract foreign investment, making it an ideal destination for aspiring business owners.
Main Types of Business Licenses in Saudi Arabia
In Saudi Arabia, there are several types of business licenses that entrepreneurs can obtain based on the nature of their business. The main types of business licenses include:
Service License: A service permit enables foreign corporations to offer a wide array of services in Saudi Arabia, which includes restaurants, marketing agencies, IT services, Web or App development, and other general services. Foreign corporations are allowed to have full ownership of a service company in Saudi Arabia.
Criteria:
- Business established outside of KSA for over 1 year (not a sole proprietorship)
- Minimum capital of SAR 25,000
Entrepreneurial License: An entrepreneurial permit is specifically designed for startups and provides various advantages, such as simplified regulations, reduced fees, and access to government support programs.
Criteria:
- Either a patented idea, VC-backed, or support letter from a government entity (MISA, PIF, CODE, KAUST, TDF)
- Endorsement letter & MISA pre-approval.
Industrial license: Foreign companies that have been established outside of KSA for more than 1 year and have a minimum capital of SAR 25,000 are eligible to obtain an industrial license in Saudi Arabia. This license allows them to establish manufacturing facilities and own 100% of an industrial company in the country.
Agricultural License: Foreign companies that have been established outside of KSA for over a year and have a minimum capital of SAR 25,000 are eligible to obtain an agricultural license in Saudi Arabia. This license permits them to participate in agricultural activities, including farming and livestock production and allows them to fully own an agricultural company in the country.
Real estate license: This service is offered to international real estate development firms if the combined cost of the project, including both land and construction, exceeds 30 million Saudi riyals, and the investment is located outside the boundaries of Mecca and Medina. For more information on this licensing requirement, we advise reaching out to MISA directly.
Trading license (Commercial license): Trading license (Commercial license) allows foreign companies to engage in the import and export of goods in Saudi Arabia. Foreign companies have the opportunity to fully own a trading company in the country.
Requirements for Foreign Investment:
1. 100% foreign ownership:
– The company must establish three branches in different countries outside Saudi Arabia.
– SAR 30 million capital must be injected/invested in the first year.
– SAR 170 million capital must be invested in the Saudi company within the next 5 years.
2. 25% Saudi partner:
– No need for branches.
– SAR 26,666,666 capital must be injected/invested in the first year, with foreign capital shareholding not less than SAR 20 million.
– No requirement to invest SAR 170,000,000 in the entity within 5 years.
For 100% GCC-National Owned Companies:
– GCC nationals are treated similarly to Saudis and are not subject to the above requirements.
– They can have 100% ownership of a Saudi entity with a minimum capital of SAR 50,000.
Mining license: Foreign corporations that have been in operation for over a year outside of Saudi Arabia are eligible to obtain a mining license, enabling them to conduct mining operations within the country. These companies are permitted to have full ownership of a mining company in Saudi Arabia, provided they meet the minimum capital requirement of SAR 25,000.
Professional License: A professional license in Saudi Arabia enables foreign professionals to engage in their respective fields such as law, taxation, consultancy, engineering, architecture, and other advisory services. Foreign professionals are permitted to have full ownership of a professional company in the country.
Requirements for a MISA Professional License are tailored for specific activities like engineering consulting, marine consulting, and mining consulting. It is mandatory to have at least a 25% local partner with significant experience in the field.
On the other hand, Engineering Firms seeking 100% Foreign Ownership must fulfill the following criteria:
– Establish four branches
– Each branch must have a share capital of 10 Million SAR
– Have a minimum of 7 years of experience in the industry.
Steps to Get a Business License in Saudi Arabia
- Determine the Type of Business: Before applying for a business license, it is important to determine the type of business you want to establish. Saudi Arabia offers different types of business licenses based on the nature of the business, such as a commercial license, industrial license, or professional license.
- Choose a Company Name: The next step is to choose a unique and suitable name for your business. Make sure the name aligns with the regulations set by the Ministry of Commerce and Investment in Saudi Arabia.
- Submit the Required Documents: To apply for a business license, you will need to submit certain documents such as a copy of your passport, a copy of the articles of association, a lease agreement for the business premises, and other relevant documents.
- Obtain Approval from Authorities: Once you have submitted all the required documents, you will need to obtain approval from the relevant authorities in Saudi Arabia. This step may involve getting approvals from different government agencies depending on the nature of your business.
- Pay the License Fee: After obtaining the necessary approvals, you will be required to pay the license fee to complete the process. The fee may vary depending on the type of business license you are applying for.
- Receive the Business License: Once you have completed all the necessary steps and paid the license fee, you will receive your business license. Congratulations! You are now ready to start your business in Saudi Arabia.
Why Choose Us for Your Business License Needs?
- Expertise: With years of experience in helping businesses get licenses in Saudi Arabia, we have the expertise to guide you through the process seamlessly.
- Efficiency: We understand the importance of getting your business up and running quickly. Our streamlined process ensures that you get your license promptly.
- Personalized Service: We offer personalized service to each of our clients, ensuring that your specific needs and requirements are met throughout the licensing process.
- Trust: Our track record of successfully helping businesses obtain licenses speaks for itself. You can trust us to handle your business license needs with professionalism and integrity.
Obtaining a business license in Saudi Arabia is an important step for entrepreneurs looking to establish a legal presence in the country. By understanding the types of licenses available, the steps involved in obtaining a license, and the regulatory framework governing business activities, entrepreneurs can navigate the process more effectively and ensure compliance with legal requirements. It is advisable to seek professional advice and guidance to ensure a smooth and successful application for a business license in Saudi Arabia.
Connect with Neeja Corporate Services
Are you looking to start your company in Saudi Arabia but feeling overcome by the registration process? Don’t worry, you’re not alone. Setting up a business in a foreign country can be challenging, but with the right guidance and support, it doesn’t have to be a stressful experience. Neeja’s business setup services offer complete support and serve as a one-stop shop for company setup in KSA. We provide a wide range of value-added services, such as different types of business licenses in Saudi Arabia. Over the years, we have successfully advised many new entrepreneurs to make their business in KSA dreams a reality.
To book a free consultation, call on +971 43243031. You can also send a WhatsApp message at +971 50 465 2843. To connect over email, send us your query at incorp@neejacs.com.
