As part of the reforms launched in the wake of Vision 2030, Saudi Arabia has liberalized its rules and regulations relating to business license in Saudi Arabia by foreigners and locals. Business licenses for foreigners in Saudi Arabia will depend on their planned business activities. The different types of business licenses include commercial Licenses, industrial Licenses, service licenses, real estate licenses, agricultural Licenses, mining licenses, professional Licenses and an entrepreneurial license. The licenses are issued by the Ministry of Investment of Saudi Arabia, formerly SAGIA.
Key factors regarding business license in Saudi Arabia
MISA Registration: To start a business in Saudi Arabia as a foreigner, you first need a registration from MISA (Ministry of Investment Saudi Arabia).
Business Activity depends on the license type: The specific License required is based on the nature of your business, such as trading, manufacturing, real estate or providing professional services.
100% foreign ownership: Depending on the industry and specific requirements, foreign investors may be eligible for 100% ownership of a company.
Entrepreneurial License: The entrepreneurial license offers simplified regulations and potential benefits for start-ups.
Different types of Saudi Business Licenses
The Saudi Arabian government issues eight different business licenses. The foreign investors can choose any of them. The various types of licenses are given below:
- Service License: Intended for setting up restaurants, marketing agencies, IT, and other general services. This is also required for professional services like consultancy, engineering or legal work. Foreign companies can own 100% of a service company in Saudi Arabia. The business must have been established outside the Kingdom for over a year.
- Entrepreneurial License: An entrepreneurial license is specifically for start-ups and offers several benefits, such as streamlined regulations, reduced fees and access to government support programs.
- An Industrial License allows foreign companies to establish manufacturing facilities in Saudi Arabia and for assembly of goods.
- Agricultural License for foreign companies to engage in Agricultural activities in Saudi Arabia, such as farming and livestock production.
- Real Estate License for foreign companies to engage in real estate development of projects in terms of land and construction not less than 30 million SAR and outside the borders of cities of Mecca and Medina.
- Commercial License (Trade License): This License permits wholesale and retail trade activities. It allows foreign companies to import and export goods in Saudi Arabia. For 100% foreign ownership, the company should have three branches in different countries outside Saudi Arabia.
- Mining licenses are intended to allow foreign companies to participate in mining activities in Saudi Arabia. Foreign companies can own 100% of the mining companies in Saudi Arabia. The mining business must have been established outside of the KSA for over a year.
- Professional Licenses allow foreign professionals to practice law, taxation, consultancy, engineering, architecture, and other advisory services in Saudi Arabia. Foreign professionals can own 100% of a professional company in Saudi Arabia. An MISA professional license is for specific consulting activities such as engineering consulting, marine consulting, and mining consulting.
Challenges for Business Licenses
For a Saudi business registration, you may face some challenges in business licensing. They include:
- Legal & Regulatory Framework: There is a need to fully understand the legal and regulatory needs of the country for compliance and risk management. Some parts of the legal framework are unclear, and many regulations are in Arabic.
- Lack of cultural awareness: With Saudi Arabia’s unique cultural environment, investing companies should consider cultural differences while conducting business. These include awareness of dress codes, business etiquette, and communication styles.
- Immigration regulations: There are immigration regulations around hiring locals and expats.
- Access to information: Getting information on legal and tax matters can be difficult.
- Lack of intellectual property rights
- Different technical standards
- Preference for local businesses and employees
- Tough immigration standards
- Delayed payments from the government
- Inflation
- Resolving business disputes
- Need for different branding.
- Different work week
Obtaining services from a professional agency like Helpline Group in Saudi Arabia is advisable to obtain business licenses and overcome the challenges.
How does the Helpline Group help in Saudi company formation?
Helpline Group, backed by a strong and experienced team, brings over 25 years of company formation expertise, offering clients a seamless, hassle-free experience.
Our seasoned professionals possess in-depth knowledge of the latest rules and regulations, ensuring compliance and efficiency. We undertake business license services to expeditiously obtain the proper business license for clients in Saudi Arabia.
