Everything You Need to Know About the Business License Types in Saudi Arabia

In a significant push for economic growth, the Ministry of Investment in Saudi Arabia (MISA) issued nearly 2,728 investment licenses in Q2 of 2024. A striking 50% increase year-on-year. While there has been a slight dip compared to Q1, this impressive surge highlights Saudi Arabia’s open arms for foreign investment and business expansion. With a mix of progressive reforms and tailored licensing options, the Kingdom is making it easier than ever for global entrepreneurs and established corporations alike to enter its booming economy. In this blog, we will dive into the eight primary types of business licenses offered by MISA. Exploring each option’s requirements, benefits, and ideal business models. Whether you are a startup innovator or a major industrial player, there is a license here to help turn your vision into reality in Saudi Arabia.

How many types of business licenses are there in Saudi Arabia?

Saudi Arabia offers eight main types of business licenses. These are provided by MISA and cater to a wide array of industries and business models. Each type of license has specific requirements and benefits tailored to different business operations. Here is a detailed look at each one:

1. Professional license

A professional license is granted to individuals or companies offering specialised services, including consulting in fields like law, engineering, architecture, and more. This license is beneficial for professionals and firms offering high-level consultancy or advisory services.

What are the key requirements for this business license?

• A professional license typically requires a local Saudi partner holding a 25% stake in the company.
• For 100% foreign ownership, engineering firms must have at least four branches and a share capital of SAR 10 million.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals after the first year.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’ relations centres. Afterward, the fees are applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again

2. Entrepreneurial license

This license is designed to support startups and innovative ventures. It offers many incentives, such as streamlined regulations and access to government-backed programs, making it easier for new businesses to flourish. This type of license helps budding entrepreneurs enter the Saudi market with reduced regulatory hurdles and financial burdens.

What are the key requirements for this business license?

• The startup should either have a patented idea, be backed by venture capital, or have a letter of support from a government entity like MISA or KAUST.
• MISA pre-approval is required.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for (5) years as maximum.

• Payment for obtaining services from Ministry of Investment investors’ relations centres is (10,000) Saudi riyals for each year starting from the beginning of the fourth year, and after the end of the fifth year, the entity is reclassified and the Payment for services is applied as a regular license.

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

3.Service license

The service license is suitable for companies that offer various services, such as IT services, marketing, consultancy, and general business solutions. It allows companies to own 100% of their business in Saudi Arabia, which is a significant advantage for foreign investors. This license is ideal for businesses such as restaurants, software companies, and app developers.

What are the key requirements for this business license?

• The business must have been established outside Saudi Arabia for at least one year.
• It should not be a sole proprietorship.
• The minimum required capital is SAR 25,000.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for (5) years as maximum.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’

relations centres. Afterward, the fees is applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

4.Commercial license

A trade license enables foreign businesses to engage in importing, exporting, and trading goods in Saudi Arabia. This license is crucial for companies that deal with physical products and require international and local trade operations.

What are the key requirements for this business license?

• Foreign companies must have branches in at least three countries.
• A minimum capital investment of SAR 30 million in the first year.
• Further capital injection of SAR 170 million within five years.

Alternatively, businesses can partner with a local Saudi investor, which reduces capital requirements but still offers substantial business ownership.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for the contract period.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’

relations centres. Afterward, the fees are applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of failure to make payment within such identified period, the service will be cancelled and the applicant have to apply again.

5.Industrial license

For those interested in manufacturing and production, the industrial license is the go-to option. It permits businesses to set up factories and industrial plants, helping to foster the Kingdom’s industrial capabilities. This is an excellent option for businesses looking to invest in sectors like petrochemicals, automotive, or electronics manufacturing.

What are the key requirements for this business license?

• The business must be at least one year old and should not be a sole proprietorship.
• A minimum capital of SAR 25,000 is necessary.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for (5) years as maximum.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’ relations centres. Afterward, the fees is applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

6.Mining license

The mining license is for companies interested in mining natural resources such as minerals, metals, or other geological materials. This license aligns with Saudi Arabia’s strategic focus on diversifying its economy through natural resources. The mining sector in Saudi Arabia is growing, and this license is ideal for businesses looking to tap into its resource-rich lands.

What are the key requirements for this business license?

• The business must have been established outside the Kingdom for more than a year.
• A minimum capital of SAR 25,000 is required.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for (5) years as maximum.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’ relations centres. Afterward, the fees is applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

7.Agricultural license

The agricultural license is aimed at businesses involved in farming, livestock, and other agricultural activities. Saudi Arabia’s agricultural industry is vital for food security, and this license offers businesses an opportunity to contribute to this sector. This license is suitable for companies focusing on crop production, poultry farming, and other related agricultural activities.

What are the key requirements for this business license?

• The business must be established for more than one year outside Saudi Arabia.
• A minimum capital of SAR 25,000 is needed.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals annual for (5) years as maximum.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’ relations centres. Afterward, the fees are applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

8.Real estate license

The real estate license allows companies to invest in and develop large real estate projects in Saudi Arabia. However, projects in the holy cities of Mecca and Medina are restricted. This is a good option for foreign investors looking to participate in Saudi Arabia’s booming real estate sector, particularly in emerging regions.

What are the key requirements for this business license?

• The total investment in land and construction must exceed SAR 30 million.
• Investments should be located outside of Mecca and Medina.

How much does this business license cost?

Fees: Payment of license fee of (2000) Saudi Riyals after the first year.

• Payment of (10,000) Riyals as subscription for the first year to obtain services from Ministry of Investment investors’ relations centres. Afterward, the fees is applied as subscription fees for services in the following years (SR 60,000).

• Service fees shall be paid within (60) days from the date of bill issuance. In case of the payment’s delay within the identified period, the service will be cancelled and the applicant have to apply again.

Saudi Arabia is diverse range of business licenses. It opens doors to opportunities in nearly every sector of the economy—from innovative tech solutions to industrial manufacturing and agriculture. MISA’s thoughtful approach to licensing reflects the Kingdom’s broader vision of economic diversification and development. For investors and entrepreneurs, these licenses provide a clear path to enter one of the Middle East’s most promising markets with the support of tailored incentives and regulatory guidance.

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