Types of Business Licenses in Saudi Arabia

Updated: 4 March 2025, 11:45 am

What Are Business Licenses and Why Do You Need One in Saudi Arabia?

Are you thinking about starting a business in Saudi Arabia? One important step you’ll need to take is getting a business license. But why is it so important?

A business license is an official permit that allows you to operate legally in the Kingdom. In Saudi Arabia, the Ministry of Investment issues these licenses. Having a business license not only keeps you compliant with the law, but it also adds credibility to your business when working with partners or authorities.

Curious to find out more about why you need a business license? Let’s explore!

Types of Business Licenses in Saudi Arabia

The Kingdom of Saudi Arabia generally offers many types of licenses that allow businesses to conduct various types of activities within its jurisdiction. Let us first list the most popular eight, usually given to foreign investors, then delve into the details of each one.

1. Service License 
2. Entrepreneurial License
3. Industrial License
4. Agricultural License
5. Real Estate License
6. Trading License (Commercial License)
7. Mining License
8. Professional License

Service License 

The Service License is granted to foreign companies, allowing them to offer services in Saudi Arabia. These services can include industries such as construction, technology, education, healthcare, tourism, and more.

One of the key benefits of the Service License is that it allows foreign investors to own 100% of their service-based businesses in Saudi Arabia. This makes it an appealing option for investors looking to expand into the Saudi market or business owners aiming to grow their operations in the Kingdom.

Requirements for Obtaining a Service License in Saudi Arabia

To obtain a Service License in Saudi Arabia, the following requirements must be met:

1. The business must have been established for at least one year outside of Saudi Arabia.
2. A minimum capital of SAR 25,000 is required.
3. A certified copy of the Commercial Registration of the shareholding partner, verified by the Saudi Embassy.
4. The foreign company’s financial statements for the previous year, also certified by the Saudi Embassy.

Entrepreneurial License

The Entrepreneurial License in Saudi Arabia is designed for startups and offers several benefits tailored to support new businesses. With this license, companies enjoy simplified regulations, lower fees, and access to government support programs. It’s a great opportunity for entrepreneurs and innovators looking to establish their businesses in a growing and prosperous market like Saudi Arabia.

Requirements for Obtaining an Entrepreneurial License in Saudi Arabia

To obtain an Entrepreneurial License, you need to meet the following criteria:

1. A patented idea, venture capital backing, or a support letter from a government entity such as the Ministry of Investment (MISA), The Public Investment Fund (PIF), King Abdullah University of Science and Technology (KAUST), or the Tourism Development Fund (TDF).
2. An endorsement letter from a startup incubator.

Industrial license

An industrial license is required for foreign investors who want to establish a manufacturing plant in Saudi Arabia. The good news is that 100% foreign ownership is now allowed for industrial ventures in the Kingdom. These licenses are crucial in driving economic growth by attracting strategic investments and supporting the industrial sector.

Requirements for Obtaining an Industrial license in Saudi Arabia

To obtain an Industrial License, the following requirements must be met:

1. The business must have been established for at least one year outside of Saudi Arabia.
2. A minimum capital of SAR 25,000 is required.
3. A certified copy of the Commercial Registration of the shareholding partner, verified by the Saudi Embassy.
4. The foreign company’s financial statements for the previous year, also certified by the Saudi Embassy.

Read more: Visa-Free Countries for Saudi Iqama Holders

Agricultural License

Agricultural licenses are issued to foreign companies involved in farming and livestock production in Saudi Arabia. As part of Saudi Vision 2030, the Kingdom aims to achieve food security and localize 85% of its processed food products. By offering these licenses and allowing 100% foreign ownership, Saudi Arabia is helping to reach this goal while also advancing the food production sector.

Requirements for Obtaining an Agricultural License in Saudi Arabia

To obtain an Agricultural License, the following requirements must be met:

1. The business must have been established for at least one year outside of Saudi Arabia.
2. A minimum capital of SAR 25,000 is required.
3. A certified copy of the Commercial Registration of the shareholding partner, verified by the Saudi Embassy.
4. The foreign company’s financial statements for the previous year, also certified by the Saudi Embassy.

Real Estate license

Foreign real estate development companies looking to develop projects in Saudi Arabia can acquire a real estate license if the total cost for land and construction exceeds 30 million Saudi riyals. The project must be located outside the boundaries of Mecca and Medina, and the license can typically be issued within 1 to 2 days.

Read more: 

• Saudi Arabia Residency by  Real Estate Investment 

Requirements for Obtaining a Real Estate License in Saudi Arabia

To obtain a Real Estate License, the following documents are required:

1. A certified copy of the Commercial Registration of the shareholding partner, verified by the Saudi Embassy.
2. The foreign company’s financial statements for the previous year, certified by the Saudi Embassy.

Trading License (Commercial license)

In Saudi Arabia, the Trading License, also known as the Commercial License, is available to two categories of foreign investors:

1. Those who wish to conduct wholesale or retail business activities in partnership with a Saudi shareholder.
2. Those who want to operate independently with 100% foreign ownership.

Requirements for Obtaining a Trading License (Commercial License) in Saudi Arabia

For 100% Foreign Ownership:

• The foreign company must have branches in at least 3 countries outside Saudi Arabia.
• A minimum capital investment of SAR 30 million in the first year.
• An allocated capital investment of SAR 170 million over 5 years in the Saudi company.

For 25% Saudi Partner:

• Minimum capital investment of SAR 26,666,666 in the first year.
• Foreign investors must hold shares worth at least SAR 20 million.

For 100% GCC-National Owned Companies:

• Minimum capital of SAR 50,000.
• The laws governing Saudi nationals’ licenses apply.

Mining License

Foreign companies wishing to invest and conduct mining activities in Saudi Arabia must obtain a Mining License. With 100% foreign ownership allowed, international investors and firms can actively participate in the Kingdom’s growing mining sector, which is experiencing significant value and development.

Requirements for Obtaining a Mining License in Saudi Arabia

To obtain a Mining License, the following requirements must be met:

1. The business should have been established outside of Saudi Arabia for at least one year.
2. A minimum investment of SAR 25,000 is required.
3. A certified copy of the Commercial Registration of the shareholding partner, verified by the Saudi Embassy.
4. The foreign company’s financial statements for the previous year, certified by the Saudi Embassy.

Professional License

Foreign businesses wishing to provide professional services such as law, taxation, consultancy, engineering, architecture, and more in Saudi Arabia must obtain a Professional License. With full ownership allowed, these businesses can operate freely and take advantage of Saudi Arabia’s rapidly developing economy.

Requirements for Obtaining a Professional License in Saudi Arabia

To obtain a Professional License, the following conditions must be met:

1. The foreign company should have branches in at least four countries.
2. The share capital of one branch should be at least 10 million SAR.
3. The foreign company must have at least 7 years of experience.

Conclusion

Saudi Arabia offers various business licenses for foreign investors in sectors like services, agriculture, industry, and real estate. Many of these licenses allow 100% foreign ownership, making it easier for global entrepreneurs to start and grow their businesses. The Saudi Premium Residency by Investment Program also provides long-term residency options for investors, helping them take advantage of the Kingdom’s growing economy. So, whether you are considering company formation in Saudi Arabia or looking to expand your operations, the Kingdom offers a favorable environment to grow and succeed.

Frequently Asked Questions 

1. Are there any special considerations for GCC Nationals when establishing businesses?

GCC nationals have the same benefits as Saudi citizens and enjoy 100% ownership for a minimum capital of SAR 50,000.

2. What is the difference between SAGIA and MISA?

The Saudi Arabian General Investment Authority (SAGIA) was established in 2000 to oversee attracting investment and issuing licenses to investors. In 2020, this authority became the Ministry of Investment Saudi Arabia (MISA).

3. What is the difference between MISA License and MCI License?

A Ministry of Investment in Saudi Arabia License (MISA License) allows 100% ownership to foreign investors in Saudi Arabia. A Ministry of Commerce and Industry  License (MCI License) is a business license granted to Saudis, GCC nationals, and special residency holders.

4. What is the Commercial Registration Number in Saudi Arabia?

The Ministry of Commerce in Saudi Arabia assigns an identification number unique to each company, referred to as the Commercial Registration Number (CR Number).

5. What is the validity of a business license in Saudi Arabia?

Saudi business licenses are valid for one year and must be renewed annually.

6. What are the most popular license types in Saudi Arabia?

The most popular business licenses are Trade Licenses, Service License, Industrial License, and Professional License.

7. Are foreigners allowed to invest across all Saudi sectors?

Foreigners cannot invest in sectors listed in Saudi Arabia’s “Negative List,” including oil exploration, real estate in Mecca and Medina, pilgrimage services, and fishing.

8. What is a Regional Headquarters License in Saudi Arabia?

Saudi Arabia’s Regional Headquarters Program requires international companies that wish to operate in the country to establish their regional headquarters in the Kingdom.