How to obtain a business license in Saudi Arabia

For foreign companies to establish a legal presence in Saudi Arabia, business licenses are required. The type of business license you will need depends on the nature of your business and its planned activities in the country.

To establish a company in Saudi Arabia, you must obtain a business license from the Ministry of Commerce and Investment (MCI).

The application process for a business license can be complicated, so it is advisable to use the services of a professional company. Business Licenses to establish a company in Saudi Arabia with Creation BC  is a greater way to go. We can help you with every aspect of your application, from collecting the required documents to submitting them to the MCI. We will also follow up with the MCI on your behalf to ensure your application is processed as quickly as possible.

The main types of business licenses in Saudi Arabia 

Commercial License: A commercial license is required for businesses that engage in trade or commerce, such as import/export, retail, or wholesale.

Industrial License: An industrial license is required for businesses that manufacture, process, or assemble products.

Service License: A service license is required for businesses that provide consulting, advertising, or transportation services.

To obtain a business license in Saudi Arabia, you must first register your company with the Saudi Arabian General Investment Authority (SAGIA). Once your company is registered, you can apply for the appropriate business license. The application process for a business license can be complicated, so it is recommended that you seek the assistance of a professional service provider.

Once you have obtained your business license, you will need a work visa to employ foreign workers in Saudi Arabia legally. The process for obtaining a work visa can be complex, so it is recommended that you seek the assistance of a professional service provider.

If you are planning to establish a company in Saudi Arabia, it is important to ensure that you comply with all the legal requirements. Failure to do so could result in your company being shut down and you being deported from the country. Therefore, you must seek professional assistance to ensure everything is done correctly.

Requirements for Commercial License  in Saudi Arabia

Commercial licenses are required for businesses that engage in trade or commerce, such as import/export, retail, or wholesale. The main requirements for a commercial license in Saudi Arabia are:

1. The company must be registered with the Saudi Arabian General Investment Authority (SAGIA).
2. The company must have a physical presence in Saudi Arabia.
3. The company must have a paid-up capital of at least SAR 500,000 (US$ 133,000).
4. The company must have a minimum of five shareholders.
5. The company’s activities must fall within the scope of its commercial license.
6. The company must comply with all other applicable laws and regulations.

7. The company must obtain the appropriate visas for its foreign employees.
8. The company must have a Saudi national as its general manager.
9. The Ministry must approve the company’s association with Commerce and Industry articles.
10. The company must have a registered office in Saudi Arabia.

Requirements for Industrial License in Saudi Arabia

Industrial licenses are required for businesses that manufacture, process or assemble products. The main requirements for an industrial license in Saudi Arabia are:

1. The company must be registered with the Saudi Arabian General Investment Authority (SAGIA).
2. The company must have a physical presence in Saudi Arabia.
3. The company’s activities must fall within the scope of its industrial license
4. The company must comply with all other applicable laws and regulations.
5. The company must obtain the appropriate visas for its foreign employees.
6. The company must have a Saudi national as its general manager.
7. The Ministry must approve the company’s articles of association of Industry and Minerals.
8. The company must have a registered office in Saudi Arabia.

Requirements for Service License in Saudi Arabia

Service licenses are required for businesses that provide consulting, advertising, or transportation services. The main requirements for a service license in Saudi Arabia are:

1. The company must be registered with the Saudi Arabian General Investment Authority (SAGIA).
2. The company must have a physical presence in Saudi Arabia.
3. The company’s activities must fall within the scope of its service license.
4. The company must comply with all other applicable laws and regulations.
5. The company must obtain the appropriate visas for its foreign employees.
6. The company must have a Saudi national as its general manager.
7. The Ministry must approve the company’s articles of association of Commerce and Industry.
8. The company must have a registered office in Saudi Arabia.

Types of Business Entities in Saudi Arabia

The most common business entity in Saudi Arabia is the limited liability company (LLC). LLCs can be either wholly owned by Saudis or joint ventures between Saudis and foreigners. Wholly-owned LLCs are more common, as they offer greater flexibility and tax advantages.

The other business entities that can be formed in Saudi Arabia are partnerships, sole proprietorships, and branches of foreign companies. Each entity type has advantages and disadvantages that should be considered before deciding.

Partnerships

Two types of partnerships can be formed in Saudi Arabia: general and limited. General partnerships are the most common type suitable for businesses with simple structures. On the other hand, limited partnerships are more complex and are typically used by businesses with multiple owners or investors.

Sole Proprietorships

A sole proprietorship is a business owned and operated by a single individual. Sole proprietorships are the simplest type of business entity and offer complete control to the owner. However, they also come with unlimited liability, meaning the owner is personally responsible for all debts and liabilities of the business.

Branches of Foreign Companies

A branch of a foreign company is a business owned and operated by a foreign company but has a physical presence in Saudi Arabia. For example, large multinational companies typically use branch offices that want to establish a presence in the Saudi market.

The main advantage of branches is that they offer complete control to the parent company. However, they also come with high setup costs and require approval from multiple government agencies.

The Saudi Arabian business environment is favorable for foreign investors. The country offers a stable political and economic environment, a large and growing market, and a pro-business government. In addition, several free trade zones offer special incentives for businesses.

However, businesses must be aware of the strict regulations of companies operating in Saudi Arabia. These regulations include requirements for licenses, visas, and local partners. Companies that fail to comply with these regulations can be subject to heavy fines or even closure.