Dreaming of launching your business in Saudi? Getting a commercial license in Saudi Arabia is where it all begins, sounds tricky? Don’t stress, we’ve got the easy steps (and a few smart hacks) to get you up and running fast.
What’s a Commercial License in Saudi Arabia?
Think of a commercial license in Saudi Arabia as your golden ticket to do business legally, whether you’re selling products, offering services, or kicking off a big venture, this license is what makes it official—no license, no business!
Why Do You Need Commercial License in Saudi Arabia?
As it tells the government (and everyone else) that your business is legit, it’s proof you’re playing by the rules, and it keeps you protected from legal trouble, plus, it’s the first step to making your business dreams real.
Running a business without a license can land you in hot water—think fines, shutdowns, or worse, the license is your safety net, keeping everything above board and smooth sailing, here are some benefits of obtaining one:
- Official Status: You’re recognized as a real, legal business.
- More Opportunities: You can apply for tenders, land bigger deals, and work with confidence.
- Financial Perks: Open business bank accounts and attract investors.
- Trust Factor: People trust you more when they know you’re licensed.
- Extra Benefits: Get access to government support and services.
Read also: Everything about investing in Saudi Arabia.
What Types of Business Licenses Can You Get in Saudi Arabia?
If you're thinking of starting a business in Saudi, you’ve got a bunch of license options depending on what you’re planning to do. Here’s a simple breakdown:
- Commercial License: This one's for businesses that buy and sell stuff—whether it's retail or wholesale. It’s the go-to for shops and trading companies.
- Industrial License: Planning to make or manufacture products? You'll need this license to set up a factory or any kind of industrial business.
- Professional License: If you’re offering a service like consulting, legal advice, or engineering, this is your match. It’s for skilled professionals.
- Service License: For things like IT services, healthcare, education, or delivery services—basically, anything service-based.
- Tourism License: Dreaming of opening a travel agency, hotel, or tour company? You’ll need this to work in the tourism world.
- Agricultural License: Want to get into farming, livestock, or any type of agriculture? This license covers all things green.
- Real Estate License: Perfect if you’re into building, selling, or managing properties. It’s a must-have for real estate businesses.
- Foreign Investment License: This one's a big deal—it lets foreign investors fully own their business in Saudi under certain conditions that help your business grow.
How to Get a Commercial License in Saudi Arabia
Thinking of setting up your business in Saudi? Here’s your step-by-step for the method of obtaining commercial license in saudi arabia:
1.Pick Your Business Type
First things first decide if you’re opening as an LLC, a sole trader, a joint stock company, or even a branch of a foreign company, this shapes everything that comes next.
2.Lock In Your Business Name
Got a name in mind? Reserve it online with the Ministry of Commerce, make sure it’s catchy and available!
3.Get Your Investment License (If You’re Foreign)
If you're an international investor, you’ll need a license from MISA, they’ll ask for stuff like your company’s registration papers, a business plan, and financials.
4.Write Up Your Company Rules
Time to draft your Articles of Association, this is just the official doc saying what your business does and how it’s run, then you get it stamped and notarized.
5.Register Your Business
Now submit your application for a Commercial Registration (CR) through the Ministry of Commerce, once that’s sorted, boom you’re officially in business!
6.Join the Chamber of Commerce
This is like getting your business ID badge, it also gives you access to useful business networks and events.
7.Get Local Approvals
Depending on what your biz does, you might need extra licenses like health permits or location approvals from your local municipality.
8.Register for Tax and Social Insurance
Sign up with the tax authority (GAZT) and get your employees registered for social insurance (GOSI), this keeps things legal and above board.
9.Open a Business Bank Account
Last step, open a bank account in your company’s name so you can handle payments and expenses like a pro.
Read also: Business Setup for Foreigners in Saudi Arabia.
Make Business Setup Easy with Motaded
Starting a business in Saudi Arabia? We know it can feel like a lot, but Motaded is here to keep it simple, our expert team handles all the tricky stuff so you can focus on growing your business with confidence.
Why team up with Motaded?
Our team will be co operative in the following:
- Free First Chat: Get clear, personalized advice to kick off your journey.
- Paperwork? Done! We handle all your documents and make sure everything’s correct and compliant.
- We Deal with the Authorities: We’ll submit your applications and follow up so you don’t have to worry.
What You Need to Get a Commercial License in Saudi Arabia
Here’s a quick look at the basic paperwork you’ll need to get your business license sorted:
- Capital Check: Some businesses need a certain amount of starting money, especially if you're a foreigner, double-check how much cash you’ll need to get things rolling.
- 🇸🇦 Hire Locals (Saudization): You’ll need to hire a set number of Saudi nationals, depending on your industry, it's part of keeping your business legit, so plan ahead for this.
- You Need a Real Office: Yep, your business has to have a physical office space—no PO boxes or virtual addresses, get that sorted early to avoid delays.
- Special Rules for Some Industries: If you’re in fields like tourism, healthcare, or real estate, expect a few extra hoops to jump through, always check if your business type has extra rules.
How to Get a Commercial License with a Saudi Partner
If you’re a foreign business looking to jump into wholesale or retail in Saudi Arabia with a Saudi partner, here’s what you’ll need:
- A copy of your company’s commercial registration, stamped by the Saudi Embassy.
- If your Saudi partner is a GCC national and their info isn’t in the Absher system, you’ll need a copy of their national ID.
- Your latest financial statements, also stamped by the Saudi Embassy.
Key Rules to Keep in Mind
Also, you should take care of the following points:
- If you’re teaming up with a Saudi partner, they need to hold at least 25% of the company shares. The minimum capital you’ll need is SAR 26,666.67, and your Saudi partner can own up to 75% max.
- If your partner has premium residency, these ownership limits don’t apply.
- Also, if any of your partners already have a license from the Ministry of Investment, make sure to mention that when you fill out the online form.
- You’ll need to provide their ID or commercial registration info when applying.
- Your business is also required to train at least 15% Saudi employees, and you can’t open more than one store in the same area.
How to Apply for a Fully Foreign-Owned Commercial License in Saudi Arabia
If you’re a fully foreign-owned business and want to dive into wholesale, retail, or e-commerce in Saudi Arabia, here’s what you need to know, Here's what you’ll need:
- A copy of your commercial registration showing you operate in at least 3 regional or international markets.
- Your latest financial statements, certified by the Saudi Embassy.
Important Rules to Know
- This license is only for companies that are active in at least 3 regional or international markets.
- You’ll need a minimum capital of SAR 30 million to qualify for 100% foreign ownership.
- If any of your shareholders already have a license from the Ministry of Investment, you’ll need to mention that when you fill out the online application.
- Your company must commit to training at least 30% Saudi employees.
What Are the Investment and Saudization Requirements?
Once your company gets its license, there are a few key commitments you’ll need to stick to over the first five years:
- You must meet the Saudization rates set by the Ministry of Human Resource and Social Development, and have a clear plan to increase Saudi representation in senior management roles.
- At least 30% of your Saudi staff should receive training every year.
Your company also needs to meet one of these two investment options:
- Invest at least SAR 300 million over 5 years (with SAR 30 million as cash capital).
- Or you can go for the option of investing at least SAR 200 million over 5 years (with SAR 30 million in cash capital) and meet at least one of the extra requirements during that time.
If you’re having trouble meeting any of these requirements, don’t worry—just reach out to [email protected] for help.
What Are the Fees for a Foreign Commercial License in Saudi Arabia?
Here’s a quick and clear breakdown of the costs you’ll need to keep in mind if you're going for a 100% foreign commercial license in Saudi Arabia:
- The basic license fee is SAR 2,000 per year, valid for up to 5 years.
- In the first year, there’s a SAR 10,000 fee to sign up for services from the Investor Relations Centers at the Ministry of Investment.
- If you’re in manufacturing, at least 30% of the products you sell locally need to be made in Saudi Arabia.
- For R&D-focused companies, you’ll need to put at least 5% of your total sales into research programs within the Kingdom.
- If your business is in logistics and distribution, you’ll have to set up a service center to handle logistics and after-sales support.
- From the second year onward, the annual subscription fee is SAR 60,000
Heads up: Make sure to pay all service fees within 60 days of billing, if you miss the deadline, your service gets canceled and you’ll need to submit a new application.
FAQs about commercial license in Saudi Arabia
How long does it take to get a commercial license in Saudi?
Usually between 1 to 2 weeks if everything’s ready, but it might take longer if extra approvals are needed.
Do I need a Saudi partner to start a business?
Not always! Some activities allow 100% foreign ownership, but certain sectors still require a local partner—check what applies to your business.
Can foreigners fully own a company in Saudi Arabia?
Yes, in many sectors foreigners can own 100% of their business, but you’ll need to meet the official requirements.
What’s the cost of getting a commercial license?
It depends on your business type and size. Fees generally start from a few thousand SAR, and there could be extra costs for specific industries.
Is it possible to run a business from home?
For some small activities, yes. But most licenses need you to have a proper office to stay compliant.
What’s Saudization, and do I have to follow it?
Saudization means hiring a set percentage of Saudi employees. Whether it applies to you depends on your sector and company size.
What documents do I need to apply for?
You’ll need your passport, business plan, address proof, and possibly a lease contract. Foreigners also need an investor license.
Can I apply online, or do I have to be in Saudi?
Most of the process is online now, but some steps—like signing papers or inspections—might need you or your rep to be there in person.
Let’s Get You Started!
📞Call us at: +966 53 979 7197
or 📧 email: [email protected]
and we’ll take care of the rest!