Understand the various business licenses available to foreign investors in Saudi Arabia, including service, industrial, commercial, and professional licenses under MISA regulations.
By Sudhanshu Singh
As Saudi Arabia expands economic diversification under Vision 2030, the government continues to streamline regulations for foreign investors. The Ministry of Investment of Saudi Arabia (MISA) has defined a broad range of business licenses, each tailored to specific economic sectors. These licenses, regulated under decrees and rules including MISA guidelines, Royal Decrees, and relevant bylaws, are designed to facilitate full or joint ownership across service, industrial, commercial, and professional domains.
As of April 11, 2025, foreign entities can own 100 percent of companies in most sectors, subject to conditions defined under various licensing categories. This article provides a structured overview of these license types, eligibility, documentation, service timelines, and restrictions, based on MISA’s 11th Services Manual (2024).
Designed for companies in heavy, light, and transformative manufacturing, this license allows 100 percent foreign ownership. To qualify, investors must obtain approval from the Ministry of Industry and Mineral Resources and the National Center for Environmental Compliance. Documentation and capital requirements mirror those of the service license, and applications are processed through MISA’s E-Services Portal with a typical turnaround of 2–4 days.
This license includes two distinct tracks. The 100 percent foreign ownership path requires a minimum capital of SAR 30 million (US$7.9 million), business operations in at least three countries, and an investment commitment of SAR 200–300 million (US$ 53.2–79.9 million) over five years. Firms must also meet targets for R&D spending and local manufacturing.
The joint venture path requires at least a 25 percent Saudi shareholding and a SAR 26.6 million (US$ 7 million) capital base. While it exempts companies from the global presence requirement, it mandates compliance with Saudization thresholds.
Foreign investors in sectors such as logistics, IT, education, media, health, and catering may obtain a service license. The license allows 100 percent foreign ownership, subject to:
Targeted at high-growth startups, the entrepreneur license is granted to entities with venture capital support or endorsements from approved bodies such as King Abdullah University of Science and Technology (KAUST), Tourism Development Fund (TDF), or MISA. Applicants must demonstrate innovation or proprietary Intellectual Property (IP) and comply with standard documentation. Saudi sponsorship is optional for residents, and capital requirements are evaluated on a case-by-case basis.
For legal, engineering, architectural, and consulting firms:
This license allows foreign companies to establish liaison offices that conduct market feasibility studies and report findings to their global headquarters. Offices must submit an annual summary of activities to the Ministry of Investment. They are strictly prohibited from engaging in commercial contracts, generating revenue, or investing in the Kingdom, including collecting fees for training Saudi technicians.
The license is valid for up to five years, with an annual fee of SAR 2,000 (US$532.7). A SAR 10,000 (US$2,663.7) subscription applies in the first year for investor support services, followed by SAR 60,000 (US$15,982.6) annually. All fees must be paid within 30 days of invoice issuance to avoid cancellation.
Foreign property firms can obtain this license for projects valued at SAR 30 million (US$7.9 million) or more, excluding Mecca and Medina. Required documents include certified financials and a Saudi Embassy–attested commercial registration. GCC partners not in the ABSHAR system must submit national ID.
Premium residence holders are exempt from documentation. Annual fees are SAR 2,000 (US$532.7), with a SAR 10,000 (US$2,663.7) first-year investor support subscription, rising to SAR 60,000 (US$15,982.6) in following years. Payment is due within 30 days, or the application is void.
The Regional headquarter (RHQ) license is designed for multinational companies looking to centralize their regional operations in Saudi Arabia. To qualify, the group must have presence in at least two countries outside both the Kingdom and its home jurisdiction, through subsidiaries or branches. The RHQ must be established as a separate legal entity in Saudi Arabia, either as a company or a registered foreign branch, and is restricted from conducting direct commercial activities beyond its licensed scope.
Within six months of licensing, RHQ is required to initiate core strategic and management functions such as regional planning, performance review, market coordination, and acquisition support. It must also activate at least three optional functions within the first year, drawn from areas like HR, finance, legal, R&D, and logistics.
Staffing is a key compliance metric: by the end of year one, RHQ must employ a minimum of 15 full-time staff, including at least three senior executives with prior experience at the group’s global or regional headquarters. The license carries an annual fee of SAR 2,000 (US$532.7) and a first-year subscription fee of SAR 10,000 (US$2,663.7) for investor services; subsequent years are subscription-free. Any additional financial assessments determined during classification must be settled within 30 days to maintain license validity.
These licenses are available to foreign investors operating in extractive or agricultural sectors and follow standard MISA documentation and capital requirements. A minimum capital of SAR 25,000 (US$6,659.4) is required, and applicants must comply with similar capital-shareholding ratios.
The transport license is segmented into three subcategories: bus transport, metro systems, and a broad category covering taxis, car rentals, and freight operations. To qualify, foreign firms must demonstrate a minimum capital of SAR 500,000 (US$133,188.7), have 10 to 15 years of global operational experience, and maintain a presence in at least three international markets. Additional financial thresholds include revenues of SAR 3 billion (US$799.1 million) and assets of SAR 1.5 billion (US$399.5 million).
Applicants are also assessed on their compliance with Saudization requirements, historical traffic safety performance, and a record of successful contract execution.
Temporary licenses offer non-permanent entry points into the Saudi market. The government project proposal certificate allows foreign companies to bid on public tenders for up to one year without engaging in commercial activity. Eligibility requires ISO certification and a revenue history of at least SAR 500 million (US$133.1 million).
The temporary performance license enables foreign entities to carry out specific contracts they have been awarded, with the license valid only for the duration of the contract. These licenses are ideal for companies seeking short-term, project-based involvement without a long-term operational footprint.
All business license applications must be submitted via the MISA E-Services Portal. Standard requirements include:
Applicants must pay service fees within 30 days of invoice issuance or reapply.
Saudi Arabia’s business licensing system is structured to support diverse investor profiles, from multinational corporations to emerging startups. Each license type under the MISA 2024 Service Manual carries specific eligibility conditions and compliance obligations. By aligning license selection with business objectives and carefully preparing submissions, investors can enter the Saudi market with greater confidence.
Foreign investors are encouraged to consult legal and regulatory experts familiar with MISA’s Service Manual to navigate nuanced documentation and sectoral restrictions.
(US$1 = SAR 3.75)
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Middle East Briefing is one of five regional publications under the Asia Briefing brand. It is supported by Dezan Shira & Associates, a pan-Asia, multi-disciplinary professional services firm that assists foreign investors throughout Asia, including through offices in Dubai (UAE). Dezan Shira & Associates also maintains offices or has alliance partners assisting foreign investors in China, Hong Kong SAR, Indonesia, Singapore, Malaysia, Mongolia, Japan, South Korea, Nepal, The Philippines, Sri Lanka, Thailand, Italy, Germany, Bangladesh, Australia, United States, and United Kingdom and Ireland.
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