Saudi Arabia has become a key investment hub, driven by its Vision 2030 initiative to diversify the economy and attract global businesses. This is reflected in the 73.7% increase in investment licenses issued in Q3 of 2024. To facilitate this growth, the Ministry of Investment Saudi Arabia (MISA) offers several foreign investment licenses tailored to different sectors. Here are the common types:
Saudi Arabia has emerged as a global hub for investment, driven by its Vision 2030 initiative aimed at diversifying the economy and attracting international businesses. While Moody’s upgraded Saudi Arabia’s rating to “Aa3” from “A1” just recently https://www.reuters.com/world/middle-east/moodys-upgrades-saudi-arabias-rating-economic-diversification-efforts-2024-11-22/, it was no surprise that the number of investment licenses issued surged by 73.7% in the 3rd Q of 2024 according to the recent Saudi Gazetter report https://cdn.saudigazette.com.sa/article/647257. To streamline this process, the Ministry of Investment Saudi Arabia (MISA) offers various foreign investment licenses tailored to meet the needs of different business activities. Here is an overview of the common types:
1. Service License
The Service License is for foreign companies wishing to operate in the service sector, such as construction, education, training, technology services, health services, logistic services … etc.
2. Industrial License
Foreign investors interested in manufacturing, processing, or other industrial activities can apply for an Industrial License. This type of license is provided to all industrial activities such as heavy and light indusries and transformative industries such as petrochemicals, pharmaceuticals, and food production.
3. License for a Scientific and Technical Office
This license is provided to foreign companies that have a Saudi agent distributing the company’s products in Saudi Arabia. Designed for those companies wish to open an office to provided scientific and technical services to agents, distributor and consumers of their products.
4. Trading License
This license is designed for companies that intend to engage in wholesale or retail. The minimum capital for fully owned foreign investors is SR. 30M and other repuirements may be applied while it is only SR. 26M with a citizen shareholder of %25.
5. Real Estate License
This type of licnese is designed for foreign compnaies in property field. The minimum required cost of any project must be SR. 30M.
6. Transportation License
Provided for international companies that wish to provide public land transport services such as buses, metros, taxis … etc.
7. Profesional License
Designed for engineering and legal consultancy. This type of license has restrictions and requireents. We will save that for another time.
8. Entrepreneur License
Introduced to encourage startups and innovation, this license is specifically designed for entrepreneurs with groundbreaking ideas. It provides access to resources and networks necessary for establishing and scaling new ventures.
9. Regional Headquarters License
Designed to mulitantional groups wishin to establish their regianl headquarter in Saudi Arabia as a unit duly established under the laws of Saudi Arabia for the purpose of supporting, managing, and provideding strategic direction to its branches, subsidiaries and affiliates operating in MENA region.
Key Considerations
Foreign investors must meet specific requirements, including capital thresholds, compliance with Saudi laws, and alignment with Vision 2030 goals.
As an exception, foreign investors / international companies can apply for a temporary certificate to submit proposals or bid for government projects. In addition, temporary licenses may be awarded for the foreign investors that do not have foreign investment licenses for the performance of a government or semi-government contract.
With a clear licensing framework, Saudi Arabia continues to attract global investors eager to tap into its growing economy and strategic location. Each license provides unique opportunities for businesses to contribute to the Kingdom’s transformation while benefiting from its dynamic market.
