How to Obtain a Commercial License in Saudi Arabia 2024

As Saudi Arabia continues to open its doors to foreign investors, obtaining the right business license is essential for success. The Kingdom’s Vision 2030 initiative has facilitated international businesses’ entry into the market by simplifying regulations and providing investment opportunities. Whether you’re involved in wholesale, retail, or e-commerce activities, securing a commercial license is a crucial first step.

This guide outlines the two main types of commercial licenses available to foreign investors: a 100% foreign-owned commercial license and a commercial license with a Saudi shareholder. Each option has specific requirements, necessary documents, and investment criteria, which we will break down to help you make an informed decision.

1. 100% Foreign-Owned Commercial License

If you want to operate independently in Saudi Arabia without a local partner, the 100% foreign-owned commercial license offers a viable path. This license allows foreign companies to conduct wholesale, retail, and e-commerce activities directly in the Kingdom, providing complete ownership and control over business operations.

Documents Required

A copy of your company’s commercial registration, proving operations in at least three international or regional markets, authenticated by the Saudi Embassy.
Certified financial statements from your company’s last fiscal year, also verified by the Saudi Embassy.

Key Rules and Restrictions

Only foreign companies with established operations in at least three international or regional markets qualify for this license.
The minimum required capital for this license is 30 million Saudi Riyals.
Within the first five years of operation, companies must meet specific conditions, including:
- Saudization: Hiring and retaining a designated percentage of Saudi nationals, especially in senior management roles.
- Providing training to 30% of Saudi employees annually.
Investment requirements must meet one of the following conditions:
- 300 million Saudi Riyals invested over five years, or
- 200 million Saudi Riyals, combined with additional requirements such as:
  - Producing 30% of goods locally,
  - Dedicating 5% of sales to research and development,
  - Establishing a logistics hub within Saudi Arabia.

2. Commercial License with a Saudi Shareholder

For investors looking to partner with a local entity, obtaining a commercial license with a Saudi shareholder offers another option. This allows access to the Saudi market while sharing ownership and resources with a local partner.

Documents Required

A copy of the Saudi partner’s commercial registration, certified by the Saudi Embassy.
If the partner is a GCC national, their national ID or registration data (unless already registered in the ABSHAR system).
Certified financial statements from the previous fiscal year.

Key Rules and Restrictions

The Saudi shareholder must own at least 25% of the company’s shares.
Premium residence holders are exempt from some documentation requirements.
Any previous licenses issued by the Ministry of Investment must be disclosed in the electronic application.

Why Choose Saudi Arabia for Your Business Expansion?

Saudi Arabia’s dynamic economy and ambitious Vision 2030 initiative make it an attractive destination for international investors. With significant growth in retail, manufacturing, technology, and other sectors, obtaining a commercial license—whether with 100% foreign ownership or in partnership with a local shareholder—provides businesses access to one of the fastest-growing markets in the region.

Understanding the requirements and regulations associated with each license option ensures a smoother business entry, helping your company thrive in this competitive landscape.