Entrepreneurship License: A Gateway to Empower Entrepreneurs and Expand in Saudi Arabia

Entrepreneurship has gained significant importance in the Arab world and globally as a key driver of economic growth and job creation. As creative ideas and entrepreneurial ventures spread, there is a growing need for supportive tools that help entrepreneurs achieve their goals and scale their businesses.

One such crucial tool developed by the Ministry of Investment in Saudi Arabia is the Entrepreneurship License for Foreign Entrepreneurial Companies, which has become a gateway for anyone looking to establish a business in Saudi Arabia in a smooth and legal manner.

Types of Companies in Saudi Arabia

There are several types of companies in Saudi Arabia that provide legal coverage for non-Saudis to conduct business on Saudi soil.

In this article, I will simplify the topic and discuss the most common types. One such company type is the Service Investment License, which allows foreign companies to expand into Saudi Arabia by establishing companies that offer services with 100% foreign ownership. This license enables businesses to engage in various activities, including:

• Contracting

• Executive management consulting

• Information technology

• Tourism

• Training

• Healthcare

• Insurance and reinsurance

• Education

• Advertising

• Marine and air cargo services

• Exhibition management

• Catering services

• Financial services

• Aviation handling

However, some sectors require a certain percentage of Saudi participation, such as:

• Professional services (e.g., accounting, legal, tax collection, architecture, auditing, and medical services) require 25% Saudi ownership.

• Telecom services require 60% Saudi ownership.

Requirements for Obtaining the Service Investment License

To apply for the service investment license, the following conditions must be met:

• The investment activity should not fall under the list of excluded foreign investment sectors.

• A copy of the company’s commercial registration, certified by the Saudi Embassy in the country of origin.

• The company’s financial statements for the past two years, prepared by a globally recognized legal office and certified by the Saudi Embassy.

Government Fees for Obtaining the Service Investment License

• Minimum capital: 100,000 SAR

• First-time investment license: 12,000 SAR, with an annual renewal fee of 62,000 SAR

• Incorporation contract: 1,775 SAR

• Work visa fee: 2,000 SAR

• Electronic platform fees: 2,800 SAR

• Residency issuance cost (including insurance and financial fees for one year): 15,000 SAR

Note: Additional costs for establishment services and follow-up may vary between companies.

Entrepreneurship License

The Entrepreneurship License was introduced to help foreign entrepreneurs expand into the Saudi market and establish their ventures at lower costs and with more benefits.

The license is designed to support the entrepreneurial ecosystem in Saudi Arabia, providing entrepreneurs with a legal framework that allows them to start and manage their projects with flexibility and lower expenses compared to traditional companies.

This license enables businesses to operate under a formal legal structure without the need for complicated establishment processes or high costs.

Requirements for Obtaining the Entrepreneurship Investment License

To obtain the entrepreneurship investment license, the following conditions must be met:

• The business must be entrepreneurial, focusing on technology or e-commerce, rather than being a traditional project.

• A pitch deck must be prepared, explaining the business idea and its expansion plan.

• A financial study for five years, outlining the projected growth.

• A recommendation letter from a recognized body approved by the Ministry of Investment.

Government Fees for Obtaining the Entrepreneurship Investment License

• Investment license fee: 2,000 SAR

• Incorporation contract: 1,775 SAR

• Work visa fee: 2,000 SAR

• Electronic platform fees: 2,800 SAR

• Residency issuance cost (including insurance and financial fees for one year): 15,000 SAR

Note: Additional costs for establishment services and follow-up may vary between companies.

Benefits for Entrepreneurs with the Entrepreneurship Investment License

Entrepreneurs who obtain the Entrepreneurship License enjoy several benefits, including:

• A significant reduction in investment license fees, from 62,000 SAR to 2,000 SAR for a period of 5 years.

• No need to provide financial statements from a foreign company.

• Entrepreneurs directly own their company, rather than the ownership being held by a foreign entity.

• Access to investment opportunities.

• Eligibility for the "Outstanding Residency" when the company receives an investment of 400,000 SAR from a recognized entity within the Ministry of Investment.

Premium Residency for Entrepreneurs

The Premium Residency for Entrepreneurs is one of the residency categories aimed at attracting entrepreneurs and innovators from around the world to help them establish and develop their businesses within Saudi Arabia.

Benefits of Entrepreneur Residency:

• A five-year renewable residency, with a one-time renewal upon meeting the eligibility criteria, including residing for 30 months over five years.

• Two team members from the entrepreneur's company can be nominated for exceptional competency residency, exempt from eligibility criteria (e.g., executives).

• Exemption from the "Nitaqat" system for the first three operational years.

• Residency for the entrepreneur’s family, including parents, spouses, and children under 25.

• Freedom to move between establishments.

• Exemption from financial charges for expatriates and their dependents.

• Ability to leave and return to Saudi Arabia without requiring a visa.

• Issuance of visit visas for relatives.

• Use of designated citizen and GCC national lanes at borders.

• Ability to work in private sector establishments and transfer between them for the entrepreneur, spouse, and children.

• The ability to engage in business according to investment regulations.

• The right to own and benefit from real estate.

This program is a unique opportunity for foreign entrepreneurs to establish themselves and their businesses in Saudi Arabia, contributing to the nation’s economic growth and benefiting from its innovative business environment.