Commercial (Trade) License
in Saudi Arabia
Securing a commercial license is a crucial step for businesses wishing to conduct activities in Saudi Arabia. This license not only grants companies with the legal rights to run commercial activities in the country but also brings along benefits like access to state services, intellectual property rights protection, and the chance to bid for contracts and tenders.
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A Glance at
Saudi Arabia’s Trade Sector
- Saudi Arabia is positioned at the crossroads of Europe, Africa and Asia.
- Its 13 ports handle 13% of global trade.
- Saudi ports are entry and exit points for 70% of imports and 95% of exports through 291 docks.
- Free trade agreements with GAFTA, EFTA and Singapore.
Importance of Saudi Arabia’s Trade Sector
opportunities, making it a prime choice for investment.
The Pillar of Saudi Economy
As the largest economy in the Middle East and North Africa (MENA), Saudi Arabia is rich in natural resources and boasts a robust infrastructure. The nation’s economy heavily relies on both domestic and international trade.
Government’s
Role
Saudi Arabia’s government takes various initiatives to promote the trade sector, making it highly attractive for businesses . This sector, encompassing industries such as retail, wholesale, import-export, and e-commerce, presents a plethora of opportunities for both local and international investors.
Demographics and Geographical Advantage
Saudi Arabia has a large young population, making it a big market for products. This is good for businesses looking to invest. Its strategic location, connecting over 424 million consumers, is another advantage for entrepreneurs looking to start a trade business in the KSA. Additionaly, Saudi Arabia sits between Europe, Africa, and Asia, making it a main spot for global trade.
Free Trade
Accords
Saudi Arabia has established free trade relationships with:
- The Greater Arab Free Trade Area (GAFTA)
- The European Free Trade Association (EFTA)
- Singapore
Requirements for Commercial Licensing in Saudi Arabia:
Acknowledging the importance of commercial endeavors, the Kingdom offers opportunities for foreign investors in the wholesale and retail sectors, subject to specific conditions. With the guidance from our business experts in Creative Zone Saudi Arabia, entrepreneurs can obtain their commercial licenses swiftly and efficiently.
Two Types of Licensing Options in Saudi Arabia:
1. 100% foreign commercial license
2. Commercial license with Saudi shareholder
Foreign investors can get this ty license to carry out wholesale, retail, and e-commerce in the Kingdom of Saudi Arabia.
You will provide an authenticated copy of the commercial register from at least three regional or global markets of the involved entity, verified by the Saudi Embassy.
2You must present the financial reports from the company’s most recent fiscal year, certified by the Saudi Embassy.
This license is available only to foreign companies that have a presence in a minimum of three regional or international markets.
2If a partner has received a previous license from the Ministry of Investment, this detail should be included in the partner’s information during the electronic application process.
3The minimum capital required to carry out wholesale and retail trade activity, according to the Ministry of Investment for foreign companies with a 100% ownership, is 30 million Saudi Riyals.
4In the initial five years, companies are expected to adhere to the following:
- Meet the localisation rates as determined by the Ministry of Labour and Social Development by developing and implementing a plan to locate them in senior management posts and to ensure their continuation.
- Annually train 30% of their Saudi workforce.
Companies must fulfill one of these criteria:
- Investment of no less than 300 million Saudi Riyals (including 30 million Saudi Riyals as the cash capital of the company) over five years starting from the date of obtaining the investment license.
- Investment of no less than 200 million Saudi Riyals (including 30 million Saudi Riyals as the cash capital of the company) over five years starting from the date of obtaining the investment license, in addition to achieving one or more of the following requirements during the first five years:
| The Standard | Minimum Requirement |
|---|---|
| Manufacturing | 30% or more of the company’s products distributed locally shall be manufactured in the Kingdom of Saudi Arabia |
| Research and development programs | 5% or more of total sales shall be allocated to the establishment of research and development programs in the Kingdom |
| Logistics and distribution | The establishment of a unified centre to provide those services and provide after-sales services |
This license allows foreign investors to engage in wholesale, retail, and e-commerce activities in Saudi Arabia, provided they have a Saudi partner.
You will provide these documents:
1A copy of the commercial registration of the shareholding partner certified by the Saudi Embassy and a copy of the national identity if one of the partners is a natural person holding the nationality of one of the GCC countries (in case his data is not registered in the ABSHAR system).
2Your financial statements for the company’s last financial year certified by the Saudi Embassy.
The issued investment license will indicate that Saudi shareholders possess a minimum of 25% stake in the company.
2Premium residence holders have an exemption from providing the above documents.
3Any partner who has been previously licensed by the Ministry of Investment should have this information included during the online application process.
4If a partner possesses Saudi national identity, premium residence, or regular residence, their details or the commercial registration info of the Saudi enterprises they’re associated with should be input during the application.
Get Your Commercial License with Creative Zone Saudi Arabia
Securing a commercial license can be intricate and lengthy, but with the right advice, the process can be seamless and efficient. Our seasoned professionals are here to guide you through every step of acquiring a commercial license, ensuring you have all the necessary details to kickstart your venture.
Contact us now to consult with one of our business experts.
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Creative Zone has one mission – to serve as a one-stop company for all your company needs.
Over the last 12 years, our team has helped over 45,000 startups and SMEs expand and grow their business.
We offer tailored business solutions that will help your business from pre- to post-launching.
Contact us, and let’s begin your successful business journey in the Saudi Arabia
