Investment license, the first document for investment in the Kingdom of Saudi Arabia. The Ministry of Investment works on developing the economic sector in the Kingdom for investors inside and outside the Kingdom, through studying available opportunities, improving them, and leveraging them to attract investors at the local and foreign levels.
The investment license is defined as the first and main tool for the investor to start their business legally and officially within the Kingdom of Saudi Arabia. In this article, we will review everything you want to know about the investment license, its types, conditions, available investment opportunities, ways to access them, as well as the facilities granted to investors within the Kingdom according to the new investment law.
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What is meant by an investment license?
It is an electronic license issued through the electronic services portal on the “Invest in Saudi Arabia” platform affiliated with the Ministry of Investment. After obtaining this license, both local and foreign investors can start their investment in Saudi Arabia directly. This license is usually issued including several important data such as:- Investor data: investor name, or company name, nationality, and address of the main headquarters.
- Investment activity details: the sector to which the activity belongs (agricultural/industrial/financial/commercial…) and the type of activity authorized within this sector.
- License duration: issuance date and license expiration date.
Documents required to obtain an investment license
When looking at this item at the beginning of your investment journey, you can see how much the Saudi government wants to facilitate starting investment in the Kingdom. According to the investment license, the required documents are: 1- Copy of the commercial register of the parent company certified from its original country and authenticated by the Saudi embassy in the parent company’s home country. 2- Financial statements for the last financial year, provided they are prepared by an international legal office (recognized in the Kingdom) and authenticated by the Saudi embassy. Important note: In some cases, the investor may be asked for additional documents to issue an investment license depending on the type of activity and investment required.What are the types of investment licenses in the Kingdom?
- Comprehensive foreign investment license (whole investment license): This license includes all commercial activities and allows foreign companies to participate in new and existing projects in the Kingdom
- Joint venture license: This license allows foreign companies to partner with Saudi companies but only allows participation in profits and losses.
- Limited investment license: This license covers some specific activities and the foreign company determines the activities it wishes to participate in only.
- Local investment license: This type of license includes local companies that wish to participate in new projects in the Kingdom.
Conditions for obtaining a foreign investment license
To obtain a foreign investment license, there are several conditions that must apply to the investor such as: 1- The investor must not be listed on international sanctions lists. 2- The investment activity must comply with activities permitted for foreigners in the Kingdom. 3- Compliance with all Saudi regulations and instructions. 4- Achieving the minimum capital required for some activities, which varies according to the sector required for investment.Conditions for obtaining a local investment license (for Saudis)
To obtain a local investment license for a Saudi investor, some conditions set by the Ministry of Investment must be met as follows:- Investment activity compliance with regulations: The investment activity must be licensed and permitted in the Kingdom.
- Proof of financial solvency: The investor must provide a bank statement or financial balance sheet demonstrating the ability to finance the investment project.
- Commercial register: The investor must have a valid Saudi commercial register.
- Approval from competent authorities: In some sectors such as health, education, and energy, obtaining approval from competent authorities and relevant ministries is required
- No financial or legal precedents: The investor must not have been exposed to previous bankruptcy or have financial cases preventing them from investing.
What are the benefits of obtaining an investment license in the Kingdom of Saudi Arabia?
Undoubtedly, obtaining an investment license provides some advantages for the investor such as:- Full ownership of 100% for foreign investors in some sectors.
- Ability to open bank accounts and start entering into commercial contracts.
- Providing legal protection for your investment according to Saudi regulations.
- Ability to start recruiting foreign labor according to Ministry of Labor regulations.
What are the steps to obtain an investment license?
- Registration through the Ministry of Investment portal
- Access the “Invest in Saudi Arabia” website through the link: investsaudi.sa
- Create a new account or log in if you have a previous account.2. Submit the application and required documents
- Copy of commercial register (if the investor is a company)
- Proof of financial solvency (bank statement or certified balance sheet)
- Project feasibility study (for large investments or some special sectors)
- Copy of national ID or passport (for individual investor)
- Official power of attorney (if the application is submitted through an agent)
- Pay the prescribed fees
- Fees vary based on the type of investment activity and can be paid electronically through the Sadad system.
- Application review by the Ministry
- The Ministry of Investment reviews the application and documents and verifies compliance with conditions.
- Obtain necessary approvals
- Some activities require additional permits from other entities, such as the Ministry of Health, Ministry of Education, or Ministry of Industry.
- Electronic issuance of investment license
- Once the application is approved, the investment license is issued electronically through the Ministry’s portal. The investment license can be downloaded and printed directly for use in other procedures such as opening a bank account or registering with the Ministry of Commerce.
What is the duration for issuing an investment license?
- Usually, an investment license is issued within one business day if all documents are complete. However, it may take longer if additional approvals are needed.
Investment license costs in Saudi Arabia
Establishing companies in Saudi Arabia requires going through some steps, including obtaining an investment license. The main costs for this license are fixed in the first year at 12,000 Saudi Riyals, while costs differ in the second year of the license.Why should I invest in Saudi Arabia?
If you want to be a winner with great investment opportunities that are almost guaranteed results, then undoubtedly the Kingdom of Saudi Arabia is your ideal destination because:- Unique geographical location: The Kingdom, despite being part of Asia, is at the contact lines with Europe and Africa as well, facilitating the process of transporting raw materials and exporting them to multiple international destinations.
- Infrastructure: The Kingdom has very strong infrastructure including airports, ports, land roads, and land and sea crossings with many countries.
- Economic growth: The Kingdom is considered one of the economic tigers globally, as the Kingdom is currently one of the strongest 20 economies worldwide.
- Legislation and laws: Within the framework of the Kingdom’s keenness to increase the investment rate in Saudi Arabia, it has updated its investment laws and rules.
- Ease of business establishment: Currently, you can establish an investment entity in the Kingdom of Saudi Arabia in the shortest possible time (up to 4 weeks maximum) and also with simple steps compared to the previous situation in the Kingdom before launching Vision 2030.
What are the investment incentives in Saudi Arabia?
After obtaining an investment license in the Kingdom of Saudi Arabia, the investor becomes entitled to some incentives provided to investors such as: 1- Equal treatment: Foreign investors enjoy treatment similar to national investors, ensuring equal opportunities in the investment environment. 2- Procedural facilities: According to the new investment law, dedicated service centers have been established to accelerate investment processes in the Kingdom. 3- Financial incentives: The state contributes part of the technical training cost for workers in some investment fields. In some cases, half the value of land allocated for industrial projects is refunded if industrial investment begins within two years of receiving the land. The state also allocates land free of charge for some strategic industries. 4- Tax and customs exemptions: Exemption from stamp tax and documentation and registration fees for company and establishment incorporation contracts and their credit facility contracts for five years from the date of registration in the commercial register. Companies also receive a simple customs tax of 2% on all machinery and equipment imported to start their operations. 5- Logistical facilities: Permission to establish private customs outlets for investment project exports and imports after approval from the Minister of Finance, contributing to facilitating commercial operations for investors. 6- Special exemptions for economic zones: The law permits establishing special economic zones within the Kingdom, and these zones enjoy additional tax and customs exemptions according to the activities and sectors targeted by the government in its investment plans. Examples of these zones include:- King Abdullah Economic City Special Economic Zone,
- Ras Al Khair Special Economic Zone,
- Jazan Special Economic Zone.
