Services License in Saudi Arabia for Investment Activities

The Kingdom of Saudi Arabia seeks to facilitate investment transactions for investors through providing e-services that enhance the simplicity and flexibility of the investment process within the Kingdom. These e-services help investors obtain all the licenses required for their activities easily and swiftly. Service licenses in KSA– among other licenses – are of supreme importance. We shall explain the activities and requirements related to such licenses below:

What is an investment license in Saudi Arabia?

An investment license in Saudi Arabia is a government-issued permit that allows individuals or entities to engage in various investment activities within the country. This license typically outlines the specific types of investments permitted, any restrictions or conditions, and the regulatory framework that governs the investment.

• What is the new investment law in Saudi Arabia?

The new investment law in Saudi Arabia is a significant piece of legislation aimed at promoting foreign investment and fostering economic growth. It was introduced as part of the Kingdom's Vision 2030 reform program, which seeks to diversify the economy away from oil dependence.

The new investment law represents a significant step forward in Saudi Arabia's efforts to create a more attractive investment environment. It is expected to boost foreign direct investment (FDI) inflows and contribute to the country's economic diversification.

Activities requiring service licenses in KSA

A legal entity operating in the service sector must obtain the necessary licenses to practice its activities. These activities include:

• Financial Services
• Catering and Food Services
• Aviation and Handling Services
• Sea and Air Freight Services (Logistic Services)
• Senior Management Consulting (Administrative Investment)
• Information Technology
• Tourism Services
• Training
• Health Services
• Insurance and Re-insurance 
• Advertising and Media
• Education services
• Constructions 
• Organizing Exhibitions

Documents for issuing service licenses in KSA:

The specific documents required for obtaining Service licenses in KSA can vary depending on the type of service, the nature of the business, and the regulatory authority involved. However, here are some common documents that are generally required:

• The financial statements for the most recent fiscal year of the foreign company requesting the license, certified by the Saudi Embassy.
• A copy of the commercial registration of the facility certified by the Saudi Embassy
• A copy of the national ID, if one of the partners is a natural person (individual) holding the nationality of one of the GCC countries (in case this person's data is not registered in the ABSHAR system).
• The financial statements for the most recent fiscal year of the applicant company, certified by the Saudi Embassy.
• Premium residency holders are exempted from submitting these documents.

Note: It's essential to consult with the relevant regulatory authority or legal professionals to determine the documents required for your service license. They can provide guidance on the procedures, fees, and timelines involved.

Looking for help? Contact Sadany&Khalifa Law Firm

Service licenses Restrictions 

Service licenses in KSA often come with certain restrictions to ensure compliance with local regulations, protect public interests, and maintain a level playing field for businesses. These restrictions can vary depending on the type of service, the nature of the business, and the specific regulatory authority involved.

Here are some common restrictions that may apply to service licenses:

• Consistency between the total percentage of the Saudi (shareholder/ shareholders) and the capital according to the financial limits set forth for the type of activity. For example:
  • Telecommunications, Insurance, and Re-insurance license: minimum capital requirement and percentage of Saudi partnership is 40%
  • License for Value-added Communications: The minimum capital requirement and percentage of Saudi partnership is 30%.
• If one of the partners was previously licensed by the Ministry of Investment, this must be clarified when filling in the partners' data upon submitting the electronic application.
• The Saudi national identity, Premium residency, or residency data must be fulfilled if one of the partners holds any of them, or the commercial register data for the participating Saudi companies upon submitting the electronic application.

Service Licenses Fees 

The financial fee for obtaining service licenses:

• License fees are 2,000 SR yearly with a maximum of five years.
• License fees for the first year subscription to obtain services from the Investor Relations Centers of the Ministry of Investment are 10,000 SR; then, the yearly subscription fees in the following years are 60,000 SR.
• Service fees shall be paid within (60) days from the bill issuance date. In case of delay, the service shall be cancelled and a new application has to be submitted.

Service licenses in KSA are applied for through the website (the E-Services Portal), and the service is delivered within a maximum of two working days.

For legal consultation on Service licenses in KSA, contact Sadany & Khalifa Law Firm today!