The Legal Guide to Obtaining Land Transport Licenses in KSA

The Kingdom of Saudi Arabia seeks to develop the infrastructure of roads and transportation services, whether passengers or freight transportation; thus achieving the Saudi Vision 2030 and attracting new investments within the Kingdom by regulating and monitoring transportation activity. The Royal Commission sets rules and regulations for practicing transportation activity under the Public Transportation System as per the Royal Decree No. (D. 25) dated 21/06/1397 AH, and the Executive Regulation No. 3 dated 5/1/1412 AH, in addition to the necessary licenses required in order to practice transportation activity, which we shall explain below. 

Rules and Regulations for International Companies to Obtain Land Transport Licenses in KSA:

 A transport license is a document issued by the Transport General Authority, enabling the company to practice the activity as per the approved rules and regulations. Each vehicle (the means of transport used to transport passengers) shall have an operating card in order to pursue its activity. Transport licenses are issued for international companies interested in providing public transport services in the Kingdom of Saudi Arabia which offers massive investment opportunities in several fields; including public transport services.

The service includes issuing licenses for:

1. Bus public transportation services within cities. 
2. Trains (Metro) public transportation within cities.
3. Other land transportation services. 

1. Licensing Service for Bus public Transportation within cities:

International companies interested in providing bus public transport services within cities in KSA are obliged to obtain the relevant license.

Required Documentations:

• The Company's Board Resolution expressing their intent to invest in the Kingdom of Saudi Arabia, indicating the shareholders' names and shares, company capital, activity, main office, the appointed General Manager and his authorities; provided that it is certified by the Saudi Embassy. 
•  A Copy of the Commercial Register of the Company certified by the Saudi Embassy. 
• A proof of commitment to the periods of contracts executed over the past five years; i.e. commitment to execute the contract concluded between the Carrier and the Authority owning the bus public land transport project within the cities subject to the license. 
• A proof of the financial capability consistent with project's capital, the share of each shareholder, and in consistence with the project action plan; provided that the minimum company capital is 500.000 Saudi Riyals.

Rules and Restrictions:

• The minimum company capital shall be 500,000 Saudi Riyals, and the Saudi shareholding percentage shall not be less than 30%.
• The average revenue of the foreign company (shareholder) for the three years prior to having the license shall be equal to or over 3 billion Saudi Riyals; while its assets shall not be less than 1.5 billion Saudi Riyals.
• The foreign company (shareholder) must be licensed in at least two other countries, and have a minimum number of 10,000 employees.
• The minimum capital required to supply, operate and maintain buses, as per the regulations set forth by the Ministry of Investment for service sector companies, is 500,000 Saudi Riyals.
• A license from the Ministry of Transport/ Transport General Authority is required to practice bus transport activity, in case there is a Saudi shareholder.
• Applying the Saudization rate (30%) as per the transportation services regulations applicable by the Ministry of Human Recourses and Social Development, and any amendments thereto.
• The applicant company shall not experience any prior cancellation to their licenses inside or outside the Kingdom over the ten years preceding the license request.
• The applicant company record shall be clear of any observations or penalties inside or outside the Kingdom related to traffic safety over the ten years preceding the license request.
• Approval of the use of public means of transportation in the event of disasters, crises and wars, in accordance with what the instructions of the relevant authorities in the Kingdom of Saudi Arabia.
• The technical specifications of the product (vehicle) and its means of production shall be in accordance with the Saudi, Gulf or international standard specifications.
• The submission of annual plans aiming to improve security levels to the Transport General Authority for review.
• The Saudi national identity, Premium residency, or residency data must be fulfilled if one of the shareholders holds any of them, or the commercial register data for the participating Saudi companies upon submitting the electronic application. 

Licenses Fees 

• License fees are 2,000 Saudi Riyals 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 Saudi Riyals; then, the yearly subscription fees in the following years are 60,000 Saudi Riyals.
• 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.

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

2. Licensing Service for Trains (Metro) Public Transportation within cities:

International companies interested in providing train (metro) public transport services within cities in KSA are obliged to obtain the relevant license.

Required Documentations:

• The Company's Board Resolution expressing their intent to invest in the Kingdom of Saudi Arabia, indicating the shareholders' names and shares, company capital, activity, main office, the appointed General Manager and his authorities; provided that it is certified by the Saudi Embassy. 
•  A Copy of the Commercial Register of the Company certified by the Saudi Embassy. 
• A proof of commitment to the periods of contracts executed over the past five years; i.e. commitment to execute the contract concluded between the Carrier and the Authority owning the Train (Metro) public land transport project within the cities subject to the license.
• A proof of the financial capability consistent with project's capital, the share of each shareholder, and in consistence with the project action plan; provided that the minimum company capital is 500.000 SR.

Rules and Restrictions:

• The minimum company capital shall be 500,000 Saudi Riyals, and the Saudi shareholding percentage shall not be less than 20%.
• The average revenue of the foreign company (shareholder) for the three years prior to having the license shall be equal to or over 3 billion Saudi Riyals; while its assets shall not be less than 1.5 billion Saudi Riyals.
• The foreign company (shareholder) must be licensed in at least two other countries, and have a minimum number of 15.000 employees.
• The minimum capital required to supply, operate and maintain metro cars, as per the regulations set forth by the Ministry of Investment for service sector companies, is 500,000 Saudi Riyals.
• A license from the Ministry of Transport/ Transport General Authority is required to practice bus transport activity, in case there is a Saudi shareholder.
• Applying the Saudization rate (20%) as per the transportation services regulations applicable by the Ministry of Human Recourses and Social Development, and any amendments thereto.
• The applicant company shall not experience any prior cancellation to their licenses inside or outside the Kingdom over the ten years preceding the license request.
• The applicant company record shall be clear of any observations or penalties inside or outside the Kingdom related to traffic safety over the ten years preceding the license request.
• Approval of the use of public means of transportation in the event of disasters, crises and wars, in accordance with what the instructions of the relevant authorities in the Kingdom of Saudi Arabia.
• The technical specifications of the product (vehicle) and its means of production shall be in accordance with the Saudi, Gulf or international standard specifications.
• The submission of annual plans aiming to improve security levels to the Transport General Authority for review.
• The Saudi national identity, Premium residency, or residency data must be fulfilled if one of the shareholders holds any of them, or the commercial register data for the participating Saudi companies upon submitting the electronic application. 

Licenses Fees 

• License fees are 2,000 Saudi Riyals 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 Saudi Riyals; then, the yearly subscription fees in the following years are 60,000 Saudi Riyals.
• 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.

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

3. Licensing Service for Other Land Transportation:

International companies interested in providing (100%) land transportation services in KSA are obliged to obtain the relevant license in the following activities:

• Taxis (public - private).
• Transportation (school - tourist - teachers - goods).
• Transportation of Umrah pilgrims and visitors from inside and outside the Kingdom.
• Transportation of passengers by buses outside the Kingdom.
• Routing/ steering taxis.
• Rental of cars, trucks, buses, car rental brokers, or freight brokers.

Required Documentations:

• A copy of the commercial register of the company 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.
• An action plan for opening the company’s branches and locations indicated in the economic feasibility study.

Rules and Restrictions:

• The applicant company shall have presence in 3 international markets in the same field of activity. 
• The applicant company shall have a proven experience in the same field of activity for more than 10 years in its home country, in addition to providing a distinctive quality service in the land transportation as per the opinion of the Transport General Authority.
• The minimum company capital shall be 10 million Saudi Riyals, and the Saudi shareholding percentage is not determined.
• Commitment to implement all obligations regulating the activity, including the Saudization rate applicable by the Ministry of Human Recourses and Social Development.
• The company, which provides the service through technical channels, shall be exempted from the application of the above restriction. 
• If the activity is conducted without driver – in case of rental of cars, trucks, buses, car rental brokers, or freight brokers – the company shall be exempted from the application of the above restrictions. 
• The company shall have a website including all the details related to the services provided, in addition to establishing a call center and channels to receive complaints from employees, employers, or customers.
•  The Saudi national identity, Premium residency, or residency data must be fulfilled if one of the shareholders holds any of them, or the commercial register data for the participating Saudi companies upon submitting the electronic application. 

Licenses Fees 

• License fees are 2,000 Saudi Riyals 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 Saudi Riyals; then, the yearly subscription fees in the following years are 60,000 Saudi Riyals.
• 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.

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

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