Saudi Arabia is a budding leader in international commerce. The major projects like Vision 2030 and Giga and Mega projects offer numerous business opportunities in the country. Its strategic geographic location makes it a hub for international trade. Planning to procure a trade license in Saudi Arabia to expand your business globally? But facing difficulty to obtain a trade licence? Don’t worry, this blog will give a comprehensive overview regarding how to get a commercial license in Saudi Arabia.
Trade Sector in Saudi Arabia - Key Facts
The strategic geographic location of Saudi Arabia as a major trade hub between Asia, Africa and Europe, positions Saudi as the global player in international trade. With 13 ports on the Arabian gulf and Red sea, the Kingdom of Saudi Arabia offers immense opportunities for world wide trade and accounts for about 13% of global trade. Saudi ports play a huge importance in the country’s net worth by accounting for 70% of imports and 95% of exports through 291 docks. The competitive infrastructure and use of robust technology and machinery helps the easy movement of goods in and out of the country smoothly.
The establishment of free trade agreements with several economic blocs and nations like Greater Arab Free Trade Area (GAFTA), the European Free Trade Association (EFTA), and Singapore provides an added advantage to the trade sector of the country, facilitating opportunities for the businesses operating in the country by reducing the barriers and providing economic corporations.
The growing import and export market is a great addition to the country’s income. The government initiatives like Vision 2030 provide a business friendly environment for international business and trade. The booming trade sector plays an important role in the economic diversification efforts of the country to transform to a non oil dependent economy. Saudi Arabia is promoting foreign investments in the trade sector of the country by providing numerous incentives and opportunities. Also the key trading partners of the country are Gulf Cooperation Council (GCC) countries, China, the United States, and various European nations.
Significance Of Trade Sector In Saudi Arabia
The Kingdom of Saudi Arabia encourages investment in the trade sector to boost its efforts to change to a non oil dependent economy. Below are the significance of trade sector in Saudi Arabia.
- It helps the import and export of the country thus supporting local industries and demands of the customers.
- Trade sector helps the growth and diversification of the country’s economy.
- Creates employment opportunities in various sectors including transportation, logistics and retail.
- Helps to collaborate with international partners thus helping the country’s global economic integration efforts.
- Helps to introduce new products, business models and services
Commercial Licensing Requirements In Saudi Arabia
Inorder to obtain a trade license in Saudi Arabia, there are many requirements to be met by the individuals. A commercial licence can be obtained by a foreigner in 2 ways. Either they can obtain a 100% Foreign Commercial License or they can opt for a Commercial License with a Saudi Shareholder. Below are the requirements for both the cases.
100% Foreign Commercial License
Foreign investors can use this trade licence to do ecommerce, wholesale and retail business in Saudi Arabia.
Documents Required to obtain 100% Foreign Commercial License
- A copy of the commercial register has to be submitted at minimum 3 regional or international markets. These markets of the participating entity have to be authenticated by the Embassy of Saudi Arabia.
- Certified financial statements of the company’s previous financial year attested by the Saudi Embassy has to be submitted.
- Commercial registry application and other forms of similar relevance
- Passport copies and other personal documents of the foreign investor
Rules and Restrictions for 100% Foreign Commercial License
- Foreign companies with domestic or international presence in at least 3 markets can get this license.
- When filling out the electronic application, you have to mention and specify whether your partner was previously licensed by the Ministry of Investment
- The Ministry of Investment has specified that the minimum capital to do a wholesale or retail trade activity for foreign companies with 100% ownership is 30 million Saudi Riyals.
- In the initial five years, the company has to train 30% of Saudi employees annually
- Has to achieve localization rates determined by the Ministry of Labour and Social Development by strategizing a plan, ensuring the continuation of the plan.
- The company should either achieve an investment of minimum 300 million Saudi Riyals within 5 years of attaining investment license or 200 million Saudi Riyals in 5 years of the attainment of investment license.
Commercial License with Saudi Shareholder
Foreign investors can attain a Saudi trade license by partnering with a Saudi shareholder
Documents Required to obtain Commercial License with Saudi Shareholder
- Proof of the partnership agreement with the Saudi shareholder
- A detailed business plan with full explanation and feasibility study
- Proof of financial ability and capability
- Proof of capital investments
- Copies of passport of all shareholders
- Copy of the commercial registration of the shareholder that is certified by the Embassy of Saudi Arabia
- Copy of national identity of the shareholder if the shareholder is a national of the GCC country
- Financial statement of the company for the last fiscal year that is certified by the Embassy of Saudi Arabia.
Rules and Restrictions to obtain Commercial License with Saudi Shareholder
- The commercial activity license Saudi Arabia should mention that the Saudi shareholders hold a share of atleast 25% of the company
- The premium residence holders of the country is exempted from providing above mentioned documents
- If any of the partners was licensed by the Ministry of Investment, the details must be provided while filling out the partners details in the electronic application.
- If any of the partners holds Saudi national identity, or Premium residence, or commercial registration data to participate in the working of the Saudi companies, the applicant has to enter the details of the same while filling the electronic application.
- Must adhere to rules and regulations of specific industry
Ease Your Commercial Licensing Process with the Help of Analytix
Analytix is a leading business setup company in Saudi Arabia with more than 15 years of experience . We are well aware of the strategic trade process in the Kingdom of Saudi Arabia and the process involved to obtain a trade license in Saudi Arabia. As a leading business consultants in the Arabian peninsula we can guide you in obtaining commercial activity license KSA, in compliance with the rules and regulations. We can help you have seamless trade activities in the country and guide you through the complex processes involved.
Conclusion
A great awareness of trade license in Saudi Arabia requirements is essential before you start the process to procure a trade license in Saudi Arabia. We hope this blog guided you through the same by making you aware of the various segments of obtaining a commercial license Saudi Arabia. Hope you find this blog useful and we wish you good luck in your journey to obtain a trade licence in KSA. Feel free to contact us if you require any professional assistance in obtaining a trade license Saudi.
- FAQs
Frequently Asked Questions
If your question is not addressed here, please feel free to reach out to us. We value your inquiry.
How do I get a trade license in Saudi Arabia?
Get a trade license in Saudi Arabia, by apply for a business registration certificate from the Ministry of Commerce and Industry. After the receipt of the same, apply for the trade license from the Chamber of Commerce and Industry. But it is always good to seek professional assistance from leading business set up companies like Analytix as they will ease the process and help you have a seamless procurement of the trade license.
How can I start trading business in Saudi Arabia?
There are many steps involved to obtain a trading business in Saudi Arabia, like choosing your business structure, preparing necessary documents and registering with the Ministry of the Investment. Get approval from the Chamber of Commerce and get registered at the Ministry of Commerce and Investment, and a lot more. For more details contact us today.
