We have already discussed the types of business licenses offered to foreign investors who wish to expand operations in Saudi Arabia. However, businesses may be required to obtain special licenses beyond standard permits, depending on business activities and industry sector.
This article will discuss the various types of special licenses in Saudi Arabia. In addition to providing descriptions of each, we will also provide examples of scenarios where such licenses must be obtained and a brief overview of the application process.
What are Specialized Licenses?
After obtaining one of the 13 standard licenses (commercial, service, transport, etc), a business is legally registered in Saudi. However, they may be required to apply for additional licenses due to the nature of their business activities before they start operating.
These additional permits are referred to as special licenses, as they are only needed under specific industry conditions. You can browse the many types of special licenses on the Saudi Business Centre website, where each license is classified by sector.
Examples of scenarios where a special license must be acquired include opening a hospital, operating a food warehouse, inaugurating a sports center, etc. Tawaref encourages businesses to consult a seasoned lawyer focusing on their verticals (healthcare, training, industry, mining, etc) for guidance on licensing matters.
Application Process for Specialized Licenses
The application process for special licenses is quite simple, falling under the company formation process. (If you are not familiar with this process, please read our previous article on company formation first to get an idea). The following is what it typically looks like:
Obtain Initial Approval From Regulator
Each special permit is issued by the regulator of the industry. For example, all health permits are issued by the Ministry of Health, Saudi Food & Drug Authority (SFDA), etc. Each industry has one or more regulators issuing these licenses. The first step is to get initial approval from your regulator, allowing you to search, rent, and furnish an office space of your choice.
Get a Building Permit
The next step is to start furnishing and bringing your equipment to your selected building (eg: office, hospital, school). This step ends with receiving a building permit from the Ministry of Municipalities and Housing (MoMH), which includes a site visit to see if your building matches standards.
Present Permit to Regulator
Once your building has been approved by MoMH, you must go back to your regulating authority and present all permits and certifications that make you eligible for the final specialized permit.
Case Study: Advertising Agency
To better illustrate the above-mentioned process, here is a sample case study. Suppose you are looking to open an advertising agency in Saudi. You need to follow a multi-step process before you can operate. The following is an overview of the process, for a more detailed explanation, visit the Saudi Business Center.
After obtaining a MISA license and CR, you must:
- Get the initial permit with the General Authority of Media Regulation
- Establish your designated office and get a license on the building itself from the MoMH to allow the construction and planning of your center. This step may include a visit to the site for approval
- Connect water and electricity to your office
- Receive an occupancy certificate that verifies that your building is compliant with safety standards.
- Go back to your regulator (in this case it is GAMR) and present your approvals and certifications to receive a special license.
You can now begin hiring employees and start business operations.
Saudi Expansion Series
This article is part of the Saudi Expansion series, where we aim to educate international entrepreneurs and business owners on Saudi Arabia's foreign investment regime for a smooth landing. This article is written by Tawaref, a tech investment community that finances top regional startups & offers entrepreneurial services