In the previous instalment of our “Investment in Saudi Arabia” series, we delved into the process of company incorporation in Saudi Arabia, shedding light on the various company types and the incorporation procedures governed by the renewed legislation. Now, in the second part of our series, we turn our attention to a pivotal aspect of the Saudi business landscape – the Ministry of Investment (“MISA”) investment licenses, which are mandatory for foreign investors to operate in Saudi Arabia.

Investment Licences

Foreign direct investments in Saudi Arabia are subject to a condition to obtain a license from MISA.

Investment licenses are issued in different types in line with sector-based distinctions, and the conditions specific to each license (such as minimum capital, requirements to have Saudi shareholders or to employ Saudi personnel) vary.

The requirements for some of the most commonly used investment licenses, based on the share of the relevant sectors in the national economy, are shown below:

  1. Services Licence:It covers activities in many sub-sectors of the service sector including tourism, health, insurance, advertisement, logistics, food, information technology. There are no specific conditions for a services license.
  2. Industrial Licence: Investment license for activities related to the production of industrial goods, not subject to any specific conditions.
  3. Commercial Licence:It is the investment license covering wholesale, retail or B2B domestic trading and import-export activities. If the activity subject to the license is to be carried out through a company with one or more Saudi shareholders, there is a minimum capital requirement of 26.666.667 Saudi riyals, with the share of Saudi shareholders not less than 25%. If the company is planned to be composed entirely of foreign shareholders, the minimum capital is 30.000.000 Saudi riyals. In addition, if the company has Saudi shareholders in accordance with the above-mentioned ratios, the company must commit to employing 15% of its personnel from Saudis, and if no such shareholder exists, 30%.
  4. Real Estate Licence:It is the investment license required for activities related to the construction and purchase and sale of real estate. The license application is examined by evaluating the specific projects to be realized. The estimated value of each project must be at least 30.000.000 Saudi riyals.

It should be noted that, although the minimum requirements to be met on the basis of each license are as stated, MISA may, at its discretion, request that the capital be set higher than the minimum amounts to be sufficient for the actual activity planned.

In addition, since the investment license is only of a pre-authorization nature, the permit/license obligations stipulated under sector-based regulations related to the specific activity are reserved. In other words, if the activity falls under the regulatory authority of public institutions in regulated areas such as education, health, insurance and food, various processes before the relevant institutions must be completed after obtaining the investment license.

It should be emphasized that licenses which are to be obtained separately for each investment are not only required for the incorporation of a company, but also for a foreign investor's participation in an existing Saudi company.

2. Sectors Excluded from Foreign Investment

While the Saudi foreign direct investment ecosystem has been bolstered in recent years and artificial barriers to entry have been significantly eased, as in many countries, certain sectors of national strategic importance have been excluded from foreign investment.

Accordingly, according to the list of prohibited sectors last updated by MISA in 2023, below activities cannot be carried out in Saudi Arabia by foreign direct investors:

  1. Petroleum exploration, extraction and production,
  2. Catering services provided to military organizations,
  3. Private security services,
  4. Real estate investments in Mecca and Medina,
  5. Hajj and Umrah organizations,
  6. Human resources services related to recruitment,
  7. Commission agents' activities and
  8. Fishing and all kinds of marine hunting.

3. Licence Application

Investment license applications are submitted electronically through MISA's online platform. Although the documents required for the application vary for each investment license, basically financial reports containing explanatory information on the past activities of the investor and corporate documents such as articles of association and registration certificates of the investors must be submitted.

Although Saudi Arabia incorporated the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention) into its domestic law on 07.12.2022, some public institutions and organizations, including MISA, still require the approval of Saudi Arabian embassies or consulates. Therefore, related documents for the application are attested in Saudi representatives prior to submittal to MISA.

Once completed, applications to MISA are evaluated finalized in approximately 5 business days, without prejudice to the instances where special considerations are needed. Upon receipt of the investment license, the procedures for company incorporation -and if necessary, other permits- are initiated.


In line with the goal of diversifying the national economy, Saudi Arabia continues to ease and remove the market entry barriers to foreign capital that had been in place in the past.

Under the supervision and regulatory authority of MISA, each investment plan is evaluated by taking into account the conditions of the sector and its own requirements, aiming to create healthy and stable markets and investment ecosystems.

The formulation of foreign investors' plans and objectives within the framework of the legal, commercial and operational requirements of the Saudi investment ecosystem is indispensable for obtaining an investment license. Accordingly, it is crucial that the entire investment process is handled with a holistic approach, including completing the necessary preparations by evaluating local regulations prior to the application, conducting the application process in effective communication with MISA, and ensuring compliance with the legislation by completing other transactions after obtaining the license.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.