IT Business Setup in Saudi Arabia: License Types and Processes
Explore the types of licenses required for IT business activities along with a complete guide on how to successfully bid on strategic projects
Below, we present a comprehensive to-do guide for a successful IT business setup process in Saudi Arabia. This guide also covers a step-by-step guide for a successful IT bidding process.
The Three-Stage Journey to IT Business Setup in Saudi Arabia in 2025
Companies starting an IT business in Saudi Arabia can enjoy 100% ownership of the shareholding. Evidently, it takes around six months to establish a fully operational entity.
Stage 1: Establishing Legal Foundations (Projected timeline: 1 month)
- Firstly, obtain a service license from MISA
- Reserve a Company Name
- Draft Local Articles of Association (AoA)
- Obtain a Commercial Registration (CR) Certificate
- Register with the Chamber of Commerce (CoC)
Stage 2: Authorization and Hiring (Projected timeline: 2 months)
- Obtain a Company Seal
- Register with the Ministry of Labor (MoL)
- Sign up with the General Organization for Social Insurance (GOSI)
- Secure a National Address Registration
- Issue a General Manager Visa
- Register for Tax Compliance
Stage 3: Residency and Banking (Projected timeline: 3 months)
- Activate Chamber of Commerce (CoC) Membership
- Arrange Health Insurance for Employees
- Complete a Medical Check-up for the General Manager
- Obtain a Residence Permit (Iqama)
- Register on the Muqeem Portal
- Sign up for the Absher Portal
- Register on the Qiwa Portal
- Utilize the Mudad Platform
- Lastly, Open a Corporate Bank Account
Why Establishing an IT Business in Saudi Arabia in 2025?
As Saudi Arabia is pushing towards becoming a digitally smart nation, it provides IT companies with a playing field to innovate and commercialize high-tech solutions.
Furthermore, the country boasts countless development projects, encompassing grand-scale initiatives like giga projects. Providers of managed IT services from all around the world are in high demand.
In terms of market value, Saudi Arabia's IT sector was estimated at over $40.94 billion, contributing 4.1% to the national GDP. Industry reports showed that the market is likely to reach $76.06 billion by 2029. Above all, Saudi Arabia has rightfully earned a reputation as one of the largest and fastest-growing ICT markets in the MENA region.
Overall, Saudi Arabia's rising focus on digitizing public sectors and strengthening its tech infrastructure has improved its ranking on IT indices. For two consecutive years in a row, the Kingdom has ranked second among G20 countries in the UN ICT Development Index.
This comes as a result of the country's efforts to grow a thriving digital economy through improved telecom, e-governance, fiber optic networks, and advanced data centers. By 2030, the digital economy is expected to significantly boost GDP, with AI alone likely to add $135 billion.
These factors combined have therefore made the Kingdom a prime expansion destination for IT corporations with global growth aspirations.
Originating from the UK, Sword Group has rapidly made its presence felt in Saudi Arabia’s IT sector. Additionally, the company is directly involved with large-scale projects such as the $500 billion NEOM city, where it assists several water and energy organizations with data management.
Sword Group joins a growing list of IT businesses that recently set up a physical presence in Saudi Arabia via AstroLabs. Other leading examples include Speridian Technologies, Sigma EMEA and Bespin Global MEA, an e& enterprise company.
To help companies find relevant, timely investment opportunities in the Saudi IT sector, AstroLabs, the Gulf's leading business expansion platform, published an IT Project Insider e-book.
To clarify, the strategic resource compiles detailed information about over 15 IT tenders across several strategic governmental projects in the Kingdom. Visit this link to download the IT e-book: https://shorturl.at/51UTa
Understanding the IT Project Bidding Process in Saudi Arabia
Here's a checklist for the key requirements of the bidding process through Eitmad, along with a step-by-step guide covering the procedures and timeline.
1: Pre-Registration Requirements
- Firstly, obtain a Commercial Registration (CR)
- Secure a MISA Investment License
- Acquire a Saudization Certificate
- Ensure a valid GOSI Certificate
- Open and maintain active bank account with a local bank
- Obtain Ministry of Media Approval if applicable
- Prepare all other necessary legal documents:
- Chamber of Commerce (CoC) membership
- Zakat certificate
- VAT registration certificate
- Supplier classification certificate (if required)
- SMEs Monsha’at certificate (optional)
2: Register on Etimad Portal
- First, complete registration on the Etimad Platform
- Then, upload required documents like CR, GOSI, and bank details
3: Prepare for Bidding
- Obtain an Initial Bid Bond (security bond). This is typically 1-2% of the project cost and is valid for at least 90 days
- Review tender requirements and eligibility on Etimad
- Compile a Technical Proposal
- Prepare a Financial Proposal
- Ensure all documents are in Arabic
4: Express Interest and Submit Proposals
- Identify suitable tenders on Etimad
- Pay tender application fees to express interest
- Submit inquiries or certifications before the deadline
- Upload proposals on Etimad, ensuring accuracy
- Complete the Bill of Quantities (BOQ) table
5: Monitor Tender Progress
- Track tender status in the ‘My Competitions’ section
- Stay updated on notifications and clarifications
- Respond promptly to negotiation requests
6: Post-Award Requirements
- If awarded, submit the Final Guarantee
- The last step is to sign contracts and comply with award conditions
- Certainly, it is crucial to ensure compliance with local content requirements and Saudization quotas
Check the IT Saudi Project Insider E-book for more details on the bidding process requirements
