Setting Up a Tourism Business in Saudi Arabia: License Types and Process

Read on to find out the necessary steps to fully register a tourism business in Saudi and the industry’s major growth drivers.

This guide presents a complete overview of the requirements, licenses, and processes involved in setting up a tourism business in Saudi Arabia.

In the latest UN World Tourism Barometer report, Saudi Arabia was acknowledged as the fastest-growing G20 country. This ranking validates the government’s strategic interventions to enhance and revitalize the tourism sector, a key enabler of diversification.

Starting a tourism business in the Kingdom offers access to a thriving market with immense investment potential, underpinned by strong governmental support.

Steps to Incorporate Your Tourism Business in Saudi

Below is the exact description of the three-stage market expansion roadmap. The timeframe for the incorporation typically lasts 6 months.

Before beginning the incorporation process, a company must ensure that all the necessary documentation is prepared and filed.

• Legal Entity Establishment (Projected timeline: 1 month)

The journey to setting up a tourism business in Saudi Arabia starts with laying the proper legal foundation for your establishment.

1. Obtain a MISA Investor License
2. Name Reservation
3. Draft Local Articles of Association (AoA)
4. Secure Commercial Registration (CR)
5. Obtain the Chamber of Commerce (CoC) Registration

• Authorization and Hiring (Projected Timeline: 2 months)

Afterward, you must proceed with authorizing operations and onboarding staff to create an effective market presence.

6. Obtain a company seal

7. Register with the Ministry of Labor

8. Register with the General Organization for Social Issuance (GOSI).

9. Register a National Address

10. Issue a GM Visa

11. Registration with the General Authority of Zakat and Tax (GAZT) and VAT Registration

• Residency and Banking (Projected timeline: 3 months)

Lastly, the process ends with completing the residency and completing the necessary procedures to have an active corporate bank account.

12. Activate the Chamber of Commerce (CoC) account.

13. Obtain Health Insurance

14. Get a Medical Check-up

15. Issuing the GM’s Iqama

16. Register with the Muqeem

17. Register with the Absher

18. Register with the Qiwa

19. Register with the Mudad

20. Open a bank account

Understanding Tourism Licensing Requirements

After formalizing their presence, tourism companies will be required to obtain a license from the Ministry of Tourism, depending on the nature of the activity and operations. Examples of these licenses include Tourist Accommodation Facilities, Travel and Tourism Services, and Tourist Services Office.

Crucially, it’s essential to ensure adherence to the requirements of each license to demonstrate compliance with regulatory standards.

License Type: Tourist Accommodation Facilities

Requirements include but are not limited to:

Valid commercial register that includes the operation of a tourism accommodation facility (along with ISIC code)

1. Valid license from MoMRAH or the competent authority - as applicable (e.g.: RCJY).
2. A valid permit from the General Directorate of Civil Defense or the like.
3. MEWA approval (for agricultural land plots).
4. National Center for Vegetation Development approval for land plots falling within its mandate.
5. A document proving the right to use the brand issued by SAIP - if any.
6. Connect to Shomoos platform.
7. Direct integration between guests' registration software and NTMP Platform (NTMP.GOV.SA).
8. Attach a documented contract or agreement in case an MT-licensed company is appointed to manage the tourism accommodation facility.

Issuance Timeline: 5 days

License Type: Travel and Tourism Services

Valid commercial register that includes the requested travel and tourism category.

1. Valid license from MoMRAH or the competent authority - as applicable.
2. Service provider website registration in the commercial register.
3. A document proving the right to use the brand issued by SAIP - if any.
4. Financial guarantee for the following categories (General travel and tourism services and the tourist operation) as follows:
   • A final and unconditional bank guarantee in the name of MT issued by one of the local banks or banks licensed to operate in the Kingdom. The guarantee shall cover the required license period and an additional 60 days, and is not subject to cancellation except with MT prior written approval.
   • The amount for each category is as follows:
     1. General travel and tourism services: Bank guarantee amount: SAR 800,000.
     2. Tour operation: Bank guarantee amount: SAR 50,000.

Issuance timeline: 2 days

License Type: Touristic Services Office

Requirements include, but not limited to:

1. Valid commercial register that includes the requested travel and tourism category.
2. Valid license from MoMRAH or the competent authority - as applicable
3. Service provider website registration in the commercial register.
4. A document proving the right to use the brand issued by SAIP - if any.
5. Financial guarantee for the following categories (General travel and tourism services and the tourist operation) as follows:
   • A final and unconditional bank guarantee in the name of MT issued by one of the local banks or banks licensed to operate in the Kingdom. The guarantee shall cover the required license period and an additional 60 days, and is not subject to cancellation except with MT prior written approval, the amount for each categories is as follows:
     1. General travel and tourism services: Bank guarantee amount: SAR 800,000.
     2. Tour operation: Bank guarantee amount: SAR 50,000.

Issuance timeline: 2 days.

Download the Saudi tourism-focused guidebook to get expert insights into the trends and emerging opportunities shaping the future of tourism and hospitality

Why Expand your Tourism Business to Saudi

Tourism is one of the largest and most important sectors that contributes to the economic diversification in Saudi, and its position as a dynamic hub that attracts capital, businesses, and talent.

Encompassing core industries such as hotels and resorts, travel agents and guides, events, and entertainment, tourism’s direct and indirect contribution to GDP is believed to have reached 11.5% in 2023.

Below are the key growth drivers that add up to make Saudi the ideal expansion destination for global tourism businesses.

• Significant Growth in Visitor Arrivals

Year after year, Saudi keeps attracting a consistently growing influx of foreign and domestic travelers.

In 2023, the country welcomed over 100 million visitors. In the same year, the entire sector contributed a record $118.4 billion (SR444.3 billion) to the GDP.

This positive momentum ticked upwards into 2024. The tourism sector recorded about 17.5 million leisure-seeking tourists in just the first seven months.

Looking ahead, the government’s headline target for 2030 is 150 million visitors a year.

• Growing Emphasis on Diversifying Tourism Offerings

The revival of the tourism sector is intertwined with the growing shift towards diversifying product offerings and experiences. Central to this strategy are massive developments such as Amaala, The Red Sea, and Diriyah Gate, each designed to cater to different traveler segments.

Entertainment, wellness, sports, heritage, and MICE are among the primary categories that are rapidly gaining momentum in the Saudi tourism landscape.

Evidently, Saudi’s state-of-the-art event infrastructure strengthened its prominence as the ideal host of large-scale gatherings such as the FIFA World Cup 2034 and the Riyadh Expo 2030.

Certainly, the economic impact surrounding these mega-events triggers the multiplier effect on other industries, carrying with it myriad investment opportunities.

Realizing the benefits of establishing a Saudi presence, RezLive, a B2B travel booking platform and part of the Travel Designer Group, has recently expanded to the Kingdom via AstroLabs, the Gulf's leading business expansion platform. It has since managed to effectively establish itself as a digital enabler in the Saudi tourism ecosystem.

• Ongoing Infrastructure Development Boom

Infrastructure development is evolving at breakneck speed. Saudi Arabia has been taking bold steps to improve the sector’s infrastructure imperatives. These efforts include expanding airport capabilities, transforming railways, and increasing hotel coverage.

As of June 2024, as many as 255 tourism infrastructure projects valued at $1.7 trillion were underway nationwide.

Further, initiatives like the Riyadh Metro and King Salman International Airport expansion project (targeting 120 million annual passengers by 2030) are expected to elevate the country's tourism landscape by creating seamless and memorable experiences for travelers.

These factors have made Saudi a launchpad for global players like ADB Safegate, another member of AstroLabs' expansion network.

With deep expertise in aviation and aerospace manufacturing, ADB Safegate's high-tech solutions have been pivotal in upgrading key aviation facilities, including the Red Sea International Airport and King Khaled International Airport.

For global businesses seeking unparalleled growth opportunities, it makes sense to start a business in the tourism industry in Saudi Arabia.

Frequently Asked Questions about Setting Up a Tourism Business in Saudi Arabia

1. Is 100% foreign ownership permitted in the tourism industry?

Saudi Arabia allows full foreign ownership in various sectors, including tourism; however, certain licenses, such as tourism consultancy licenses and tourism guide services, require Saudi nationality.

2. What licenses are required to operate a tourism business?

Key licenses include:

• Commercial Registration (CR) Issued by the Ministry of Commerce.
• Tourism License: Issued by the Ministry of Tourism.

Furthermore, additional Permits may be required depending on certain activities.

Thus, obtaining the help of market entry firms such as AstroLabs can surely help you with the incorporation process and other tasks related to licensing and more.

3. What are the Saudization requirements?

The Saudization policy mandates hiring a certain proportion of Saudi nationals. However, the rate might vary by company size and industry.

Notably, compliance with Saudization rules is a non-negotiable aspect of a successful tourism business incorporation process.

Presently, AstroLabs offers customized services tailored to address companies' specific hiring needs to remain in compliance.

4. Have recent changes been affecting the tourism sector?

As of September 4, 2024, Saudi scrapped fees for issuing commercial activity licenses for hotels, hotel apartments, and residential resorts.

This initiative is part of various types of incentives and schemes available for businesses contributing to the development of the strategic sector in Saudi.