Saudi Arabia is becoming one of the world’s fastest-growing tourism markets, attracting significant investment and international attention. With a government-led push for economic diversification, the tourism sector is expanding rapidly, opening new opportunities for business setup in the KSA in the tourism sector.
This post breakdowns the business setup process in the tourism industry including licensing requirements and key growth factors that make Saudi Arabia an ideal destination for foreign investors.
TOURISM BUSINESS OVERVIEW IN SAUDI ARABIA
1. Why Expand Your Tourism Business to Saudi Arabia?
Saudi Arabia’s tourism sector is experiencing unprecedented growth and several key factors contribute to this rapid expansion.
- In 2023, Saudi Arabia welcomed over 100 million visitors, generating $118.4 billion (SAR 444.3 billion) in GDP contributions. By 2030, the government aims to attract 150 million tourists annually.
- The Kingdom is developing new tourism destinations like Amaala, The Red Sea, and Diriyah Gate, catering to luxury travelers and heritage enthusiasts.
- As of June 2024, there were 255 active tourism infrastructure projects worth $1.7 trillion.
- Saudi Arabia is set to host FIFA World Cup 2034 and Riyadh Expo 2030, further cementing its place as a major player in the global tourism and events industry.
With these opportunities in mind, establishing a tourism business in Saudi Arabia is a profitable venture for investors looking to tap into a thriving and well-supported industry.
2. Steps to Incorporate a Tourism Business in Saudi Arabia
A tourism business setup in Saudi Arabia involves three main stages: legal establishment, authorization and hiring, and residency and banking. The entire process typically takes around six months.
– Stage 1: Legal Entity Establishment (Estimated Time: 1 Month)
- The first step is securing an investment license from the Ministry of Investment of Saudi Arabia (MISA), allowing foreign entities to operate legally.
- Choose and reserve a company name through the Ministry of Commerce.
- Prepare the legal document outlining the company’s structure, ownership, and governance.
- Register the business with the Saudi Ministry of Commerce to receive a Commercial Registration Certificate.
- Register with the Saudi Chamber of Commerce, an essential step for business operations.
Stage 2: Authorization and Hiring (Estimated Time: 2 Months)
- Official company documents must bear a legal seal for validity.
- Register with the Ministry of Labor for hiring employees in Saudi Arabia.
- Register with the GOSI to ensure social security coverage for employees.
- Register a National Address for government correspondence.
- Issue a General Manager Visa to the designated General Manager must to oversee operations.
- Register with the General Authority of Zakat and Tax (GAZT) and VAT Registration for complying with Saudi tax laws, including VAT registration if applicable.
– Stage 3: Residency and Banking (Estimated Time: 3 Months)
- Activate the Chamber of Commerce (CoC) account for company transactions and official approvals.
- Obtain health insurance which is mandatory for all employees and business owners.
- Get a medical check-up required for residency visa approval.
- Issue the General Manager’s Iqama to legally reside and work in Saudi Arabia.
- Register with Muqeem to ensure compliance with Saudi residency regulations.
- Register with Absher for accessing various government services.
- Register with Qiwa for labor-related services.
- Register with Mudad to manage employee wage payments.
- Open a corporate bank account before business operations can commence.
Once these steps are complete, the company can apply for the relevant tourism licenses from the Ministry of Tourism.
3. Tourism Licensing Requirements
Tourism businesses in Saudi Arabia must obtain the appropriate Ministry of Tourism (MT) license based on their specific activities. Below are the main license categories and their requirements.
– Tourist Accommodation Facilities License
This license is required for businesses operating hotels, resorts, or serviced apartments.
Key Requirements:
- Valid commercial registration with a business activity related to accommodation.
- Approval from the Ministry of Municipal and Rural Affairs and Housing (MoMRAH).
- A permit from the General Directorate of Civil Defense.
- Approval from the National Center for Vegetation Development (if applicable).
- Integration with the Shomoos security system and NTMP Platform.
- If managed by a third party, a contract with an MT-licensed operator must be submitted.
– Travel and Tourism Services License
Businesses offering travel booking, tour packages, and agency services need to obtain this license.
Key Requirements:
- Valid commercial registration for travel and tourism activities.
- MoMRAH approval.
- A registered business website.
- A financial bank guarantee:
- SAR 800,000 for general travel and tourism services.
- SAR 50,000 for tour operation services.
– Touristic Services Office License
This license is needed by travel agencies, tourist guides, and tour operators.
Key Requirements:
- A commercial registration covering the relevant tourism activity.
- MoMRAH approval.
- A financial bank guarantee:
- SAR 800,000 for general travel and tourism services.
- SAR 50,000 for tour operations.
Tourism Boom in Saudi Arabia
Saudi Arabia is transforming into a global tourism powerhouse, presenting vast opportunities for businesses looking to expand into the region.
By following the structured incorporation process, obtaining the necessary tourism licenses, and leveraging the Kingdom’s infrastructure investments, investors can accomplish a compliant tourism business incorporation in Saudi Arabia in one of the world’s most promising tourism markets.