Trade Licence in Saudi Arabia: Starting Your Import/Export Business

If you’re planning to start an import/export business in Saudi Arabia, there’s one key document you’ll need to get started legally—a trade licence. This licence isn’t just a formality; it’s what makes your business legit in the eyes of Saudi authorities. The trade licence requirement in Saudi Arabia makes sure the safety of products, and people in the country.

But how do you get a trade licence, and what types of trade licence Saudi Arabia has? What’s the trade licence registration process like? In this guide, we’ll walk you through everything you need to know about commercial trade licences in KSA.

What is a Trade License?

A trade licence is one of the 8 business licences in KSA. The Ministry of Investment (MISA) and Ministry of Commerce (MC) are the key authorities responsible for issuing these licences. Each licence type has its requirements, and it is crucial to apply for the right one based on your business activity. 

A trade licence is an official permission from the Saudi government that allows you to legally run an import/export business within the country. It's a green light for your business activities, if you’re involved in buying, selling, importing, or exporting goods. 

Types of Trade Licences in Saudi Arabia

To get your business licensed for trading in Saudi Arabia, you can either get a 100% foreign commercial licence or a Commercial License with a Saudi shareholder.

100% Commercial Licence

A 100% commercial licence lets a foreigner own the business entirely and directly in Saudi Arabia. They don’t need a local partner or shareholder. This licence is particularly valuable because it provides complete ownership and control over business operations, decision-making, and profits.

Commercial Licence with a Shareholder in Saudi Arabia

In contrast, a Commercial License with a Shareholder involves a partnership structure in which you can partner with a Saudi resident to set up the firm. Typically, this structure might require the Saudi resident to hold a certain percentage of the business ownership, as mandated by local laws. 

This licence is suitable for investors who seek a local partner’s expertise, market knowledge, or networks to help establish and grow the business in Saudi Arabia.

Differences Between 100% Commercial License and Commercial License with a Shareholder

Requirements for Obtaining a Trade License in KSA

For running a business in Saudi Arabia as a 100% owner, you need to meet the following conditions:

• The company must already operate in at least three other countries outside Saudi Arabia.
• A minimum investment of SAR 30 million is required within the first year.
• A total investment of SAR 170 million is expected within the first five years in the Saudi branch.

For foreign companies who want to partner with a shareholder in Saudi and get a commercial licence with a partner, they need:

• The Saudi partner should hold at least 25% ownership.
• A minimum of SAR 26,666,666 is required as the initial investment.
• Foreign investors must retain shares worth at least SAR 20 million.
• For 100% GCC-National Owned Companies

Businesses fully owned by GCC nationals can start an import/export business by fulfilling the following criteria for a commercial licence:

• An initial investment of at least SAR 50,000 is needed.
• All other rules align with those for Saudi-owned businesses.

Steps to Get a Trade Import/Export License in Saudi Arabia

The following steps will give you a clear idea of how to get a Commercial License for trading import/export items in KSA.

Step 1: Business Name Reservation

• Make sure that the name you decide meets Saudi naming regulations, avoiding any prohibited or restricted terms.
• Submit a reservation application for the name of your business to the Ministry of Commerce and Investment, ensuring no other business uses it.

Step 2: Initial Approval

• Submit your business plan and office location details
• Documents Needed:
  • Business plan 
  • Proposed business location details and lease draft (if available)
  • Owner’s identification and proof of qualifications (if required for specific industries)
  • Preliminary list of business activities 

Step 3: Legal Documentation Preparation

Draft and notarise key legal documents. These essential documents include:

• Proof of a physical business location is required.
• Memorandum of Association (MoA) detailing shareholders and ownership percentages
• Articles of Association (AoA) specifying the company’s operational rules
• Signed lease agreement or proof of premises (if final location is secured)
• Background checks or identity proof of each shareholder (passport for foreigners or ID for Saudi nationals)

Step 4: Apply for the Trade License

Apply for the trade licence, specifying that you will engage in import and export activities. This licence is required for legal business operations within Saudi Arabia.

Some import/export businesses may need additional permits depending on the type of goods (e.g., pharmaceuticals, food products). For such goods/services, you will need clearance from industry-specific regulatory bodies.

Step 5: Get an Import/Export Code

The Saudi Customs Authority issues the Import Export Code (IEC), which is required to clear goods through customs. It authorises your business to legally bring goods into or ship goods out of Saudi Arabia.

The IEC is valid for life, but you must renew it every year between April and June.

Step 6: Start Your Business

When you start your business, some regulations cannot be ignored. They are:

• Complete the MCI platform clearing procedures at least 48 hrs before the shipment arrives in KSA. 
• Importers may need to present an IECEE certificate for certain goods. So check its validity and renew when necessary
• Importers can use the Customs Tariff website to check which conditions apply to the products they want to import. If you fail to meet these terms, it can lead to the seizure of the product or penalties from the government.

Conclusion

Saudi Arabia’s market is booming, making it a great place to start an import/export business. But, you need a trade licence to stay on the right side of the law. Without one, you risk:

• facing heavy fines
• delays in shipments
• having your goods seized
• harm your business reputation
• legal issues

So, getting a trade licence is not just about compliance but about keeping your business alive.