How to obtain an industrial license in Saudi Arabia in 2024

The Regulations of Industrial License in Saudi Arabia

Investors must apply through the Ministry of Industry and Mineral Resources' webpage in order to begin industrial projects in Saudi Arabia (MIMR). Foreign investors need to register with MISA in order to do business. This entails proving financial feasibility and completing a thorough business plan. While it can be advantageous, not all industries require a local partner. The product and manufacturing capacity, the expected capital, and the intended site should all be disclosed by the investor. The ministry will give the applicant a license application form if it decides the proposal is suitable. In Saudi Arabia, a license to form an industrial business is granted based on one of the two regulations listed below:

• Industrial projects wholly owned by foreign capital or in joint ventures with foreign capital are subject to the Foreign Investment Law.
• The National Industrial Development Program applies to industrial projects established by Saudi citizens with full Saudi capital.

Rules for Industrial License

Projects with a fixed capital of less than (SAR 1 million) are not eligible for the industry license system. It is imperative that they obtain commercial registration, however. Investors should procure registration forms from the Industrial Project Evaluation and Licensing Department of the Ministry. To the Department of Commerce, investors are required to submit the equipment invoice and the form. Upon receiving approval, they will reach out to the business registration authority. Regardless of the project's location, the investor is required to contact the registration department to initiate the registration procedure. Industrial licenses from the Ministry are not required for the commercial registration of bakeries, refrigerated storage facilities, ice plants, and cement mixing projects.

Tax Exemption in the Saudi Industrial Sector:

The revised regulations, which exempt a variety of industrial inputs from taxes and duties, were approved by the Kingdom of Saudi Arabia's Cabinet on May 17, 2024. Machinery, equipment, spare parts, primary raw materials, semi-manufactured materials, and packaging materials that are indispensable for industrial production are included in these exemptions.

The objective of this regulation is to increase the competitiveness of products manufactured in the Kingdom of Saudi Arabia in international markets. By alleviating the burden of duties, Saudi companies will be able to reduce their prices or reinvest the savings in the improvement of product quality and marketing strategies, effectively reducing production costs. This will enable Saudi products to more effectively compete with foreign commodities that are subject to customs duties, thereby increasing their appeal to both consumers and investors.

The Saudi Cabinet has authorized the updated regulations for the exemption of industrial inputs from taxes.

• Machinery.
• Equipment.
• Spare components.
•  Materials that have undergone semi-processing.
• Raw and packaging materials.

The following conditions must be met by industrial enterprises in order to obtain these benefits:

• Ensure that all necessary information and detailed information regarding the industrial project are provided to the Ministry, and representatives of the Ministry may inspect the project in accordance with the Act.
• Utilize only the equipment, machinery, spare parts, and raw materials that are exempt from tariffs in licensed factories in order to obtain the exemption.
• The staff must consist of Saudi labor and technical personnel, unless the Ministry of Labor and Social Affairs has approved any other personnel.

Industrial License Application Process

The applicant's legal status, company information, and products should be included in the application. It intends to generate data regarding the local competition within the Kingdom. Description of the manufacturing process, detailed information regarding equipment, apparatus, and raw materials, manpower requirements, and plans for Saudi labor and personnel training. Economic feasibility study, project cost, marketing plan, and project value. In addition to recommending development projects, the Foreign Investment Committee is responsible for evaluating investment applications, investigating complaints or disputes, recommending penalties for violators, and formulating rules for bill implementation. SAGIA|MISA highlights how crucial it is for international businesses to conduct business with the appropriate licenses. All Saudi Arabian industrial permits, including those for heavy, light, and transition industries, are provided by this service. Documents for Industrial License Saudi Arabia

1.   Commercial registration document certified by the Saudi Embassy. The ID must be provided if one of the       partners is a natural person with the nationality of one of the GCC countries.
2.  The financial statements of the parent company from the previous fiscal year.
3.  Assume that one of the partners suggested that the Ministry of Investment had granted prior authorization. It is necessary to specify the collaborator information when submitting the online application.
4. Owners of luxury residences are exempt from these requirements.
5.  The applicant is required to provide information regarding their nationality, domicile, or premium residence in Saudi Arabia. 6. In order to acquire an industry license, the license must be reissued at the Ministry of Industry and Mineral Resources. Obtain environmental certification in collaboration with the General Administration of Meteorology and Environmental Protection.

Emark your investment journey in Saudi Arabia

Need further assistance with your industrial license in Saudi Arabia? CIG Saudi Arabia can assist you in obtaining an industrial license. Our consulting team will guide you in setting up your business from the ground up. Contact us if you require additional assistance with Business Setup in Saudi Arabia.