Conditions for opening a tourism company in Saudi Arabia: Licenses, requirements, and steps
2 days ago
Saudi Arabia’s tourism sector is witnessing an unprecedented historical transformation. Since the launch of Saudi Vision 2030, tourism has become one of the most important pillars of economic diversification, with a target of attracting 100 million annual visits by 2030.
This massive ambition has created promising investment opportunities for entrepreneurs and investors looking to enter the Saudi tourism market. If you are thinking about establishing a company in Saudi Arabia, you are heading toward a promising sector with annual compound growth exceeding 15%.
However, success in this field requires a comprehensive understanding of the regulatory framework, legal conditions, and procedures necessary to obtain licenses. In this comprehensive guide, we will take you on a detailed journey covering everything you need to know about requirements for opening a tourism company in Saudi Arabia.
Thinking about establishing a tourism company?
Tourism Sector in Saudi Arabia: Golden Opportunities
Before diving into regulatory details, it is important to understand the size of the opportunity. Saudi Arabia is investing heavily in the tourism sector, with mega projects such as:
- The Red Sea Project: Spanning 28,000 square kilometers and including 50 luxury resorts.
- NEOM: The futuristic city featuring unique tourism destinations.
- AlUla: A global heritage site attracting thousands of tourists annually.
- Qiddiya: The world’s largest entertainment city.
These projects, along with visa facilitation and new airline routes, have created increasing demand for specialized travel and tourism services.
What Are Travel and Tourism Services Activities?
According to the Travel and Tourism Services Regulations issued by the Saudi Ministry of Tourism, tourism activities are organized into four main categories:
Category One: Hospitality Unit Booking
This category is limited to providing marketing and booking services for hospitality units and private hospitality facilities. Suitable for companies focusing on hotel reservations and tourism property management.
Category Two: Tour Organization
- Arranging accommodation services in hospitality facilities.
- Arranging tourist guide services.
- Arranging catering services in the tourist program.
- Arranging and implementing ground services for tourists.
- Arranging car rental services with or without driver.
- Arranging tourist insurance services.
- Preparing, marketing, and implementing the tourist program.
Category Three: Travel and Tourism Agency
- Selling travel tickets inside or outside the Kingdom.
- Arranging accommodation services in hospitality facilities.
- Arranging tourist insurance services.
- Marketing tourist programs.
- Arranging visa issuance services for travel outside the Kingdom.
- Arranging international driving license issuance services.
Category Four: General Travel and Tourism Services
This most comprehensive category includes all services from previous categories, plus:
- Marketing tourism destinations.
- Arranging visa issuance services for those wishing to come to the Kingdom.
- Preparing tourist programs for those wishing to come to the Kingdom.
- Arranging chartered transport services (land, sea, and air).
Requirements for Opening a Tourism Company in Saudi Arabia
Article Five of the Travel and Tourism Services Regulations specifies the following conditions:
First: Commercial Registration
A valid commercial registration must be obtained, including the requested travel and tourism activity category. The commercial registration is issued by the Ministry of Commerce.
Second: Municipal License
A valid license must be obtained from the Ministry of Municipal and Rural Affairs and Housing or the relevant authority. For those providing online services only for the first three categories, documenting the website is sufficient.
Third: Official Data
Submit official data for the applicant, the travel and tourism services office, and their representative in dealings with the Ministry.
Fourth: Trademark
Submit proof of the right to use the trademark if applicable.
Fifth: Financial Guarantee
Submit a financial guarantee according to the requested category. The guarantee amount is determined by a decision from the Minister of Tourism and does not exceed two million Saudi Riyals.
Requirements Related to Human Resources
The licensee must employ qualified personnel:
- Executive Manager: Must have management and operation authority, hold at least a bachelor’s degree with at least one year of experience in tourism, or a diploma with two years of experience.
- Employees: Workers in departments, units, and divisions must hold specialized training certificates.
- Registration: Register all employee data with the Ministry of Tourism and update it every three months.
- Language: Proficiency in Arabic and English, both spoken and written.
Need support in hiring qualified tourism staff?
Required Licenses Step by Step
Step One: Prepare Requirements
Before applying, ensure you have:
- Valid commercial registration including the tourism activity.
- Rental contract or property deed for the office.
- Business plan outlining proposed services.
- Required financial guarantee.
Step Two: Apply via the Tourism Activities Licensing Portal (TLG)
- Log in to the electronic portal.
- Select “New License Request.”
- Fill in the required data.
- Upload documents.
Step Three: Pay Fees
| Category | One Year | Two Years | Three Years |
|---|---|---|---|
| General Travel and Tourism Services | 20,000 SAR | 22,000 SAR | 24,000 SAR |
| Tour Organization | 10,000 SAR | 11,000 SAR | 12,000 SAR |
| Travel and Tourism Agency | 10,000 SAR | 11,000 SAR | 12,000 SAR |
| Hospitality Unit Booking | 5,000 SAR | 5,500 SAR | 6,000 SAR |
Step Four: Review and Approval
The Ministry of Tourism reviews the application and verifies compliance with conditions. After approval, the license is issued.
Step Five: Final Registrations
- Registration in the Chamber of Commerce.
- Registration with the Zakat, Tax and Customs Authority.
- Opening a file with the Social Insurance.
Financial Guarantee: Complete Details
The financial guarantee is one of the most important conditions. It is a bank guarantee provided to protect tourists’ rights. The guarantee covers:
- Fines imposed on the licensee after 45 days from notification.
- Financial rights of tourists after 24 hours from notification.
- Compensation for damages resulting from services provided.
License Duration and Renewal
| Item | Details |
|---|---|
| License Duration | Not exceeding three years, renewable. |
| Renewal | Renewal application must be submitted within 60 days before license expiration. |
| General Travel and Tourism Services | 2,000 / 4,000 / 6,000 SAR |
| Tour Organization | 1,000 / 2,000 / 3,000 SAR |
| Travel Agency | 1,000 / 2,000 / 3,000 SAR |
| Hospitality Unit Booking | 500 / 1,000 / 1,500 SAR |
Ongoing Obligations for Tourism Companies
After obtaining the license, there are ongoing obligations:
- Issue a booking document for each client including service details, prices, and cancellation policy.
- Provide receipts in both Arabic and English.
- Availability of credit card payment services (Visa and MasterCard).
- Provide 24/7 customer service.
- Compliance with quality and safety standards.
- Notify the Ministry of any security or safety incidents.
- Assign at least one tourist guide for every 25 tourists.
- Do not market unlicensed hospitality units.
Common Mistakes to Avoid
Not Understanding Categories
Many investors apply for the “General” category without needing it, increasing costs. Define your needs precisely and choose the appropriate category.
Ignoring the Financial Guarantee
The financial guarantee is not just a formal procedure, but real protection for customers. Make sure you understand its mechanisms and recovery.
Not Complying with Registrations
All employees must be registered and their data updated every three months. Neglecting this obligation may result in fines.
Weak Booking and Documentation System
You must have an approved electronic booking system and complete documentation system for all transactions.
Expected Total Costs
In addition to licensing fees, there are other costs:
- Office furnishing: 50,000 – 200,000 SAR.
- Electronic systems: 30,000 – 100,000 SAR.
- Bank guarantee: Varies by category.
- Insurance: According to number of employees.
- Marketing and advertising: 20,000 – 50,000 SAR annually.
Tips for Success in the Saudi Tourism Sector
1. Specialization
Focus on a specific type of tourism (adventure tourism, luxury tourism, religious tourism).
2. Partnerships
Build strong relationships with hotels, airlines, and government entities.
3. Technology
Invest in advanced booking systems and mobile applications.
4. Quality
Provide exceptional service that builds a strong reputation.
5. Saudization
Train and develop Saudi personnel.
6. Compliance
Full compliance with all regulations and systems.
FAQs About Requirements for Opening a Tourism Company
Can foreigners open a tourism company in Saudi Arabia?
Yes, but a Saudi partner with at least 25% ownership is required. Learn more about company formation costs for foreigners in KSA.
How long does the licensing process take?
Typically between 30 to 60 days from the date of complete documentation submission.
Can I operate a tourism company from home?
For online services only. For services requiring a physical location, an independent office must be provided.
What is the required Saudization percentage?
It varies depending on company size, but there are Saudization incentive programs available.
Can I obtain multiple categories under one license?
Yes, the “General Travel and Tourism Services” category includes all categories.
Start Your Journey in Saudi Tourism Today
Establishing a tourism company in Saudi Arabia represents a unique investment opportunity in a rapidly growing market. With a deep understanding of conditions and obligations, and good strategic planning, a successful company can be built that benefits from the historic transformation in the Kingdom’s tourism sector.
Remember that success in this sector depends not only on obtaining the license, but on providing an exceptional tourism experience that makes Saudi Arabia a preferred destination for tourists from around the world. With your commitment to quality and compliance, and a professional partnership like HR360 for managing your human resources, you can achieve success and positive impact in this vital sector.