Tawaref series: Saudi entrepreneurship licence at a glance

Offering unique benefits not available in traditional licence tracks, the entrepreneurship licence is a one-of-a-kind opportunity designed to foster innovation and support startups. Entrepreneurs who are granted this licence gain access to reduced licensing fees, premium residency eligibility, and entry into one of the top business ecosystems of the world. Once you secure this licence, you are free to conduct business in Saudi Arabia; no other steps are required. 

In this article, we will touch upon topics like eligibility criteria, unique benefits, expected timeline, documentation requirements, and more. 

What is the entrepreneurship licence?

Popularly referred to as the ‘golden ticket to Saudi’, the entrepreneurship licence is a special type of foreign investment licence awarded to talented entrepreneurs who want to launch businesses in Saudi Arabia.

Launched in 2017 by the Saudi government, this licence has quickly gained notoriety as an incredible option for forward-thinking business leaders who want to establish headquarters in Saudi. Approximately 350 licences were awarded to tech leaders just last year, with numbers projected to increase in the coming years.

What unique benefits does the entrepreneurship licence offer?

A few standout benefits make the entrepreneurship licence a very attractive option for up-and-coming tech startup founders. The following are some of these key incentives:

No established company required: 

Unlike traditional licences, which are only awarded to established businesses looking to expand operations, the entrepreneurship licence allows foreign investors to open a brand new business in Saudi Arabia. As a result, other conditions like audit report requirements and positive cash flow preference do not apply. Essentially, you can open a business headquartered in Saudi under your name. 

MISA licence fee waiver

With an entrepreneurship licence, you benefit from a fee waiver of 60,000 SAR from the MISA licence fee for the first three years, bringing your fee down to just 2,000 SAR annually! From the 4th to the 5th year, the fee is reduced to 12,000 SAR. Starting from the 6th year onwards, the standard fee of 62,000 SAR applies. This structure offers substantial savings during the crucial early years of your business.

Premium residency perks

Entrepreneurship licence holders get access to exclusive premium residency perks that no other foreign investors are eligible for. Successfully raising SAR400,000 from authorised partners qualifies them for a 5-year entrepreneurial premium residency. Additionally, raising $4 million and employing 10 staff for one year make them eligible for lifelong entrepreneurial PR, ensuring a permanent business presence in Saudi Arabia.

Who is eligible for this licence?

The entrepreneurship licence aims to attract top tech talent to Saudi Arabia, a factor that is reflected in its eligibility requirements as well. Usually, traditional IT companies like software houses or microbusinesses are not eligible for this licence. It is only awarded to innovative tech businesses developing visionary products and services. Exceptionally, governments sometimes also award this licence to venture capitalist firms. 

To qualify for this licence, the startup must be backed by a VC, angel group, incubator, or accelerator. 

How to prove the eligibility?

To prove the eligibility requirements discussed above, the startup must produce a support letter or proof of project. This is a type of recommendation letter to MISA from any authorised party that the company is backed by.

Why is a support letter required?

Streamlining of operations is the major reason for requiring a support letter as part of the entrepreneurship application. The government does not have the capacity to personally review the credibility of each startup, so they partner with authorised entities instead and take their recommendation as validation that this company is innovative enough to be invited to Saudi. 

Who can issue a support letter?

Although there is no official list of authorised parties published by the government, venture capitalist funds, business incubators, angel groups, and accelerators can usually issue support letters. However, Tawaref has compiled a list of some of the most popular support letter providers for entrepreneurship licence on our website. 

How can I get a support letter issued?

Usually, VCs and angel groups only give you a support letter when they are investing in your startup. Incubators and accelerators, on the other hand, provide support letters to startups that are registered with them under some program. 

Try to secure a support letter issued by a well-known entity, as that is a strong indication that the application will be accepted. Tawaref has published a list of some of the more popular entities providing support letters for your reference.

If you are interested in securing an entrepreneurship licence but are struggling to get a support letter, Tawaref may be able to help you. Set up an appointment with our team of professionals, and we will try our best to facilitate you. 

Expected timeline and required documentation

It takes about one week to complete the entrepreneurship licence process, including application, payment, and revision (if needed). The following is a checklist of the important documents the application must contain. 

1. Support Letter
2. Passports of owner(s)
3. Holding company registration (if exists)
4. Letter of Intent: Contains important information about the company’s future business commitments in the next few years. This includes employee hiring quota, expected investment fundraising, and approximate revenue generation. 

Saudi Expansion Series

This article is part of the Saudi Expansion series, where we aim to educate international entrepreneurs and business owners on Saudi Arabia’s foreign investment regime for a smooth landing. This article is written by Tawaref, a tech investment community that finances top regional startups and offers entrepreneurial services.