How To Set Up a Travel & Tourism Company in Saudi Arabia

Tourism is a central part of Saudi Arabia’s push to reduce its reliance on oil. It is one of the few non-oil sectors seeing targeted policy support and clear investment. International arrivals hit 27 million last year, with a target of 100 million by 2030.

The government has opened the door to foreign investors, but the licensing process is detailed and tied to specific activities. This guide covers what’s involved, what it costs and what to expect when building a licensed travel company in the Kingdom.

Choose the right activity type

Before applying, you need to be clear on what the business will actually do. Tourism covers a wide range of activities and each one has its own licence. That includes inbound or outbound tour operations, travel agency services, ticket sales, online booking and pilgrimage facilitation. Hajj and Umrah work is restricted to Muslim-owned firms and carries extra conditions. Some licences can be combined but only with approval. The activity type must match your business plan and will shape the rest of the setup from Saudization rules to bank guarantees. Starting with the wrong one will delay the process so it’s important to get this part right.

Licensing requirements

The licence itself comes from the Ministry of Tourism, but there are a few steps to get through first. You’ll need a commercial registration with the Ministry of Commerce. If the company is foreign-owned, a MISA licence is required at the start. That gives you the green light to operate in the sector.

You also need a physical office in Saudi and a Saudi national as your general manager. Saudization rules apply, though the quota varies depending on your setup.

Most travel firms must lodge a financial guarantee with a local bank which for some activities can reach SAR 300,000. On top of that, professional liability insurance is mandatory before the licence is issued.

It sounds like a lot on paper, but once the documents are in place, the actual approval process tends to move at a decent pace.

Cost and timelines

A MISA licence usually runs between SAR 2,000 and SAR 10,000, depending on the ownership structure and activity type. The tourism licence itself is around SAR 3,000. On top of that, most firms must place a financial guarantee with a local bank, typically between SAR 100,000 and SAR 300,000 depending on the licence. This deposit remains locked while the business is active.

Office rental costs vary by location, with Riyadh and Jeddah at the higher end. A small setup in a secondary city may cut overheads significantly.

Assuming all paperwork is complete and in order, the licence is generally issued within seven working days. Delays usually come from incomplete submissions or issues with name or activity approvals.

Tax and VAT

Most tourism services in Saudi Arabia are subject to VAT at the standard 5% rate. This includes domestic flights, hotel stays, car hire and guided tours. Some parts of international packages may qualify for zero rating, depending on how and where the service is delivered.

It’s important for travel businesses to understand whether they act as a principal or as an intermediary. VAT treatment changes depending on the structure of the transaction.

Refunds, cancellations and no-shows follow specific VAT rules and should be factored into the booking terms. Getting this wrong can affect your VAT reporting, so it pays to get the details right at the outset or work with a qualified adviser.

Saudisation and hiring

Even small firms are expected to hire Saudi nationals. The required number depends on your licence and headcount, but it’s a core part of the rules. If you fall short, penalties can apply, and in some cases, your licence or visa quotas may be restricted.

You’ll also need to register with GOSI and issue employment contracts through the Qiwa platform before applying for work visas. Front-office staff are usually expected to speak both Arabic and English, especially in customer-facing roles. Though not a legal rule, clients and regulators tend to expect it.

Hiring the right people early on makes everything else run more smoothly. It also reduces the risk of delays during inspections or licence renewals.

Growth, strategy and support

Tourism revenues in Saudi Arabia jumped 106% last year, reaching nearly SAR 100 billion. Revenues from inbound tourism more than doubled, and large areas of the country are being developed as tourism investment zones with public funding. The momentum is backed by funding and policy direction.

But the pace of change means rules shift often and approvals can vary by activity or jurisdiction. Some ventures require clearance from multiple ministries. Saudization, VAT, and ongoing compliance all need close attention, especially when services span multiple categories.

Professional support can save time and help avoid costly delays. Local experts understand how to navigate requirements, manage shifting expectations, and keep your business on solid ground from setup through to full operation.