Last reviewed: 17 October 2026
Obtaining Investment Registration and a Commercial Registration does not automatically authorise a company to practise every regulated business activity in Saudi Arabia.
Many activities require an additional licence, permit or approval from a competent authority.
Examples include financial services, insurance, healthcare, food and medical products, tourism, telecommunications, transport, industrial activity, regulated professions and recruitment / labour-services activities.
Why regulated activities need a separate review
There are three different questions:
Can the foreign investor invest in the activity?
Can the company be incorporated with the activity?
Can the company legally operate the activity?
A Commercial Registration can answer the second question without automatically answering the third.
Financial, healthcare, food, tourism, telecom and transport activities
Depending on the activity, additional licensing can involve authorities such as:
- Saudi Central Bank;
- Capital Market Authority;
- Insurance Authority;
- Ministry of Health;
- Saudi Food and Drug Authority;
- Ministry of Tourism;
- Communications, Space & Technology Commission;
- Transport General Authority;
- Ministry of Municipalities and Housing / Balady;
- other competent authorities.
The exact sequence differs by activity.
Recruitment and labour-services activity
Recruitment and labour-services companies are a strong example of why a foreign investor should not choose the company structure before checking the sector rules.
The activity is regulated by the Ministry of Human Resources and Social Development (HRSD) under the rules governing recruitment and labour services.
1. Legal entity and foreign ownership
An ordinary LLC is not the correct legal form for this licensing route.
Under the current HRSD rules for foreign investment in recruitment activity, the permitted legal form is restricted to a closed joint-stock company or a branch of a foreign company.
Where the investor is establishing a Saudi company rather than a foreign branch, the company therefore needs to be structured as a closed joint-stock company, not an LLC.
For a foreign investor, the file also requires the relevant Ministry of Investment approval/registration for recruitment and labour-services activity.
HRSD's current establishment service further states that, for a foreign investor, only a corporate/legal-entity partner is accepted for the relevant partner requirement, and that the partner must demonstrate at least three years of technical experience and know-how in labour-services intermediation / manpower-supply activity.
The experience must be supported by records and documents.
2. Paid-up capital
The current HRSD classification uses paid-up capital requirements according to the licensed company category.
Current figures include:
- Small recruitment company: SAR 5 million paid-up capital
- Medium recruitment company: SAR 50 million paid-up capital
- Large human-resources company: SAR 100 million paid-up capital
The capital is required as paid-up capital under the current rules, and the establishment process requires the appropriate bank evidence before final licensing.
These figures must be treated as current regulatory figures, not permanent values.
HRSD may amend the classifications, capital levels or licensing conditions, and foreign investors should also confirm the current Ministry of Investment requirements before acting.
3. Initial bank guarantee
At the preliminary application stage, HRSD currently requires an irrevocable initial bank guarantee from a local bank equal to 2% of the company's capital.
For example, for a small recruitment company with SAR 5 million paid-up capital, the 2% initial guarantee would currently equal SAR 100,000.
This is a preliminary guarantee and should not be confused with the final guarantee required before the final licence.
4. Final bank guarantee
The current rules set final bank-guarantee levels by company category.
The current figures include:
- Small recruitment company: SAR 2 million
- Medium recruitment company: SAR 5 million
- Large human-resources company: SAR 10 million
The guarantee is issued through a local bank and is structured to remain valid for the required regulatory period. Under the current operating framework, the guarantee period is designed to extend beyond the licence period; for example, the small-company route currently reflects a guarantee period equivalent to the licence period plus two additional years.
The exact guarantee wording, period and amount should always be confirmed from HRSD before issuance.
5. These recruitment figures can change
Recruitment licensing is an area where readers should not rely on an old article or quotation.
The Ministry may change:
- company classifications;
- permitted legal form;
- minimum paid-up capital;
- bank-guarantee percentage;
- final guarantee amount;
- guarantee validity period;
- foreign-investor conditions;
- experience requirements;
- permitted activities under each licence category.
Therefore, the figures in this article are current requirements as of the last review date and must be verified again before a client incorporates the entity or arranges the bank guarantees.
Other regulated sectors
The same principle applies across other regulated industries.
A healthcare investor may need a Ministry of Health licence.
A fintech or finance investor may need SAMA or CMA authorisation.
A tourism business may need a Ministry of Tourism licence.
A food or medical-device business may need SFDA approvals.
A telecom operator may need CST authorisation.
A transport business may need TGA approval.
Does every approval come before the CR?
No.
Some approvals come before incorporation, some after the CR, and some after premises, staffing or technical conditions are satisfied.
The sequence must therefore be mapped activity by activity.
What Vertex confirms before incorporation
Before the foreign investor authenticates documents or commits to premises, Vertex confirms:
- whether the activity is available to the foreign investor;
- whether another regulator controls it;
- the permitted legal form;
- ownership conditions;
- capital requirements;
- experience requirements;
- bank guarantees;
- premises requirements;
- technical staffing conditions;
- the order in which approvals must be obtained.
Practical answer
Activities commonly requiring additional approval include financial services, insurance, healthcare, regulated products, tourism, telecom, transport, industrial and professional activities, and recruitment / labour-services activities.
Recruitment is particularly important because its current rules can prescribe the legal form, foreign-partner eligibility, technical experience, paid-up capital and bank guarantees before the final licence can be issued.
All numeric recruitment requirements in this article should be rechecked with HRSD and MISA before a client acts because the Ministry can amend the rules.
Official sources reviewed
- Ministry of Human Resources and Social Development — recruitment company establishment service
- HRSD — Rules for Practising Recruitment and Providing Labour Services
- HRSD — current preliminary licensing forms and company classifications
- Ministry of Investment — Investment Registration framework
- Other competent regulators according to sector