Post-Incorporation Licensing in Saudi Arabia: Balady, Civil Defense and Sectoral Licences

Introduction

Obtaining the Commercial Registration (CR) is the first milestone in setting up your company in Saudi Arabia, but it does not give you the legal right to open your doors and start actual business operations on the ground. Saudi regulations require a package of municipal and operating licences and safety certificates to ensure full compliance and avoid fines and suspension of services.

1. Unified National Address for Establishments (SPL)

• Issuing authority: Saudi Post (SPL).
• Regulatory importance: A mandatory first requirement for opening bank accounts, registering with GOSI and obtaining a Balady licence.
• Procedure:
  1. Register on the “SPL for Business” platform using the Commercial Registration and the National Single Sign-On (Nafath) account.
  2. Register the actual premises of the establishment and document the building details (building number, postal code, additional number, street and district name).
• Government fees: A unified annual fee for establishments and companies (from SAR 500 to SAR 1,000 per year for the head office).

2. Commercial Activity Licence from the “Balady” Platform

• Issuing authority: Ministry of Municipalities and Housing (municipalities and sub-municipalities).
• First core requirement (commercial lease):
  • An electronic lease contract for the commercial premises or office must be concluded and documented exclusively through the “Ejar” network. Paper contracts are not accepted.
  • The leased activity on the Ejar platform must match the Commercial Registration activity and the approved building plan (commercial / administrative).
• Steps to obtain a Balady licence:
  1. Log in to the Balady (balady.gov.sa) platform with your Nafath account.
  2. Select the “Issue a Commercial Licence” service.
  3. Enter the Commercial Registration number, the electronic lease contract number and the contract postal code.
  4. Specify the activity precisely according to the National Classification of Economic Activities (ISIC4).
  5. Check the site requirements (premises area, parking, shop front, signboard and its dimensions).
• Instant vs non-instant activities:
  • Instant activities: The licence is issued electronically as soon as the fees are paid (e.g. administrative offices, consulting companies, IT premises).
  • Non-instant activities: Require a prior field inspection by a municipal inspector before the licence is issued (e.g. restaurants, factories, warehouses, health activities).
• Municipal fees: Calculated dynamically through the “Municipal Fees Calculator” using the formula: (area in square metres × activity type factor × street and city classification factor) plus commercial signboard fees, and typically range between SAR 300 and SAR 2,500 per year for medium-sized offices.

3. Civil Defense Safety Licence and Certificate (“Salama” Platform)

• Issuing authority: General Directorate of Civil Defense (Ministry of Interior).
• Purpose: To verify the establishment’s compliance with the Saudi Building Code and fire prevention requirements.
• Issuance mechanism:
  • The “Balady” platform is automatically linked to the Salama (salama.com.sa) platform.
  • For low-risk establishments (administrative offices and small shops): The safety certificate is issued instantly online after declaring that firefighting equipment is in place (extinguishers, smoke detectors, emergency exits).
  • For medium and high-risk establishments (warehouses, factories, large showrooms):
    • The establishment must contract a maintenance and safety company accredited by Civil Defense to carry out an inspection and submit a “technical safety report” to the system.
    • An official field inspection by Civil Defense safety officers before approval.
• Fees: Range between SAR 100 and SAR 1,000 depending on the site area and the nature of the activity.

4. Specialised Sectoral Licences (Examples of Regulated Sectors)

If your company’s activity goes beyond general administrative services, you need an operating licence from the sector regulator:

1. Food, medical and cosmetics sector: Warehouse and establishment licence from the Saudi Food and Drug Authority (SFDA) through the “Ghad” platform.
2. Transport, logistics and car rental sector: Operating card and freight broker card licence from the Transport General Authority (TGA) through the “Wasl” platform.
3. Telecommunications and IT sector: Licence to provide cloud computing or telecommunications services from the Communications, Space and Technology Commission (CST).
4. Tourism and hospitality sector: Hotel operation or travel and tourism agency licence from the Ministry of Tourism.