Set Up a Travel and Tourism Company in Saudi Arabia

June 26, 2024
by Adil Ahmad
blog

Saudi Arabia, once known primarily for its oil wealth and religious pilgrimages, is rapidly emerging as a dynamic and diverse tourist destination. The Kingdom’s Vision 2030 has set ambitious goals to transform the country into a global tourism hub, offering a blend of rich cultural heritage, modern attractions, and natural wonders. For entrepreneurs and businesses looking to capitalize on this burgeoning sector, setting up a travel and tourism company in Saudi Arabia presents an exciting opportunity.

As we look ahead to 2024, the Saudi tourism landscape continues to evolve at an unprecedented pace. The government’s commitment to diversifying the economy has led to significant investments in infrastructure, attractions, and policies designed to boost the tourism sector. From the implementation of new visitor visas to the development of mega-projects like NEOM, Saudi Arabia is positioning itself as a must-visit destination for travellers from around the world.

The Growing Tourism Sector in Saudi Arabia

The Saudi tourism sector has witnessed remarkable growth in recent years, driven by a series of strategic initiatives and reforms. These include:

Implementing a new visitor visa that allows visitors from 49 countries to stay up to 90 days significantly easing entry requirements for international tourists.
Making historical places like AlUla, Diriyah, and Mada’in Saleh accessible to the public, showcasing the Kingdom’s rich cultural heritage.
Organizing international events such as Formula 1, Dakar Rally, Red Sea International Film Festival, and Riyadh Season, attracting global attention and visitors.
Undertaking mega projects like NEOM, Qiddiya, Amaala, and Red Sea Project, which promise to create world-class tourist destinations within the Kingdom.

These initiatives have contributed to a substantial increase in tourist arrivals and tourism revenue. According to recent projections, the Saudi tourism sector is expected to contribute 10% to the country’s GDP by 2030, up from 3% in 2019.

Why Start a Travel and Tourism Company in Saudi Arabia?

Booming Tourism Market

Saudi Arabia’s tourism market is experiencing unprecedented growth, with the government aiming to attract 100 million annual visits by 2030. This ambitious target presents immense opportunities for travel and tourism companies to cater to the influx of domestic and international tourists.

Government Support and Incentives

The Saudi government is actively encouraging private sector participation in the tourism industry through various incentives, including tax breaks, streamlined licensing processes, and support for SMEs in the tourism sector.

Diverse Tourism Offerings

From pristine beaches along the Red Sea coast to the futuristic city of NEOM and from historical sites to modern entertainment complexes, Saudi Arabia offers a diverse range of attractions catering to different types of tourists.

Strategic Location

Saudi Arabia’s strategic location at the crossroads of Europe, Asia, and Africa makes it an ideal hub for regional and international tourism, offering opportunities for multi-destination travel packages.

Untapped Market Potential

As a relatively new player in the global tourism market, Saudi Arabia offers first-mover advantages for companies entering the sector, with less competition compared to more established tourist destinations.

Legal Requirements for Setting Up a Travel and Tourism Company in Saudi Arabia

1. Choose the Right Business Structure

When setting up a Travel Company in Saudi Arabia, you’ll need to decide on the most suitable business structure. Options include:

Limited Liability Company (LLC)
Branch of a Foreign Company
Joint Stock Company

Each structure has its advantages and considerations, so it’s essential to evaluate your specific needs and consult with experts to make an informed decision.

2. Obtain Necessary Licenses and Approvals

To operate a Tourism Company in Saudi Arabia, you’ll need to obtain the following licenses and approvals:

Commercial Registration from the Ministry of Commerce and Investment
Tourism License from the Saudi Commission for Tourism and National Heritage
Membership in the Saudi Travel and Tourism Association

3. Meet Capital Requirements

The minimum capital requirement for setting up a travel and tourism company in Saudi Arabia varies depending on the business structure and activities. As of 2024, the typical minimum capital requirement ranges from SAR 100,000 to SAR 500,000.

4. Comply with Saudization Requirements

Ensure compliance with Saudization policies, which require a certain percentage of Saudi nationals to be employed in your company. The exact percentage varies based on the company’s size and activities.

Steps to Set Up Your Travel and Tourism Company in Saudi Arabia

1. Develop a Comprehensive Business Plan

Create a detailed business plan outlining your company’s vision, target market, services offered, marketing strategy, and financial projections. This plan will be crucial for obtaining licenses and attracting potential investors or partners.

2. Choose a Company Name

Select a unique and appropriate name for your company, ensuring it complies with Saudi naming conventions and regulations. The name should be in Arabic or have an Arabic equivalent.

3. Apply for Initial Approval

Apply for initial approval to the Ministry of Commerce and Investment, including your proposed company name and business activities.

4. Secure Office Space

Lease physical office space in Saudi Arabia, as virtual offices are generally not accepted for company registration purposes.

5. Prepare and Submit Required Documents

Gather and submit all necessary documents, including:

Articles of Association
Shareholders’ information and copies of IDs/passports
Proof of capital deposit
Lease agreement for office space

6. Obtain Final Approval and Commercial Registration

Once your application is approved, you’ll receive the final approval and Commercial Registration certificate from the Ministry of Commerce and Investment.

7. Apply for Tourism License

Submit an application for a tourism license to the Saudi Commission for Tourism and National Heritage, along with the required documents and fees.

8. Register with Relevant Authorities

Register your company with the General Organization for Social Insurance (GOSI) and the Zakat Tax and Customs Authority (ZATCA).

What Types of Travel and Tourism Companies Can You Establish in Saudi Arabia?

When setting up a travel and tourism company in Saudi Arabia, you have several options to consider:

Travel Agency: Offer travel planning services, ticket bookings, and tour packages for both domestic and international travel.
Tour Operator: Specializes in creating and managing tour packages within Saudi Arabia, showcasing the country’s diverse attractions.
Accommodation Provider: Establish hotels, resorts, or vacation rentals to cater to the growing number of visitors.
Transportation Services: Offer car rentals, chauffeur services, or specialized tourism transport options.
Adventure Tourism Company: Capitalize on Saudi Arabia’s diverse landscape by offering desert safaris, diving experiences, or mountain trekking tours.
Cultural Tourism Services: Focus on providing guided tours to historical sites and cultural experiences.
MICE (Meetings, Incentives, Conferences, and Exhibitions) Services: Tap into the growing business tourism sector by offering event planning and management services.
Eco-Tourism Company: Develop sustainable tourism experiences that showcase Saudi Arabia’s natural beauty while preserving the environment.

What are the Legal Requirements for Setting Up a Travel and Tourism Company in Saudi Arabia?

Establishing a travel and tourism company in Saudi Arabia involves several legal requirements:

Business Registration: Register your company with the Ministry of Commerce and Investment.
Tourism License: Obtain a tourism license from the Saudi Commission for Tourism and National Heritage (SCTH).
Commercial Registration: Secure a commercial registration certificate from the Ministry of Commerce and Investment.
Chamber of Commerce Membership: Join the local Chamber of Commerce in your operating area.
Zakat and Tax Registration: Register with the General Authority of Zakat and Tax (GAZT).
GACA License: If offering air travel services, obtain a license from the General Authority of Civil Aviation (GACA).
Insurance: Secure appropriate insurance coverage as required by Saudi regulations.
Saudization Requirements: Comply with Saudization policies by employing Saudi nationals as per the stipulated quotas.

It’s important to note that these requirements may vary based on the specific type of travel and tourism company you’re establishing and your chosen business structure (e.g., LLC, Joint Stock Company, or Branch Office).

How Can You Finance Your Travel and Tourism Company in Saudi Arabia?

Securing adequate financing is crucial for the success of your travel and tourism company. Here are some options to consider:

Personal Investment: Utilize personal savings or assets to fund your venture.
Bank Loans: Approach Saudi banks for business loans tailored to SMEs and startups.
Government Funding: Explore funding options through initiatives like the Tourism Development Fund or the Small and Medium Enterprises General Authority (Monsha’at).
Venture Capital: Seek investment from venture capital firms interested in the Saudi tourism sector.
Angel Investors: Connect with angel investors who specialize in travel and tourism startups.
Crowdfunding: Consider crowdfunding platforms to raise capital, especially for innovative tourism concepts.
Strategic Partnerships: Form partnerships with established companies to share resources and financial burdens.
Franchise Opportunities: Explore franchising options with international travel and tourism brands looking to enter the Saudi market.

When seeking financing, it’s essential to have a robust business plan that demonstrates the potential of your travel and tourism company in Saudi Arabia’s growing market.

What are the Key Challenges in Operating a Travel and Tourism Company in Saudi Arabia?

While the opportunities in Saudi Arabia’s tourism sector are immense, there are also challenges to consider:

Cultural Sensitivity: Ensuring your services align with local cultural norms and religious practices.
Regulatory Compliance: Navigating the complex regulatory landscape and staying updated on changing regulations.
Seasonality: Managing the seasonal nature of tourism, particularly during religious periods like Ramadan and Hajj.
Competition: Differentiating your services in an increasingly competitive market.
Talent Acquisition: Finding and retaining skilled professionals in the tourism industry while meeting Saudization requirements.
Infrastructure Development: Dealing with ongoing infrastructure projects that may temporarily affect tourist experiences.
Market Education: Educating international travellers about Saudi Arabia as a tourist destination and overcoming preconceptions.
Sustainability: Balancing tourism growth with environmental and cultural preservation.

Addressing these challenges requires careful planning, local knowledge, and adaptability to the evolving Saudi tourism landscape.

How Can You Market Your Travel and Tourism Company in Saudi Arabia?

Effective marketing is crucial for the success of your travel and tourism company in Saudi Arabia. Consider the following strategies:

Digital Marketing: Develop a strong online presence through a user-friendly website, social media engagement, and search engine optimization (SEO).
Partnerships: Collaborate with local and international travel agencies, hotels, and attractions to expand your reach.
Content Marketing: Create engaging content that showcases Saudi Arabia’s attractions and unique experiences.
Influencer Collaborations: Partner with travel influencers and bloggers to promote your services and destinations.
Trade Shows and Events: Participate in tourism trade shows and events both in Saudi Arabia and internationally.
Local Partnerships: Build relationships with local businesses and communities to offer authentic experiences.
Government Initiatives: Align your marketing efforts with Saudi government tourism campaigns and initiatives.
Customer Testimonials: Leverage positive customer experiences to build trust and credibility.
Targeted Advertising: Use data-driven advertising to reach specific demographics interested in Saudi tourism.
Loyalty Programs: Implement customer loyalty programs to encourage repeat business and referrals.

What are the Future Trends in Saudi Arabia’s Tourism Sector?

As you establish your travel and tourism company in Saudi Arabia, it’s essential to be aware of emerging trends that could shape the industry:

Eco-Tourism: Growing interest in sustainable and environmentally friendly tourism experiences.
Adventure Tourism: Increasing demand for unique, adrenaline-pumping experiences in Saudi Arabia’s diverse landscapes.
Cultural Immersion: Rising popularity of authentic cultural experiences and interactions with local communities.
Wellness Tourism: Expansion of health and wellness-focused travel options, including luxury spa resorts and retreat centres.
Smart Tourism: Integration of technology to enhance tourist experiences, such as AR/VR tours and AI-powered travel planning.
Halal Tourism: Continued growth in the halal tourism market, catering to Muslim travellers’ specific needs.
MICE Tourism: Expansion of business tourism with the development of world-class conference and exhibition facilities.
Luxury Travel: Increasing demand for high-end, exclusive travel experiences and accommodations.
Sports Tourism: Growth in sports-related travel, driven by major international events hosted in Saudi Arabia.
Educational Tourism: Rise in travel programs combining tourism with educational or skill-development opportunities.

Staying attuned to these trends can help you position your travel and tourism company for long-term success in the Saudi market.

Get Set Up a Travel and Tourism Company in Saudi Arabia

Setting up a Travel and Tourism Company in Saudi Arabia presents an exciting opportunity to be part of the Kingdom’s rapidly growing tourism sector. With the government’s strong support, ambitious development projects, and the opening up of the country to international visitors, the potential for success in this industry is substantial.

At Incorpyfy, we specialize in Company Formation in Saudi Arabia and offer comprehensive support for entrepreneurs looking to establish a Travel and Tourism Company in Saudi Arabia. Our expert team understands the nuances of the Saudi market and can guide you through every step of the process, from selecting the right business structure to obtaining all necessary licenses and approvals.

Whether you’re interested in starting a Tourism Company in Saudi Arabia, setting up a Travel Company in Saudi Arabia, or exploring Tourism Company Formation in Saudi Arabia, Incorpyfy is your trusted partner. We offer tailored solutions to meet your specific needs and ensure a smooth and efficient company setup process.

By leveraging our expertise in Travel Company setup in Saudi Arabia, you can navigate the complexities of the local business environment with confidence and focus on building a successful tourism enterprise in this dynamic market.

Take the first step towards realizing your entrepreneurial dreams in Saudi Arabia’s booming tourism sector. Contact Incorpyfy today to learn more about how we can assist you in establishing and growing your Travel and Tourism Company in the Kingdom.