Opening a Commercial Registration (CR), known locally as Sijil Tijari, is the foundational step for any business in the Kingdom. The process is fully digitized through the Saudi Business Center (SBC) and the Ministry of Commerce.
The following sections outline the strict eligibility rules, documentation, and potential hurdles.
Eligibility and Conditions
Before applying, the applicant must meet these non-negotiable criteria:
Age: You must be at least 18 years old.
Government Employment: You cannot be a government employee (civil or military). The system links with the Civil Service database and will automatically block the application if you are employed by the state.
Residency Status:
Saudi Nationals: Must have a valid National ID.
GCC Nationals: Must have a valid passport/ID and be registered in the Absher system.
Non-GCC Foreigners: Cannot open a CR directly. You must first obtain a Foreign Investment License (MISA License) before you are eligible for a CR.
Documents and Information
For a standard Sole Proprietorship (Establishment), physical documents are rarely needed as data is pulled from the National Information Center. However, you must have the following prepared:
Active Absher Account: Required for identity verification via the Nafath app.
Trade Name: You must propose a unique name.
Tip: Using your personal name (e.g., "Ahmed Al-Fulan Trading") is approved instantly. Creative names (e.g., "Sunrise Coffee") require a "Trade Name Reservation" step and manual approval.
Business Activity: You must select the correct ISIC codes (e.g., "Retail sale of clothing") that match your actual business model.
Articles of Association (Companies Only): If you are forming an LLC or Corporation, you must submit the notarized Articles of Association (AoA).
Fees and Costs
The total cost to issue the CR involves two main fees:
Ministry of Commerce Fee:
Main CR: SAR 200 per year.
Branch CR: SAR 100 per year.
Chamber of Commerce Fee: This is mandatory and depends on your business capital and class.
Class 3 (Small Business): Approximately SAR 800 per year.
Class 2 (Medium Business): Approximately SAR 2,000 per year.
Class 1 (Large/Excellent): SAR 5,000 – SAR 10,000+ per year.
Processing Time
Standard Issuance: Instant. Once fees are paid via SADAD, the CR is generated immediately as a printable PDF.
Trade Name Reservation: If you choose a creative name, it may take 1 to 2 business days for a reviewer to approve it before you can issue the CR.
Common Rejection Reasons
Applications are rarely "rejected" in the traditional sense; they are usually blocked instantly by the system for specific reasons:
Existing Government Job: The most common barrier. If your social insurance record shows you work for the government, you cannot proceed.
Trade Name Conflict: If your proposed name is similar to an existing brand or contains prohibited words (e.g., "Royal," "Mecca," or non-Arabic text without a special exception), it will be declined.
Restricted Activity: Selecting activities like "Security Services," "Media Publishing," or "Financial Consultancy" requires a pre-license from other ministries. You cannot issue the CR until that specific license is linked.
Cost Breakdown of Starting a Small Business in Saudi Arabia
Starting a business involves more than just the registration fee. The following breakdown categorizes the financial commitments into fixed setup costs and recurring operational expenses.
1. Fixed Setup Costs (One-Time)
These are the costs incurred before you open your doors.
Government Registration (CR): SAR 1,000 – SAR 1,200 (includes 1 year of CR and Chamber of Commerce fees).
Municipal License (Rakhsa Baladiya):
Calculated per square meter.
Range: SAR 2 to SAR 300 per sqm, depending on the city and street classification.
Example: A 40sqm shop in a standard Riyadh neighborhood often costs between SAR 2,000 and SAR 4,000 annually.
Fit-out and Signage:
You cannot get a license without a finished shop and a mounted sign.
Signage: SAR 3,000 – SAR 10,000 depending on size and lighting (3D letters vs. lightbox).
Civil Defense: Costs for fire extinguishers, smoke detectors, and safety certificates (approx. SAR 1,000 – SAR 2,500).
2. Recurring & Variable Costs (Annual/Monthly)
This is where most of the budget is consumed.
Rent (Commercial Real Estate):
Prices vary wildly by city and zone.
Premium Locations (Riyadh/Jeddah): SAR 1,500 – SAR 2,500+ per sqm annually.
Standard Locations: SAR 200 – SAR 500 per sqm annually.
Note: Rent is usually paid in 2 or 4 checks per year.
Government Compliance Portals:
You must subscribe to various digital platforms to manage employees.
Qiwa: Approx. SAR 1,265 annually (for small entities).
Muqeem: Approx. SAR 1,150 – SAR 3,450 annually (depending on package).
National Address (SPL): Approx. SAR 500 – SAR 1,000 annually.
Employee Sponsorship (Expatriates):
If you hire non-Saudis, the costs are significant.
Government Fee (Work Permit): SAR 9,600 per year per employee (unless you have sufficient Saudi staff to exempt this).
Iqama Renewal: SAR 650 per year.
Health Insurance: SAR 1,200 – SAR 3,500 per year per employee (mandatory).
Total per Expat: Expect to pay SAR 12,000 – SAR 15,000 annually in government fees alone, on top of their salary.
3. What Affects Pricing?
Location: A license in a "Class A" street in Riyadh costs significantly more per meter than a license in a remote town.
Waste Collection Fees: The municipality charges a commercial waste fee based on the activity type. A coffee shop pays more than a tailor shop. Fees range from SAR 1,200 to SAR 10,000+ per year.
Saudization (Nitaqat): To avoid the SAR 9,600 work permit fee for expats, you must hire a Saudi national. Their minimum salary for Nitaqat calculation is SAR 4,000/month (plus GOSI insurance costs), which is a major operational expense.
