A Complete Guide to Restaurant Licenses & Permits in Saudi Arabia

Saudi Arabia’s food and beverage (F&B) sector is undergoing remarkable growth, driven by the Saudi Vision 2030, which aims to diversify the economy and improve quality of life. It’s a key sector that attracts investments and creates jobs, especially as demand rises for innovative food services and high-quality products.

In 2024, Saudi’s full-service restaurant sector was estimated at around $14.62 billion. The sector is expected to grow to $22.25 billion by 2029, at a compound annual growth rate (CAGR) of 8.76% between 2024 and 2029.

However, to succeed restaurants and coffee shops need to comply with local regulations and obtain the necessary licenses and permits. Doing so ensures business stability, builds customer trust, and helps avoid violations and penalties.

In this article, we’ll cover the most important licenses and permits you need to open a restaurant in Saudi Arabia. 

• Commercial Registration

The commercial registration is a fundamental legal document for establishing any commercial activity. In Saudi Arabia, the Ministry of Commerce is the entity responsible for issuing it. 

This document provides the legal credibility required to launch and operate a restaurant. It also contributes to enhancing the restaurant’s trustworthiness with both customers and government entities.

Here are the steps to issue a commercial registration in Saudi Arabia:

1. Register a trade name: Begin by registering your business or trade name via the Ministry of Commerce’s online platform. This step ensures your trade name is unique and hasn’t been used before.
2. Select the business activity: After registering a trade name, specify the type of business activity you intend to run. Determine whether it’s a restaurant and coffee shop, in the F&B sector or something else.
3. Fill in information and pay the fees: Accurately fill in all required information on the platform, review and agree to the terms, and pay the applicable fees online. Fees start from SAR 500 per registration.
4. Issue the Commercial Registration: Once you’ve completed the previous steps and the relevant authorities have reviewed them, your commercial registration will be issued immediately. Your business activity will be automatically registered at the remaining entities, enabling you to legally begin operations.

Obtaining a commercial registration isn’t just a formality. It’s a critical step towards launching your business with confidence and transparency, in full compliance with the law.

• Municipal licenses

A municipal license is required for setting up and operating food establishments in the Kingdom. It’s issued through the Balady Platform, which is affiliated with the Ministry of Municipal and Rural Affairs. 

This license ensures your establishment complies with technical, health, and public safety standards, and aligns with urban planning regulations.

Main requirements for obtaining a municipal license:

• Approved location: The restaurant has to be in a commercial area, mall, or other designated zone. It must also have a fixed, verifiable address supported by a valid electronic lease contract or an ownership deed to prove the credibility and safety of the establishment’s location.
• Architectural layout: An architectural plan must be submitted, showing the restaurant’s internal space design. This helps assess the suitability of space and ensures the design meets municipal design requirements.
• Building safety certificate: You’ll need to obtain a certificate confirming the building’s safety and ability to contain the proposed business without posing structural or safety risks.
• Civil defense approval: You need the Civil Defense Department’s approval to ensure fire and emergency safety regulations are implemented within the establishment.
• Compliance with technical and health standards: The project needs to meet all technical and health requirements set by the relevant authorities. This ensures a safe and healthy environment for both customers and staff.

License application and renewal process

Applications for municipal licenses are submitted online via the Balady Platform. All required documents are uploaded online, following the official procedures for approval. 

The relevant authorities determine the validity period of the license and enable its electronic renewal by notifying the owner in advance of the license renewal time.

For more details, you can review the general health requirement regulations for food preparation establishments as set by the Ministry of Municipal and Rural Affairs here.

You can also explore the health requirements and provisions for restaurants and kitchens, as well as how to create an account and the steps to issue a new license. (Documentation is only available in Arabic at this time)

• Health certification for employees

The health certificate for employees is a key step to guarantee food safety and quality of service in establishments that prepare or serve food, including restaurants and cafés. 

This certificate obliges all employees to undergo regular medical check-ups, committing to health and precaution standards to ensure safe products for customers.

Procedures to issue a health certificate:

• Medical examination: Employees must undergo a comprehensive medical check-up at certified medical centers. This step is to ensure they are free of infectious diseases and prevent their spread in the workplace.
• Required vaccinations: It’s mandatory for employees to receive certain vaccinations, such as the hepatitis vaccination.
• Food safety awareness training courses: Completing a training course accredited by the Saudi Food and Drug Authority (SFDA) is critical for employees in your restaurant. This course covers the fundamentals of food safety and best practices in hygiene and sanitation. It helps the staff understand and limit the risks related to improper food handling.

• SFDA license

The SFDA license is required in specific situations, particularly those involving dealing with imported or processed food ingredients. 

It’s also required when operating in wholesale or food distribution. This license ensures the highest levels of food safety and quality, in compliance with local and international health standards.

Situations requiring an SFDA license:

• Dealing with imported or processed food ingredients: If your business deals with food ingredients that are produced abroad, imported into Saudi Arabia, or processed before distribution, obtaining an SFDA license is necessary. It’s important to verify the safety of these products and their compliance with health standards.
• Wholesale or food distribution: Businesses involving selling food products in bulk or distribution require an SFDA license to ensure proper supply chain oversight and provide safe products to end consumers.
• Required documentation and license duration: Exact requirements vary based on the nature of your business and the type of your products. However, you need to submit detailed data about the product or food ingredient. 

Information about the production or importation process and reports and laboratory analyses proving compliance with health standards shall be provided as well. Quality and safety certifications are also required.

The SFDA license is granted for a specific duration and is renewable after regular evaluation to ensure continued compliance with the required standards.

Obtaining this license and operating under the ongoing supervision of the SFDA ensures the provision of safe and high-quality food products. It also helps build a strong reputation for your restaurant.

• Civil defense approval

Receiving the Civil Defense’s approval is crucial to opening any restaurant or café in Saudi Arabia. This step aligns with the national emphasis on promoting the “Safety First” culture. 

It’s not just a formality, it’s a guarantee to turn your restaurant or café into a safe environment, capable of managing emergencies and protecting lives and properties. In turn, this reflects positively on your restaurant’s reputation.

Safety measures include:

• Fire extinguishers and alarm boxes: Installation of functioning fire extinguishers and alarm boxes is a must. This enables prompt action when emergencies occur and helps contain potential fires in restaurants.
• Automatic fire sprinkler systems: These systems help control and suppress fires by evenly distributing water to limit their spread.
• Accessible emergency exits: Your establishment must have designated, clearly marked emergency exits. These exits ensure a quick and safe evacuation of customers and staff in case of emergency.

Securing the Civil Defense’s approval isn’t merely to comply with regulations, it’s to ensure everyone’s safety on the premises. It also boosts staff and customer confidence that your restaurant aligns with the highest standards of safety and security.

• Music or entertainment license

As part of Saudi Arabia Vision 2030, which aims to revitalize the entertainment sector in line with the new cultural trends, music and entertainment activities are now an integral part of the customer experience in restaurants and cafés. 

However, strict regulations are in place to ensure alignment with identity and cultural values.

This license serves as a tool to strike a balance between cultural openness and adherence to regulations. Its requirements vary depending on the nature of the activity and the authority granting the license.

When is a music permit required?

A music permit is required when music is played as part of the services offered within an establishment. This music can be recorded or performed live. 

Live music performances and entertainment events require a special license to ensure they meet the kingdom’s official standards. On the other hand, playing recorded music may involve simpler procedures.

The General Entertainment Authority (GEA) is the government department responsible for regulating live performances or musical events, ensuring they comply with national entertainment policies and guidelines.

However, the responsibility for issuing permits may fall to the local municipality, depending on the type of activity, its impact on the surrounding environment, and the workflow within the establishment.

Differences between recorded and live music in terms of licensing:

Recorded music: This involves playing pre-produced audio through sound systems or digital platforms. Licensing for recorded music is usually less complex and focuses on compliance with intellectual property rights and adherence to sound and organizational standards.

Live music: This includes live performances by bands or musicians within the establishment. Obtaining a license for live music requires approval from relevant authorities regarding the genre played by the band, the show time, and designated performance areas. This is because live performances have a greater influence on audience size and the overall entertainment environment.

The music and entertainment license is not a limitation, but rather a framework to ensure customers enjoy a high-quality experience, aligning with the society’s values and ambitions. 

With Saudi Arabia turning into a global cultural attraction hub, obtaining such a license is an investment in the quality of customer experience, while avoiding risks that could impact your business’s stability.

For more details, you can read the entertainment licensing and activity supervision regulations defined by the GEA here.

• ZATCA registration 

Restaurants and coffee shops operating in the Kingdom must register in the Zakat, Tax, and Customs Authority (ZATCA) to ensure compliance with financial and tax regulations. This is a mandatory step according to the standards set by the authority. 

Registration ensures all business activities contribute to the national economy and operate within the legal framework.

When is ZATCA registration mandatory?

Restaurants and coffee shops are required to register in the ZATCA if their annual revenues exceed SAR 375,000. Such a condition helps in identifying entities that need to submit value-added tax (VAT) declarations and comply with all applicable tax obligations.

Steps to register for VAT via the e-Portal:

1. Visit the ZATCA website: Start by accessing the authority’s official website.
2. Create an official account: The business owner needs to either create a new user account or log in if an account already exists.
3. Fill in the required information: This includes personal, financial, and commercial data, such as the commercial registration details, address, and other relevant information.
4. Upload the necessary documentation: Submit copies of the required documents, such as the commercial registration, national ID, and the lease contract or property deed.
5. Submit and track the application: The application is submitted electronically and can be tracked through the portal. Ensure all requirements are fulfilled to receive final approval.

Tax obligations for restaurants

Once registration is complete, the business must adhere to the following:

• Issue tax invoice: VAT-compliant invoices, currently valued at 15%, must be issued, with financial transactions related to the business properly recorded.
• Keep financial records: The restaurant must keep all financial records and documents supporting financial transactions for the period specified by regulations.
• Submit a tax declaration: The premises shall file periodic declarations, usually quarterly, that include sales and purchases details, and the owed or refundable VAT.
• Ensure compliance with tax reports: The business needs to abide by all instructions and updates issued by the ZATCA to ensure accurate financial reporting and avoid legal violations.

Explore the features in Foodics’ accounting system for restaurants and cafes, which helps you automate invoice issuance and tracking.

For more details, refer to the ZATCA’s guideline for submitting VAT declarations.

• Special permits based on business activity

With the variety of restaurants and cafes, the kingdom has introduced specific requirements tailored to each business model. This is to ensure service quality and protect consumers, while maintaining flexibility that supports innovation in the sector. These special permits are part of a regulatory strategy to keep up with global developments, striking a balance between entrepreneurship and compliance with regulations.

• Serving shisha/hookah: Restaurants serving shisha shall obtain a special permit from the municipality. This permit involves meeting proper ventilation requirements by equipping the establishment with efficient systems to guarantee safe indoor air quality. This is in addition to designating a space for smoking shisha in line with health and safety standards.
• Food trucks: A separate license is required for running a food truck, with specific standards to be met for the vehicle used. In this case, the truck must operate only in certain locations approved by relevant authorities. This ensures regulatory safety and provision of services in suitable locations, aligned with local regulations.
• Cloud kitchens: For cloud kitchens, the location serves as a production kitchen and must adhere to specific food safety and storage requirements. This includes special standards for storage, packaging, and delivery processes to ensure food quality and safety.

 

Lastly…

Running a restaurant or coffee shop in Saudi Arabia requires strict adherence to various licensing procedures. These procedures are designed to uphold quality and safety standards according to laws and regulations. 

The process starts with obtaining a commercial registration from the Ministry of Commerce as a legal foundation. Then, it’s followed by securing a municipal license that defines the location and design standards. This is in addition to the Civil Defense approval to ensure the building’s safety. Health certificates from the SFDA for staff are also essential.

Special activities like serving shisha or running a food truck require additional permits, such as ventilation or vehicle specifications. You must also register in the ZATCA and pay off your tax obligations, including invoices and regular tax declarations.

Compliance with regulations isn’t just a routine step, it’s an investment in your restaurant’s reputation and customer trust. It also helps you avoid financial or legal risks. Planning ahead and regular license renewals prevent you from surprises or penalties and violations.

Got all your licenses? Now, you’re ready to operate efficiently with Foodics, a management system designed for restaurants in Saudi Arabia from day one. Contact us!