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Navigating Hotel Operations in Saudi Arabia: Key Regulatory Considerations for Foreign Operators

Writer's picture: Mazin AlabdulkarimMazin Alabdulkarim

Updated: Sep 16, 2024


International hotel operators seeking to establish a physical presence in Saudi Arabia (KSA) must carefully consider the structural requirements of their operations within the Kingdom. Traditionally, many foreign operators have engaged in management agreements with local hotel owners without a stringent regulatory framework, often providing consulting services from offshore locations. However, recent amendments to the Tourism Law and updates to its Implementing Regulations necessitate a reassessment of these arrangements.


Foreign hotel operators intending to manage or operate hotels in KSA must now establish a licensed legal entity within the Kingdom. Notably, there is no requirement for a local national partner or sponsor for foreign operators in this context. The most common entity structure is a limited liability company, which must comply with local regulatory standards.


To initiate this process, foreign operators must first secure a foreign investment license from the KSA Ministry of Investment (MISA) for hotel management activities, classified under the KSA National Classification for Economic Activities code 551011. Following this, a commercial registration certificate must be obtained from the KSA Ministry of Commerce (MOC).


Once the company is established and has received the necessary licenses, operators must apply for a license from the KSA Ministry of Tourism (MOT) to manage or operate accommodation facilities, as defined under the Tourism Law. This license encompasses a range of support services and specialized technical expertise in accommodation management, tailored to the specific type and category of the facility.


In conclusion, foreign hotel operators must navigate a series of regulatory requirements and obtain multiple licenses to successfully operate within the evolving hospitality landscape of Saudi Arabia.



Clyde & Co. (2023, March). KSA introduces new laws and regulations to boost tourism. Retrieved from https://www.clydeco.com/en/insights/2023/03/ksa-introduces-new-laws-regulations-boost-tourism


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