How to Set Up a Foreign Mining Business in Saudi Arabia: A Step-by-Step Guide

This guide outlines the full process for foreign companies to establish and operate mining businesses in the Kingdom, from licensing to compliance.

Saudi Arabia has opened the mining sector to 100% foreign ownership, supporting its broader industrial localization agenda.

With an estimated $2.5 trillion in untapped mineral wealth and exploration spending up 500% since 2020, the Kingdom has made clear that mining is now a strategic economic pillar.

Foreign companies account for 66% of total mining investment and winning licenses issued in 2025, and the number of active exploration companies grew from just 6 in 2020 to 226 in 2024.

If you're looking to enter this market, the process follows the same general framework as setting up a business in Saudi Arabia, with a few sector-specific considerations layered on top. This guide walks you through every stage.

Why Mining Is a Priority Sector in Saudi Arabia

Saudi Arabia's New Mining Investment Law reduced the corporate mining tax rate from 45% to 20%, a signal that the government is actively courting international operators.

Annual exploration spending is growing at 32%, against a global average of 6–8%. The Vision 2030 framework designates mining as the "third pillar" of the national economy alongside oil and tourism, which means regulatory support, infrastructure investment, and licensing processes have all been overhauled to reflect that priority.

For foreign companies, this creates a well-defined entry window, but the setup must be done correctly from day one. Licensing gaps or compliance failures can halt operations and jeopardize permits.

Mining License Types in Saudi Arabia

The Saudi mining sector is governed by the Mining Investment Law (2020), which sets out a structured licensing framework designed to ensure transparency and investor confidence. There are seven license types. Make sure you identify the right one for your activity before applying through MISA.

1. Mining License authorizes the mining and exploitation of Class A and B minerals, with rights to sell and transfer extracted materials. This is the standard license for full-scale mining operations.
2. Reconnaissance License covers preliminary exploration of mineral areas, including sample collection. Typically the first license obtained before committing to a site.
3. Exploration license permits targeted search and analysis of minerals through surface and geological methods. Follows reconnaissance-stage findings.
4. General Purposes License authorizes the establishment of off-site facilities in support of mining or small mining licensees. Relevant for companies operating processing or logistics infrastructure.
5. Building Materials License covers the mining of Class C minerals such as gravel and sand. A separate and simpler track from the main mining license.
6. Small Mining License functions similarly to a full Mining License but is designed for smaller-scale extraction of Class A and B minerals.
7. Surplus Raw Materials License permits the transport and utilization of excess Class C materials generated from sites you already own.

Mining Firm Licensing Process: The Three-Stage Market Entry

Stage 1: Legal Entity Establishment (Month 1)

Before any mining operations can begin, you must establish a legally registered entity in Saudi Arabia. This stage typically takes around one month to complete.

1. Obtain a MISA Investor License from the Ministry of Investment (valid for one year; must be renewed annually)
2. Reserve your company name through the Ministry of Commerce
3. Draft and notarize your Articles of Association (AoA)
4. Secure a Commercial Registration (CR) from the Ministry of Commerce
5. Register with the Chamber of Commerce (CoC)

Stage 2: Authorization and Hiring (Months 2–3)

Once your legal entity is registered, you move into activating your operational status and preparing to bring in staff.

1. Obtain your official company seal
2. Register with the Ministry of Labor
3. Enroll with GOSI (General Organization for Social Insurance) for employee insurance coverage
4. Register your National Address
5. Issue a General Manager (GM) visa
6. Register with ZATCA for VAT compliance

Critical Timeline Note: The GM must enter Saudi Arabia within three months of the visa issuance date. Missing this window invalidates the visa and restarts the process.

Stage 3: Residency and Banking

This stage completes your company's operational readiness. By the end of it, your GM will hold residency status, and your business will have a functional corporate bank account.

1. Activate your Chamber of Commerce (CoC) account
2. Obtain health insurance for the GM
3. Complete the GM's medical check-up (mandatory for Iqama issuance)
4. Issue the GM's Iqama (residency permit)
5. Register with Muqeem (tracks residency and visa status)
6. Register with Absher (national digital identity platform)
7. Register with Qiwa (labor contracts, Saudization compliance, employee management)
8. Register with Mudad (payroll protection and wage compliance)
9. Open a corporate bank account with a Saudi bank

If you're planning to set up a business as a foreigner, the GM's Iqama is the central document that unlocks access to most downstream operational steps—banking, portal registrations, and employment contracts among them.

Ongoing Compliance Requirements

Setup is the starting point, not the endpoint. Once operational, your mining business must maintain compliance across five areas:

• Tax filing with ZATCA: File annual documentation accurately and on time. Corporate tax stands at 20% of adjusted net income, withholding tax ranges from 5% to 20%, and Zakat is assessed at 2.5% of the company's Zakat base.
• License and permit renewals: The GM's Iqama, Commercial Registration, and MISA license all have expiry dates. Missing a renewal can trigger operational suspension.
• Government portal management: Keep records current across Muqeem, Qiwa, and Mudad. These platforms are integrated—outdated information in one creates cascading issues.
• Payroll and HR compliance: Process compensation accurately and maintain payroll records aligned with Saudi labor law, which is updated regularly.
• Saudization (Nitaqat): Your business must meet Saudi national employment quotas based on company size and sector. Falling below the required threshold puts your company in Red Zone status, resulting in restrictions on hiring expatriates and potential fines.

Related reads

MISA License Renewal: Requirements and Consequences Explained

Winning Government Contracts in Saudi: What Foreign Companies Need to Know

General Manager's Checklist for Setting Up a Foreign Business in Saudi Arabia