There are a lot of opportunities in Saudi Arabia, particularly for the food and beverage sector. The need for innovative and thrilling dining experiences is greater than ever due to the country’s youthful population, growing incomes, and thriving tourism industry, which is being fueled by large-scale initiatives like Vision 2030.
For entrepreneurs worldwide, opening a restaurant business in Saudi Arabia is an alluring opportunity. But the procedure can be complicated, requiring a thorough grasp of the local market, a number of legal procedures, and permits. Here’s where a seasoned business setup consultant like Express Business Service comes in quite handy. From the original concept to the grand opening, we specialize in guiding you through the entire process.
A Young and Expanding Population
Travel and Amusement Boom
There’s a steady stream of people searching for places to eat as big events, concerts, and cultural festivals become more frequent, and as the number of pilgrims and tourists rises.
Economic Diversification
To facilitate entry for foreign investors, the government’s Vision 2030 plan focuses on growing non-oil sectors.
High Demand for Diverse Cuisines
Types of Restaurant Business Models in Saudi Arabia
Before you start, you have to make a decision on the kind of restaurant business you want to operate. Each model has various demands for establishment, cost, and functions:
Quick Service Restaurants
Full-Service Restaurants (FSRs)
Cloud Kitchens
Food Trucks
Legal Requirements for Opening a Restaurant
Handling the legal structure is one of the most crucial moves. You should adhere to all rules from different government authorities, including the Ministry of Investment, the Local Municipalities, and the Ministry of Commerce. Major legal demands include:
- Commercial Registration: The first step in granting your company legal status in Saudi Arabia is commercial registration, or CR.
- Foreign Investment License: In order to own 100% of a business, including restaurants, foreigners must obtain a license from MISA.
- Reaching Saudization Quotas: You have to hire a specific proportion of Saudi workers, or "Saudization." The size and nature of your company determine the necessary percentage.
- VAT Registration: You must legally register for VAT (Value Added Tax) with the Zakat, Tax and Customs Authority (ZATCA) if your yearly income exceeds SAR 375,000.
Licenses & Permits Needed for a Restaurant in Saudi Arabia
Once the company is registered officially, you have to acquire particular permits to run legally. These business licenses make sure your restaurant fulfills all protection, health, and functional standards.
- Municipal License: Granted by the neighborhood municipality through the "Balady" platform, this license attests to the fact that the location, layout, and design of your restaurant adhere to all applicable public health and safety standards. Architectural plans must be submitted for approval.
- Food and Health Permits: A health certificate is required for any employee who handles food. Sanitation and hygiene inspections must be passed by the kitchen and areas used for food preparation.
- Civil Defense Approval: To make sure your property satisfies fire safety regulations, the Civil Defense department must inspect and approve it.
- Signboard Permit: Installing an outdoor sign for your restaurant requires a different permit.
Step-by-Step Process to Open a Restaurant
Here is a streamlined overview of how to open restaurant in Saudi Arabia:
Create a Business Plan and Concept
Clearly state the target market, menu, theme, and business model for your restaurant.
Company Registration
Get your Commercial Registration (CR) by registering your business with the Ministry of Commerce. A MISA investment license is also required if you are a foreign investor.
Locate a Place
Select a business district that fits your concept and has plenty of foot traffic and visibility.
Secure an Office/Storefront
Obtain a storefront or office by leasing or buying a property and having the lease contract electronically certified.
Obtain Licenses and Permits
Submit applications for all required licenses, such as the approval of the Civil Defense and Municipal License.
Design and Fit-Out
In accordance with the authorized architectural plans, start the interior design and construction of your restaurant.
Employ and Train Employees
Assemble your group while making sure you fulfill Saudization targets. All employees must possess current health certificates, valid visas, and adequate training.
Marketing and Launch
To draw in your first clients, start a buzz with a robust social media marketing campaign and a grand opening celebration.
Cost of Opening a Restaurant in Saudi Arabia
- Company Formation: This covers administrative, legal, and registration fees. Depending on the business structure, this could be anywhere between SAR 30,000 and SAR 60,000.
- Rent/Lease: The largest expense is frequently the rent or lease. Compared to other cities, Riyadh and Jeddah have much higher rents in desirable areas. A deposit equal to several months' rent may be demanded up front by landlords.
- Fit-out and Interior Design: This covers all interior design, plumbing, and electrical work. A small cafe may cost SAR 300,000, while a large, fine-dining restaurant may cost well over SAR 2 million.
- Kitchen Equipment Investing heavily in commercial-grade kitchen machines, ventilation systems, and other tools is necessary.
- Licenses and Permits: Charges for different types of licenses and permits.
- Staffing and Visas: Expenses associated with recruiting, obtaining visas, and paying your employees' starting salaries.
- Initial Marketing and Inventory: Prior to opening, funds are required for marketing and ingredients.
How Express Business Service Will Help You
- Strategic Planning: We assist you in honing your business concept and drafting a strong plan specifically for the Saudi market.
- Legal and Administrative Support: We take care of all the documentation, including registering the business and securing all required licenses and permits.
- Visa and Staffing Solutions: We assist you in meeting Saudization requirements and assist you in navigating the visa application process for your staff.
- Market insights: To assist you in making wise decisions, we offer useful data on well-liked destinations, consumer patterns, and regional laws.
Working with us allows you to save time, steer clear of expensive blunders, and concentrate on what you do best—creating amazing dining experiences.
How Foreigners Will Set Up Restaurant Business in Saudi Arabia
- Obtain a MISA Investment License :The most important thing for a foreign investor to do is to get a MISA investment license.
- Select a Business Structure: Limited Liability Companies (LLCs) are the most popular business structure among international investors.
- Commercial Registration: You can register your business with the Ministry of Commerce as soon as your MISA license is accepted.
- Visa and residency permits (Iqama): In order to live and work in Saudi Arabia, you must have both a visa to enter the nation and an "Iqama" (residency permit). We can help with all of this.
Popular Locations for Restaurants in Saudi Arabia
- Riyadh: The capital, Riyadh, is a thriving city with a large concentration of government buildings and business establishments. It's the perfect place for full-service restaurants and fine dining.
- Jeddah: A popular tourist destination, Jeddah is renowned for its lively culture and charming coastal setting. It's a fantastic location for cafes, informal dining, and creative ideas.
- Khobar/Dammam (Eastern Province): The Eastern Province's Khobar/Dammam is a significant oil industry hub with a sizable expat population that provides a varied clientele for a range of culinary specialties.
Benefits of Running a Restaurant Business in Saudi Arabia
High Profit Potential
There is a sizable chance for profitability due to the expanding market and high consumer spending.
Strong Government Support
A Wide Range of Clientele
Strategic Location
Challenges & Tips for Success in the Saudi Food Industry
- Intense Competition: A distinctive idea and powerful branding are crucial in this crowded market.
- Managing Regulations: The administrative and legal procedures can be intricate. It is strongly advised to work with a qualified consultant.
- Cultural Sensitivity: Success depends on knowing regional traditions, eating customs, and, in some places, gender segregation.
- Hiring and Retention: The Saudization policy may make it difficult to find qualified employees who are a good fit for your company.
Frequently Asked Questions & Answers
No, foreigners can now own 100% of their restaurant business in Saudi Arabia thanks to recent reforms associated with Vision 2030. International investors now find it much easier to enter the Saudi market without a local sponsor thanks to this reform.
In Saudi Arabia, the price of starting a restaurant can vary greatly. A large, upscale restaurant could easily cost more than SAR 2 million, while a small cafe might cost between SAR 300,000 and SAR 700,000. In addition to ongoing expenses like rent, payroll, and inventory, this also includes one-time costs like business formation, licenses, fit-out, and equipment.
Opening a restaurant business in Saudi Arabia can take a variety of time frames, but with expert assistance from a consultancy like Express Business Service, the process can be finished in a few months. Obtaining the Commercial Registration (CR), the MISA license for foreigners, and the municipal permits—all of which need numerous inspections and approvals—are typically the most time-consuming steps.
Navigating the intricate legal system and adhering to cultural norms are the two biggest obstacles. You have to hire a certain proportion of Saudi nationals in order to comply with Saudization policies. You should also be aware of local customs, such as prayer times, and make sure that all food served is Halal. Success depends on having a solid grasp of these elements.
Yes, businesses that specialize in helping both domestic and international entrepreneurs with business setup are consultancies like Express Business Service. From starting business planning and company registration to acquiring all required permits and visas, they can assist you with everything. Working with an expert can help you avoid common mistakes and save time and money.
