Mining Investment in Saudi Arabia: Licensing, Company Formation & Regulatory Requirements

Foreign companies accounted for 66% of mining investment and winning licenses issued in 2025, while the number of active exploration companies surged from just six in 2020 to 226 in 2024.

Saudi Arabia is positioning mining as a key pillar of its economic diversification strategy, creating opportunities for international companies across mineral exploration, extraction, processing, and mining-related services.

With the Kingdom seeking to develop its mineral resources and attract foreign investment, global mining companies are increasingly looking at Saudi Arabia as a destination for establishing and expanding their operations.

This guide outlines the key regulatory and business setup considerations for foreign companies planning to invest in Saudi Arabia's mining sector.

Choosing the Right Mining License for Your Business in Saudi Arabia

Saudi Arabia's Mining Investment Law (2020) establishes a structured licensing framework for mining activities, providing a clear regulatory pathway for investors while promoting transparency and confidence in the sector. The framework includes seven license types, each designed to accommodate specific activities, from preliminary mineral exploration to full-scale extraction and supporting infrastructure.

1. Mining License: Allows companies to extract and exploit Class A and B minerals, with rights to sell and transfer the extracted materials. It is the primary authorization for full-scale mining operations.
2. Reconnaissance License: Enables preliminary investigations of mineral-rich areas, including sample collection, to assess their potential before committing to further exploration.
3. Exploration License: Authorizes more targeted mineral exploration and geological assessment using surface and geological methods, typically following initial reconnaissance activities.
4. General Purposes License: Covers the establishment of supporting facilities outside mining sites for mining and small mining license holders, including relevant processing and logistics infrastructure.
5. Building Materials License: Authorizes the extraction of Class C minerals, such as sand and gravel, under a licensing route separate from the main mining license.
6. Small Mining License: Permits the extraction of Class A and B minerals through a licensing framework designed for smaller-scale mining operations.
7. Surplus Raw Materials License: Allows companies to transport and utilize surplus Class C materials generated from sites they already own or operate.

Establishing a Mining Business in Saudi Arabia: Licensing and Setup Process

Establishing a mining business in Saudi Arabia involves coordinating investment registration, company formation, regulatory approvals, and operational requirements.

Stage 1: Establish Your Legal Entity (Month 1)

Before commencing mining operations, foreign investors must establish a legally registered entity in Saudi Arabia and complete the applicable investment registration and company formation procedures. This stage typically takes around one month, depending on the company's structure and documentation requirements.

The process begins with completing the relevant investment registration requirements through the Ministry of Investment (MISA). Companies must then reserve a trade name through the Ministry of Commerce, prepare and notarize their Articles of Association (AoA), and obtain a Commercial Registration (CR).

Following company establishment, businesses must also register with the Chamber of Commerce to complete the relevant corporate formalities.

Stage 2: Activate Your Business and Prepare for Operations (Months 2–3)

Once the legal entity has been established, companies can proceed with activating their operational status and preparing to recruit employees.

This stage involves obtaining the company seal, registering with the Ministry of Human Resources and Social Development, and enrolling with the General Organization for Social Insurance (GOSI) to meet applicable employee insurance requirements.

Companies must also register their National Address and complete the relevant tax registrations with ZATCA, including VAT registration where applicable.

Stage 3: Complete Residency, Banking, and Operational Registrations

The final stage focuses on completing the registrations and administrative requirements needed to support day-to-day business operations.

For an international GM, this includes obtaining health insurance, completing the mandatory medical examination, and securing an Iqama (residency permit).

Once residency requirements have been completed, the company can proceed with activating the relevant government portals and completing its remaining operational registrations.

These include:

• Muqeem: Managing residency and visa-related services
• Absher: Accessing relevant government services through the national digital identity platform
• Qiwa: Managing employment contracts, workforce information, and applicable Saudization requirements
• Mudad: Managing payroll and Wage Protection System compliance

Companies must also activate their Chamber of Commerce account and open a corporate bank account with a Saudi bank.

Completing these requirements establishes the administrative foundation needed to manage employees, process payroll, and maintain ongoing business operations.

Maintaining Compliance After Company Establishment

Establishing a legal entity and completing the initial registrations are only the beginning of operating a mining business in Saudi Arabia. Companies must maintain compliance with applicable corporate, tax, employment, and regulatory obligations throughout their operations.

Tax and Financial Compliance

Companies must maintain accurate financial records and meet their applicable tax and filing obligations with ZATCA.

Depending on the company's ownership structure and activities, these may include corporate income tax, withholding tax, and Zakat obligations.

The applicable rates and requirements depend on the company's circumstances and should be assessed as part of its financial planning.

License and Registration Renewals

Mining businesses must monitor the validity of their mining licenses, Commercial Registration, investment registration, and other applicable permits.

Companies should establish a renewal calendar to ensure that required registrations remain valid and that any changes to their business activities are reflected in their regulatory documentation.

Government Portal Management

Maintaining accurate and up-to-date information across government platforms is essential for operational continuity.

Companies should regularly review their records across Muqeem, Qiwa, Mudad, and other relevant portals to ensure that employee, residency, and payroll information remains consistent.

Payroll and Employment Compliance

Mining companies must comply with Saudi labor regulations when recruiting and managing their workforce.

This includes maintaining accurate employment contracts, processing salaries in accordance with applicable requirements, and meeting relevant payroll and employee insurance obligations.

Saudization and Workforce Localization

Companies must also comply with applicable Saudization requirements under the Nitaqat program. The required localization levels depend on factors such as company size, sector, and occupational categories.

Failure to meet the applicable requirements may result in restrictions on certain employment services, difficulties obtaining work permits, and potential penalties.

Incorporating workforce localization into the initial hiring and operational strategy can help reduce compliance risks as the business expands.