Do you want to be part of the booming restaurant business in Saudi Arabia?
While it is a lucrative venture, opening a restaurant in any part of the world is no easy feat. The same goes true for opening a restaurant in Saudi Arabia.
There are a lot of requirements to open a restaurant in Saudi Arabia before you can open your doors to the public and start your business properly.
To help get you started we put together this post of what are the requirements to open a restaurant in Saudi Arabia.
But first, why should you consider opening a restaurant in Saudi Arabia at all?
Why Open a Restaurant in Saudi Arabia?
The largest economy in the Middle East is Saudi Arabia. It is also quite open to international investment, ranking 62 out of 190 countries in the World Bank’s Doing Business Index. Saudi Arabia outranked its neighboring Gulf countries such as Oman and Qatar.
Moreover, Saudi Arabia’s tax structure, with its low sales tax and negligible income taxes, is a key draw for foreign businesses.
The food industry in the Kingdom of Saudi Arabia is grand, to say the least. Being part of the industry promises a high reward if you consider how the industry looks.
According to statistics:
- It is estimated that Saudi Arabia’s foodservice market will grow to approximately $13.7 billion by the year 2025 from the already astounding $11.6 billion in 2019.
- In 2015 there were 15,000 fast food outlets.
- More than 11,000 full-service restaurants were counted in 2015.
- Statistics also show that there were a little over 8,000 cafes in the year 2015.
With the industry flourishing the prospects of your restaurant turning into a successful venture is fairly great and therefore considering opening a restaurant in Saudi Arabia can be favorable.
Opening a business and living in the Kingdom of Saudi Arabia also has its perks. Saudi Arabia is known to be both a stable and safe environment to live in, especially for expatriates. The country is known to have low crime rates.
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Bodies That Set Requirements to Open a Restaurant in Saudi Arabia
Certain circumstances differ the requirements you need to set up and run a food business or restaurant in Saudi Arabia.
The first consideration when opening a restaurant in the Kingdom is whether you are doing so as a foreign investor or if you are going to do so through a local sponsor.
If you are planning to start your business as a foreign investor, you will most likely need to go through the Saudi Arabian General Investment Authority. As for a local sponsor, you will be dealing most likely with Commercial Registration.
Starting a restaurant in Saudi Arabia means following permissions and regulations set out by both the Saudi Food and Drug Administration as well as the Ministry of Commerce.
You also need to keep in mind which municipal you will be opening your restaurant in. There are certain differences in the municipal obligations you may have to deal with.
Below we will set out a basic understanding of what are the requirements to open a restaurant in Saudi Arabia.
This information is purely an indication of what regulations you may come across and certain steps you may have to take.
Please keep in mind that this content is given solely for educational reasons and is not meant to be used as legal, accounting, tax, human recourses, or other professional advice. You are solely responsible for adhering to all applicable laws and regulations. For information particular to your exact situation, you should contact a legal representative or other competent counsel.
What are the Procedural Requirements to Open a Restaurant in Saudi Arabia?
As we mentioned certain specifications may be different in light of the exact situation you present to open a restaurant in Saudi Arabia.
Creating the Business
As a foreign investor, the first thing you will have to do to start a food business is to seek approval from the Saudi Ministry of Commerce in the form of a General Investment Entrepreneurial license.
To get this license and approval from the Saudi Ministry of Commerce, it is pertinent that you have adequate funds as well as the capability to be investing in Saudi Arabia.
Registering a Trade Name
When starting a business in Saudi Arabia you will be required to come up with a company or business name and register that name.
When choosing the right name for your restaurant you need to ensure that the name is not blasphemous in any way.
You also want to avoid creating a name that can be construed as offensive in any manner.
Moreover, the trade name you wish to register should not be the same or even too similar to any competitor in the food industry.
To seek approval as a foreign investor, the process requires that you physically be present in the Kingdom of Saudi Arabia.
Furthermore, it is important that when you wish to open a restaurant in Saudi Arabia and apply for a license to trade in Saudi Arabia you will require a valid business visa. This business visa will allow you to work and reside in the Kingdom.
Saudi Arabia Restaurant License
You will also require a license to trade in Saudi Arabia which you will need to apply for.
There is certain documentation that will be needed when you submit your application for a Saudi Arabia restaurant license.
The documents that could be required for this license include the following:
- Proof of address and ID for all shareholders and directors in your company
- Proof of your trade name confirmation
- A bank reference letter
- Articles of Association
- Memorandum of Association
- A copy of the passports of your stakeholders and directors
These are some of the procedural requirements that you may need to meet to register and start your food business and restaurant in the Kingdom of Saudi Arabia.
Apart from this, after your business has been registered and you have a license to open your restaurant, certain physical requirements need to be met.
Here are just a few of the rules and regulations that your restaurant will have to adhere to if you wish to open a restaurant in Saudi Arabia.
What are the Physical Requirements to Open a Restaurant in Saudi Arabia?
There are certain physical requirements in terms of the actual restaurant that need to be adhered to, to open a restaurant in Saudi Arabia.
These requirements may seem particularly stringent but this is because a restaurant is dealing with the distribution of food.
Some of the requirements and policies that you may need to meet are as follows.
Location Requirements for your Restaurant
Since your business is dealing with food there are certain policies as to where you can and cannot open a restaurant.
The location that you choose to open your restaurant must be located either in a commercial Center or at least on a commercial street. You cannot open a restaurant on a residential street.
The size of your location and site is also regulated. If you wish to open a restaurant you cannot choose a venue that is smaller than 65 meters squared.
Where your restaurant is located also has to keep in mind the other shops in the area. There is a prohibition on opening a restaurant less than 25 meters away from a shop that sells gas, or less than 30 meters away from a petrol station.
Venue Requirements for your Restaurant
There are also certain requirements as to your actual restaurant’s layout and building that you need to follow.
The venue of your restaurant should include a warehouse area that must be at least 9 meters squared.
The venue you choose for your restaurant needs to have a preparation or washing room. This room should not be less than 9 meters squared.
The kitchen in your restaurant has to be at least 15 meters squared and needs to be separate from the washing area as well as the dining area. The kitchen needs to be properly ventilated.
If your restaurant is to have a dining area, the area should be more than 30 meters squared. The dining area should also have an adequate number of tables and chairs according to the number of customers you have.
The venue of your restaurant must have a toilet facility and a sink for every ten people. There needs to be a separate toilet in your restaurant for women.
There is a requirement that the toilet in your venue must be an Arab toilet. If your venue has two toilets then one should be an Arab toilet and one needs to be a flush toilet. The toilet should also include a course area of at least 1.2 meters squared.
There are also certain requirements for the way your restaurant is ventilated. These requirements dictate the rate of ventilation for the areas in your restaurant. The requirements are as follows:
- The warehouse of your restaurant must be ventilated at no less than 6 air changes per hour.
- Your washing or preparation room must be ventilated at 15 air changes per hour.
- Similar to the washing or preparation room, the toilets should also be ventilated at 15 air changes per hour.
- The kitchen must be ventilated at a rate of 25 air changes per hour.
Wiring and Electrical Requirements for your Restaurant
When you build your restaurant or choose a building for your restaurant there are certain electrical and wiring policies that need to be observed.
The building’s foundations, as well as any wiring, must be earthed. Saudi regulations for earthing connections must also be followed.
Wiring must have the right kind, color, and diameter, as well as be piped and insulated. Circuit breakers in wet places must be of sufficient strength to prevent earth leakage.
Heaters, stoves, refrigerators, cabinets, ovens, air conditioners, and other electrical equipment must all be safe to operate as well as meet international standards. A competent and authorized specialist must install all electrical installations and equipment. Maintenance to the necessary authorized requirements must be performed regularly.
It is also necessary to provide adequate lighting. Fixtures and enclosures are required for lamps. Non-explosive lamps are required. Wire-hanging lighting is not permitted in your restaurant.
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As we mentioned, this blog is meant as a basic guide explaining what are the requirements to open a restaurant in Saudi Arabia.
Restaurant owners need to adhere to certain requirements from different governing bodies.
These governing bodies include the Saudi Food and Drug Administration for your site and food’s safety as well as business regulations of the Ministry of Commerce.
You also want to keep in mind certain elements when you start your journey towards creating a restaurant in Saudi Arabia.
No restaurant is created in isolation. There are certain considerations to keep in mind. Take the time to do relevant market research.
This market research will help you decide what location to open your restaurant.
The location is not only important in terms of the rules of the physical location that need to be met but also understanding your potential customer base. You also want to choose a location that offers the best visibility for your food business.
Keep in mind the size of your location, the parking, and access facilities, as well as building amenities.
Another important consideration is budget. Your budget will be used to meet procedural requirements to gain relevant licenses to open your restaurant. You also use your available budget to decide on your restaurant’s location and building.
There are a lot of facets to answering the question: what are the requirements to open a restaurant? This is just a basic guide to get you started. We hope this blog helps get the ball rolling for your journey to start your business.