The Saudi Ministry of Hajj and Umrah has announced seven major rules for companies offering services to international pilgrims. These new conditions aim to improve quality, accountability, and transparency in the Umrah service sector. Each license granted under the new system will be valid for five years and can be renewed only if the company continues to meet the ministry’s standards.
7 New Rules for Umrah Operator Companies
| No. | Rule / Condition | Description | Key Details |
|---|---|---|---|
| 1 | License Duration | New licenses will be valid for five years. | Renewable only if all ministry requirements are met. |
| 2 | Full Saudi Ownership | Only 100% Saudi-owned entities can apply. | Must be a registered company or sole proprietorship. |
| 3 | Minimum Capital | Companies must have at least 500,000 SAR in capital. | Equal to about Rs. 37.5 million; must include Umrah service activities. |
| 4 | Bank Guarantee | Firms must submit a 2 million SAR unconditional bank guarantee. | Issued by a Saudi Central Bank–approved bank; must stay valid throughout the license term. |
| 5 | Operational & Management Plan | Applicants must submit an operational plan and ensure independence. | Must avoid market overlap, employ separate staff, and provide audited financials. |
| 6 | Violation Penalties | Licenses can be suspended or revoked for rule violations. | Suspension up to 30 days; permanent revocation if not fixed. |
| 7 | Automatic or Ministerial Cancellation | Licenses may be automatically voided or canceled by the minister. | Applies in cases of death, bankruptcy, inactivity, or rule breach. |
100% Saudi Ownership and Capital Requirement
The ministry stated that any company applying for a license must be fully Saudi-owned. It should either be a sole proprietorship or a registered company operating under Saudi law. Additionally, the firm must have a commercial registration with a minimum capital of 500,000 Saudi riyals, equal to around Rs. 37.5 million, and must include the activity of serving Umrah pilgrims and visitors in Madinah.
Mandatory Bank Guarantee for Security
Under the new guidelines, every Umrah service provider must submit a bank guarantee of at least 2 million Saudi riyals, or about Rs. 150 million, to the Ministry of Hajj and Umrah. The guarantee must come from a bank approved by the Saudi Central Bank, remain valid for the entire license term, and automatically renew. It cannot be canceled without official written permission from the ministry itself.
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Operational Plan and Independent Management
Companies must present a detailed operational plan showing the specific markets they will serve, avoiding overlap with other operators. Each firm must also prove financial and administrative independence, employing its own dedicated staff. Furthermore, companies are required to submit audited financial statements and provide updated information about their management team whenever any changes occur within the organization.
Suspension or Cancellation for Violations
The ministry made it clear that licenses will be monitored closely to ensure compliance with all rules. If a company violates any condition, its license may be suspended for up to 30 days, allowing time to fix the issue. However, if the violation is not resolved within that period, the license can be permanently revoked, removing the firm’s right to provide Umrah-related services in the Kingdom.
Automatic License Termination Conditions
According to the draft regulations, certain situations will lead to the automatic cancellation of a license. This includes the death or legal incapacity of an individual owner, or if a company is liquidated or declared bankrupt. In such events, the heirs, representatives, or liquidators must inform the Ministry of Hajj and Umrah within thirty days to ensure proper administrative handling of the situation.
Minister’s Power to Revoke Licenses
The Minister of Hajj and Umrah holds the final authority to cancel a company’s license under specific conditions. This includes cases where the business is transferred, leased, or fails to begin operations within one year of licensing. The minister can also act if key requirements are no longer met, ensuring that only responsible, qualified companies are allowed to serve pilgrims across Saudi Arabia.
