By Adil Ahmad, Business Setup Consultant at Gulf Corporate Services
Summary
Starting a taxi business in Saudi Arabia means registering a company, getting a Transport General Authority (TGA) licence through the Naql platform, and meeting fleet rules: at least 5 vehicles for a public taxi outside contract cities and 20 for a private taxi. A small fleet needs roughly SAR 450,000 to 700,000 in year one. This guide covers licences, costs, driver rules, and profit.
Taxi Business in Saudi Arabia: Key Facts at a Glance
| Item | What you need to know |
|---|---|
| Regulator | Transport General Authority (TGA) |
| Licensing platform | Naql |
| Current rules | TGA taxi regulation published 2 September 2025 |
| Public taxi fleet minimum | 5 vehicles in non-contract cities; by contract in Riyadh, Makkah, Jeddah, Madinah, Dammam |
| Private taxi fleet minimum | 20 vehicles |
| Licence validity | 3 years, limited to the city of issue |
| Driver requirement | Professional driver card for every driver |
Why Start a Taxi Business in Saudi Arabia Now
Demand for transport in the Kingdom keeps rising with tourism, Umrah traffic, mega projects, and the growth of Riyadh and Jeddah under Vision 2030. At the same time, TGA has tightened rules, which pushes out unlicensed operators and rewards organised, compliant fleets.
- Strong airport, hotel, and event demand in major cities
- Government push for app-based, tracked, and metered transport
- Room for niche services such as women-friendly, corporate, and tourist transport
- Financial leasing of vehicles is allowed, which lowers upfront capital
If you are still comparing sectors, our guide to investment opportunities in Saudi Arabia is a useful starting point.
Types of Taxi Licence in Saudi Arabia
Under the TGA taxi regulation, each activity needs its own licence:
- Public taxi: street and rank taxis with meters. In big cities, this activity is tendered by contract.
- Private taxi: pre-booked rides, including cars dispatched through ride-hailing apps.
- Airport taxi: pickups from airports, with approval from the airport operator.
- Taxi mediation (brokerage): arranging rides on taxis owned by others.
- E-hailing mediation: running your own booking app that connects passengers with licensed taxis.
For most new investors, a private taxi company or a public taxi company in a smaller city is the realistic entry point.
Choosing the Right City for Your Taxi Company
Your city decides both the licence route and the budget. A taxi company in Riyadh, Jeddah, Makkah, Madinah, or Dammam competes for public taxi contracts, so new entrants usually start with private taxis there. Cities such as Abha, Tabuk, Taif, Hail, and Al Ahsa need only 5 cars for a public taxi licence, with lower rent and less app competition. Check current rules and announcements on the Transport General Authority website before you choose.
Taxi Licence Requirements in Saudi Arabia
To get a TGA taxi licence, your establishment must:
- Hold a valid commercial registration (CR) that includes the taxi activity
- Own vehicles or lease them under a financial lease, with the company as the actual user
- Meet the fleet minimum for your activity and city
- Make at least 2% of the fleet suitable for wheelchair users and elderly passengers, with a minimum of one vehicle
- Operate a suitable office in the licensed city
- Connect to TGA electronic systems, including tracking
- Hold valid GOSI and zakat certificates
TGA can issue a restricted licence for 60 days while you complete these conditions, but you cannot carry passengers on it. Also see our overview of the transportation license in Saudi Arabia.
Can Expats and Foreign Investors Own a Taxi Business in Saudi Arabia?
This is the most common question I get from residents. The short answer is yes, but not cheaply.
- Saudi nationals and GCC citizens can open a taxi establishment directly with a CR.
- Foreign companies register with MISA first. MISA’s Investor Guide sets activity conditions, and land transport has historically required around SAR 10 million in capital, international experience, and presence in several markets.
- Expat residents (Iqama holders) generally cannot own a taxi business in their personal name. Options include a foreign-owned company, a Premium Residency, or partnering with a Saudi investor.
Read our foreign ownership rules guide and the MISA license page before you commit.
How to Register a Taxi Business in Saudi Arabia: Step-by-Step
- Choose your activity, city, and fleet size, and prepare a feasibility study.
- Form your company, usually an LLC in Saudi Arabia or a one-person LLC.
- Obtain your CR from the Ministry of Commerce. See our guide to company registration in Saudi Arabia.
- Register with GOSI, ZATCA, Qiwa, and the Chamber of Commerce.
- Lease your office and parking, and obtain the municipality licence.
- Apply for the TGA licence on the Naql platform.
- Buy or lease vehicles, install meters and tracking, and get an operating card for each car.
- Hire drivers and issue a professional driver card for each one.
- Integrate with booking apps or launch your own dispatch system.
With documents ready, most investors finish in 8 to 14 weeks.
Documents Required for a Taxi Company Licence
- Commercial registration and articles of association
- National ID or Iqama of the owner and manager
- Office lease and municipality licence
- GOSI and zakat certificates
- Vehicle registration (istimara), insurance, and periodic inspection (Fahas)
- Driver licences, medical reports, and training certificates
- For foreign investors: attested parent company documents and MISA registration
Taxi Driver Requirements: Professional Driver Card and Saudization
Every driver needs a TGA professional driver card, issued through Naql. According to Saudi Gazette, drivers need:
- A valid Saudi driving licence
- A TGA medical examination
- A clean criminal record certificate
- A TGA-approved training certificate
The card is valid for one year and must be renewed 30 days before expiry. Airport drivers also need airport approval.
Saudization matters too. Ride-hailing apps can only dispatch private taxis driven by Saudi nationals, while public taxis are exempt from that rule. Your Nitaqat band on Qiwa also controls how many expat visas you can obtain. Review Saudi labour laws for expatriates before hiring.
How Much Does It Cost to Start a Taxi Business in Saudi Arabia?
Here is a realistic first-year budget for a 5-car public taxi company in a non-contract city. Figures are approximate market estimates.
| Cost item | Approx. cost (SAR) |
|---|---|
| CR, chamber, municipality, and registrations | 5,000 |
| 5 sedans at about SAR 85,000 each | 425,000 |
| Meters, tracking, and branding | 20,000 |
| Comprehensive insurance | 22,500 |
| Office and parking for 12 months | 40,000 |
| Driver cards, recruitment, and visas | 15,000 |
| Dispatch software, year one | 15,000 |
| Working capital for 3 months | 90,000 |
| Total | about 632,500 |
A 20-car private taxi fleet usually needs SAR 1.8 million to 2.5 million. Leasing vehicles can cut upfront spend by 60% or more. For general company costs, see our guide on the cost of setting up a business in Saudi Arabia.
Is a Taxi Business Profitable in Saudi Arabia?
It can be, but margins depend on utilisation. As a planning example, a car earning SAR 450 a day for 26 days brings in about SAR 11,700 a month. After driver pay, fuel, maintenance, insurance, and app commission of roughly SAR 8,500 to 9,500, profit per car is modest. Profit grows with:
- Running two shifts per car
- Airport, hotel, and corporate contracts
- Lower-cost hybrid vehicles
- Good driver retention and fewer idle days
Track cost per kilometre and revenue per shift every week. It is the fastest way to spot an underperforming car or driver.
Taxi App and Ride-Hailing Options
You do not need to build an app on day one. Many private taxi companies partner with Uber, Careem, Jeeny, or Bolt as fleet operators. If you want your own brand, an e-hailing mediation licence lets you run a booking platform. If you also operate in the UAE, see our guide to starting an Uber business in Dubai.
TGA Fines and Common Mistakes to Avoid
TGA rules updated in late 2025 include fines, vehicle impoundment of 20 to 60 days, and deportation for non-Saudi drivers who break the rules. Avoid these mistakes:
- Buying vehicles before confirming the fleet minimum for your city
- Letting driver cards or operating cards expire
- Hiring expats for roles that apps reserve for Saudi drivers
- Running without tracking or approved fares
- Ignoring VAT registration once revenue passes SAR 375,000
Expert tip from Adil Ahmad: Start with a small public taxi licence in a non-contract city or a leased private fleet tied to app contracts. Prove utilisation first, then expand. Our GRO services team can manage Naql, Qiwa, and renewals for you.
FAQs on Starting a Taxi Business in Saudi Arabia
How much does it cost to start a taxi business in Saudi Arabia?
A 5-car public taxi company needs roughly SAR 450,000 to 700,000 in year one. Leasing vehicles reduces the upfront cost.
How much is a taxi licence in Saudi Arabia?
TGA does not publish a single fixed fee. Government fees are small compared with vehicle, insurance, and office costs.
How do I register a taxi business in Saudi Arabia?
Get a CR, register with GOSI and ZATCA, apply for a TGA licence on Naql, then issue operating cards and driver cards.
How many cars do I need for a taxi licence?
At least 5 for a public taxi in non-contract cities and 20 for a private taxi.
Can an Iqama holder start a taxi business?
Not in a personal name. You need a foreign-owned company, Premium Residency, or a Saudi partner.
Can expats work as taxi drivers in Saudi Arabia?
Yes for many public taxi roles, with a work visa and driver card. App-dispatched private taxis are limited to Saudi drivers.
How long is a TGA taxi licence valid?
Three years, and only in the city where it was issued.
Can I run an app-based taxi service?
Yes, with a private taxi licence partnered with apps, or an e-hailing mediation licence for your own platform.
Which city is best for a new taxi company?
Smaller non-contract cities are easiest to enter with 5 cars. In Riyadh and Jeddah, start with a private taxi fleet linked to apps.
What happens if I operate without a TGA licence?
You face fines, vehicle impoundment, and possible deportation for non-Saudi drivers.
Taxi Business Setup Support in Saudi Arabia
From MISA registration to Naql approvals, our team handles end-to-end business setup in Saudi Arabia, including VAT registration and visas. Speak with our business setup consultants for a free, itemised taxi company plan. Also exploring the UAE? See business setup in Dubai.
