In order to obtain a license to conduct banking, insurance, financial leasing or securities activities, an applicant must satisfy the relevant regulator that it meets the conditions set out by the regulator.

The threshold conditions can vary depending on the particular regulated activities that the applicant intends to carry on and, in particular, whether the applicant will be CMA- or SAMA-authorized. Broadly, however, the following conditions will need to be satisfied:

• Location of offices – For Saudi-incorporated companies, both the management and head office must be located in Saudi Arabia. This can have implications for the composition of the board of directors so that a majority of the board will need to be resident in Saudi Arabia and the administrative center will also need to be located in Saudi Arabia.
• Effective Supervision – The applicant must be capable of being effectively supervised. This emphasizes the need for firms to have a substantive presence in Saudi Arabia that is accessible to the Saudi Arabian regulators and enables the regulator to supervise the firm. The regulator will also consider whether there are any impediments to the supervision of the applicant, including the group structure and any relevant laws restricting access to information.
• Appropriate resources – Applicants must satisfy the regulator that they have adequate resources to carry on the relevant regulated activities. Resources include financial resources as well as human resources (including management with the required skills, qualifications and integrity) and infrastructure.
• Suitability – The requirement is that applicants must be fit and proper to be authorized, having regard to all the circumstances.
• Business model – The regulator will examine the applicant’s business model. In addition to understanding the economic aspects of the business, the impact of the model on consumers and on the Saudi economy will also be considered.