Umrah Monopoly: Riyadh Rejects Foreign Operators with New Financial Walls

The Saudi Ministry of Hajj and Umrah has announced a sweeping overhaul of its licensing requirements for companies that provide Hajj and Umrah services to international pilgrims. These seven new regulations, published on the "Istitlaa" consultation platform, are set to profoundly change how Umrah packages are structured and sold globally, creating a new operational reality for UK, USA, and other international Umrah travel agencies.

The new policy dictates that only companies that are fully Saudi-owned and registered as a sole proprietorship or a company will be eligible for a license. The requirements impose a substantial financial barrier to entry, mandating that service providers must hold a commercial registration with a minimum capital of 500,000 Saudi riyals (approximately $133,000 USD / £107,000 GBP).

Crucially, each licensed company will be required to submit an unconditional final bank guarantee of at least 2 million Saudi riyals (approximately $533,000 USD / £430,000 GBP) in favor of the Ministry. This guarantee, which must be issued by an approved local bank, is designed to protect pilgrims and the Ministry, ensuring financial stability and accountability. It will remain valid and automatically renew throughout the five-year license period and cannot be canceled without the Ministry’s written approval.

Impact on UK, USA, and International Umrah Operators

The direct impact of these rules is that foreign-owned companies in countries like the UK and USA can no longer directly hold a license to operate services for pilgrims once they arrive in the Kingdom. Instead, international agencies will now be compelled to work exclusively with the newly licensed, fully Saudi-owned operators.

This shift moves Saudi Arabia toward a centralized, regulated structure, increasing the cost of entry for service providers while simultaneously aiming to boost the quality and accountability of pilgrim services under the Kingdom’s Vision 2030 objective. For international operators, this means a significant restructuring of their business model, as their role transitions from direct service providers within Saudi Arabia to purely booking and travel agents outside the country, relying heavily on their Saudi partners.

Upcoming Change That May Come Into Effect Soon

Beyond the operator licensing, a critical related change that has recently come into effect or is soon to be finalized is a major change to Umrah visa entry validity. The Ministry of Hajj and Umrah is enforcing a rule where the Umrah visa's validity for entry is shortened from three months to one month from the date of issuance. If a pilgrim does not enter the Kingdom within 30 days of the visa being issued, the visa is automatically canceled. This tightens the travel window and requires more precise planning from international operators and pilgrims alike.

Strengthening Financial Oversight and Operational Independence

To secure the five-year, renewable license, applicants must also provide an approved operational plan detailing their markets to prevent overlap and ensure efficient service distribution. The Ministry is demanding strict financial and administrative independence, requiring firms to employ separate staff from any other businesses and submit fully audited financial statements. The license can be temporarily suspended for violations, with a 30-day window for rectification, or permanently revoked for serious breaches such as transferring or leasing the license. These measures collectively establish a higher standard for professionalism, transparency, and consumer protection in the religious tourism sector.