Licensing Furnished and Serviced Apartments: Which Route Suits the Apartment Owner?
Published
If you own a building or several apartments and want to rent them for short stays, the first question is not about furnishing or platforms, but about the regulatory route: will you obtain a hospitality establishment licence? Will you contract with a licensed company? Or do your units fall under the private-unit permits for individuals?
Each route has its own conditions and limits. This article helps you identify your route before you spend on fit-out.
First: is your activity tourist accommodation or residential renting?
The Tourism Hospitality Facility Regulation (لائحة مرفق الضيافة السياحي), published in September 2026, defines a facility as any place that provides overnight accommodation to tourists for a fee, and provides that it may not be operated without a licence. Its fee schedule lists “serviced apartments and holiday homes” among the types.
Long-term residential renting, on the other hand, falls under a different framework from hospitality facilities. If you are planning a mix of short and monthly stays, decide this early, because it determines the route.
Route one: an establishment licence for serviced apartments
This route suits those who want to operate the building as a single hospitality facility under the name of an establishment.
What it requires under the regulation:
- The licensee must be a person with legal personality, that is, an establishment.
- A valid commercial registration that includes the activity of operating a tourism hospitality facility, a municipal licence, a Civil Defence permit, and a subscription to the Shomoos system.
- A connection to the tourism monitoring interfaces, and meeting the basic classification standards for the type and category.
- After licensing, compliance with the operational classification standards and supervision of all units.
It suits you if: the building is wholly or mostly dedicated to short stays, you are ready to set up an establishment or already have one, and you want to operate it yourself or with a team you appoint.
We explained the documents, classification and renewal in detail in our guide to hospitality facility licensing and classification.
Route two: contracting with a licensed company
If you do not want to set up an establishment and manage the licence yourself, you can contract with an operating company:
- Under a lease: the company leases the building and operates it under its own name and licence, and you receive rent.
- Under a management contract: the revenue and risk usually stay with you, and the contract specifies who holds the facility licence.
In both cases, pay attention to two points:
- The Regulations for the Management of Tourism Hospitality Facilities (لائحة إدارة مرافق الضيافة السياحية) require a licence for whoever carries out the management activity; ask the company for its licence number and category.
- The Tourism Hospitality Facility Regulation requires the licensee to supervise the units and control their operation, and prohibits it from enabling others to use the licence in an unlicensed facility. So the licence holder must be consistent with whoever actually runs the operation.
Compare the two models in Management, lease or franchise.
Route three: private-unit permits for individuals
The Private Tourism Hospitality Facility Regulation (لائحة مرفق الضيافة السياحي الخاص; Ministerial Decision 2295) governs a self-contained furnished property unit that is owned by an individual, or leased to them under an electronic contract, and rented out for nightly stays. Its provisions, as set out in the version published on the Ministry of Tourism website, include:
- The applicant must be a Saudi national.
- The unit must be within a property designated for residential or agricultural use.
- In a jointly owned property, the other owners must not object to daily renting.
- The total number of permits issued to one person in a single property may not exceed three.
- If the applicant's permits exceed eight, a valid contract with an establishment licensed to manage tourism hospitality facilities is required.
- A permit is valid for no more than one year.
What this means for the owner of a whole building: this route is designed for a limited number of individuals' units, and the permit limit per property usually makes it unsuitable for operating a whole building. The details of this route are in Holiday home and private unit permits.
Comparing the routes
| Aspect | Establishment licence | Contracting with a licensed company | Private-unit permits |
|---|---|---|---|
| Who holds the licence | Your establishment | The operating company or you, depending on the contract | The individual who owns the unit |
| Suitable for a whole building | Yes | Yes | Limited by the number of permits |
| Your effort on procedures | High | Low to medium | Medium |
| Classification and operating obligations | On you | On the licensee, depending on the contract | On the permit holder |
| Licence term | Up to 3 years | According to the company's licence | Up to one year |
Questions that determine your route
- How many units do you want to operate? And are they in a single property?
- Are the units owned by you as an individual or by an establishment?
- Do you want to manage the licence and the operation yourself?
- Is your activity short stays only, or a mix with monthly rentals?
- Do the property's other owners, if any, accept daily renting?
Common mistakes
- Starting the furnishing and platform listings before deciding the regulatory route.
- Assuming that private-unit permits work for a whole building.
- Contracting with an operating company without checking its licence for the management activity.
- Not specifying in the management contract who holds the facility licence.
Frequently asked questions
Do I need a licence to rent a furnished apartment by the night?
Overnight accommodation for tourists for a fee falls within tourism hospitality facilities, and operating without a licence or permit, depending on the type of facility, is not allowed. Identify the right route for your situation and check the current requirements with the Ministry of Tourism.
Can I operate my building with private-unit permits?
Under the published version of the private facility regulation, the total number of permits for one person in a single property may not exceed three. So this route suits a limited number of units, and usually not a whole building.
If I lease the building to an operator, who needs the licence?
The operator that runs the facility is usually the licensee. Specify this explicitly in the contract.
What is the regulatory difference between serviced apartments and furnished apartments?
What matters from a regulatory point of view is the nature of the activity: overnight accommodation for tourists for a fee. The regulation's schedule lists “serviced apartments and holiday homes” as a type of hospitality facility. Check the right classification for your project with the Ministry.
Next step
If you own a building and are considering the right route for operating it, you can contact the Mirada team with your questions.