In a landmark decision signalling a new era for Saudi Arabia, the Kingdom will begin licensing alcohol in select locations from 2026. While the reform will not equate to open alcohol sales, it represents a pivotal step in Saudi Arabia’s broader transformation strategy. For international businesses, particularly in tourism, hospitality, and entertainment, this policy shift opens new avenues for investment and opportunity.
The announcement that approximately 600 venues will be permitted to serve alcohol under strict regulation marks a significant departure from decades of prohibition. The decision aligns with Saudi Arabia’s Vision 2030 agenda, which seeks to diversify the economy, attract foreign direct investment, and boost tourism revenue. Until now, alcohol consumption has been banned in all forms, with harsh penalties for violations. From 2026, this controlled relaxation reflects the Kingdom’s intent to reshape its global image and cater to a broader range of international visitors.
Saudi Arabia’s decision is not happening in isolation. The policy is one of many reforms designed to elevate the Kingdom’s international appeal. In 2023, the Saudi Tourism Authority launched targeted initiatives to grow inbound tourism. By 2030, the Kingdom aims to welcome 150 million tourists annually.
The upcoming Expo 2030 in Riyadh and the 2034 FIFA World Cup are cornerstones of this strategy. Both events will spotlight Saudi Arabia on the world stage, demanding world-class infrastructure, accommodation, and visitor services. Licensing alcohol, even in a limited format, supports a more familiar experience for international delegates, media, and VIPs attending these events.
While the Kingdom will retain tight regulatory control, the implications for business are significant. Foreign companies operating in hospitality, F&B, luxury travel, and event management are expected to see new licensing and partnership opportunities. Here are key areas of growth:
The reform acts as a beacon for foreign investors. It signals seriousness about meeting global hospitality standards without compromising on local governance. It’s a balancing act, and Saudi Arabia appears ready to walk that line.
It is crucial for potential investors to understand what this reform does not mean:
These clarifications highlight the Kingdom’s commitment to reform without compromising its foundational values.
Yes. Starting in 2026, licensed venues, an estimated 600 locations, will be permitted to sell alcohol under strict conditions.
Tourists will be able to consume alcohol, but only within licensed venues such as certain hotels, private clubs, and international zones.
Saudi Arabia is making sweeping infrastructure, policy, and regulatory reforms. These include streamlining business setup processes, expanding tourist visas, and selectively easing social restrictions to improve the international visitor experience.
What we are seeing is not a sudden shift, but a deliberate recalibration. For international businesses, particularly those who’ve hesitated due to perceived restrictions, this is a signal worth paying attention to.
If you are exploring expansion opportunities in Saudi Arabia, now is the time to act. Peninsula offers tailored strategic and regulatory guidance to help you establish or scale your presence in the Kingdom.
Contact us today for a free consultation.
Alistair Paine brings 15 years of dedicated experience in Saudi market entry, guiding Fortune 500 companies and innovative scale-ups through successful establishment in the Kingdom. His expertise in Saudi company formation, licensing and market entry strategy, positions him as a leading authority and consultant in international business expansion to Saudi Arabia.
Schedule a free consultation with Alistair and the Peninsula team to understand which market entry strategy is best suited to your business setup in Saudi Arabia.
Email: Alistair@peninsulacs.com
