Exporting to Saudi Arabia
The chief route to investment is via the Saudi Arabian General Investment Authority (SAGIA) formed in 2000. Under the Foreign Investment Law overseas businesses and individuals are entitled to 100 per cent ownership of projects, and legislation allows them the same conditions as Saudi companies. However, there are some restrictions on foreign companies.
Foreign businesses do not need to appoint a commercial agent in order to operate in Saudi. Companies can sell direct to Saudi Arabian companies from outside the country. Nevertheless, appointing an agent or distributor is the most common means of breaking into the market. These relationships are regulated by the Ministry of Commerce and firms are allowed to have more than one agent on a regional basis. Agency agreements need to be agreed with the ministry. Virtually all government purchasing is done by means of local tenders and in most instances only Saudi- companies can bid, so this is one area where an agent is essential.
Like anywhere else, it is important to appoint the right agent and establish clearly which services this agent will provide. It is highly recommended meet up with any prospective agent at their premises before signing a deal, and that you seek experienced legal advice also. Chamber International can advise with these matters, and introduce you to suitable law firms on request.
There is a five per cent customs tariff on most exports to Saudi Arabia and also a “protective tariff” of 12 or 20 percent to protect local businesses in many cases. Typically, corporate taxes of 20% apply to foreign companies and, though there have been no personal taxes in the past, there are plans to introduce a VAT regime in 2018.
There are restrictions on goods such as weapons, pork, alcohol, pornographic material and other items. Some goods such as pharmaceuticals, wireless equipment, veterinary medicines, pesticides and military uniforms have to be registered. More details are available from the Department for Business and Trade (DBT) team in Saudi Arabia.
The documents required for exports are Arab Certificate of Origin (authenticated at a local Chamber of Commerce and translated into Arabic), Saudi Arabian Customs Invoice, an authenticated invoice (in triplicate), clearly stating the country of origin, name of the carrier, brand and number of goods, and a clear description of the goods, including weight and value. Also required are a Bill of Lading, insurance documents and Saudi Arabian Standards Organisation (SASO) Certificate of Conformity, issued by an approved certification body in the UK such as Intertek.
Visas are required by all visitors to the country except nationals of Gulf Co-operation Council states. Visitors should have a passport with at least 6 months validity after the date they plan to leave Saudi Arabia. Travellers are sometimes caught out with visa expiry because these are issued in accordance with the Muslim Hijra calendar, not the Western Gregorian, and months are shorter. Those overstaying face fines or jail.
You may be refused entry to Saudi Arabia if your passport contains evidence of previous travel to Israel.
Business visas are required for those taking part in trade missions. If you don’t have a Saudi sponsor you will need a letter of attestation from the Chamber of Commerce or Arab-British Chamber of Commerce in London. The Saudi Embassy in London can be unpredictable in issuing visas and travellers are advised to allow six weeks to complete the process.
On 29 March 2016 the Saudi authorities introduced a requirement for ‘Business Introduction Letters’ which must be certified and accompany business visa applications submitted to the Royal Embassy of Saudi Arabia. Chamber International can provide this certification service for you – please contact our Trade Procedures Team on 0845 034 7200 or email for further information.
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