Saudi business and economy
International Monetary Fund predicts economic growth
The International Monetary Fund (IMF) expects Saudi Arabia's non-oil growth to strengthen to 2.9 per cent based upon an increase in government spending and public confidence. While the IMF forecasts an ultimate decline by the end of 2019, it also predicts that it will swing back into positive in 2020. Unemployment among Saudi nationals remains high at 12.5 per cent, but it has nonetheless decreased based upon ongoing government reforms.
Arabian Business – 20 July 2019
General legal developments
Neom freezone visas announced
Neom investors and employees are set to be able to move freely between several Red Sea countries, including Egypt and Jordan. Saudi Arabian and United Kingdom authorities have established a joint committee in order to introduce a visa-free document whose holders will not be subject to Saudi law, but who will have visa and residency rights.
Arabian Business – 30 May 2019
New cigarette import rules announced
Set to come into force on 23 August 2019, the new customs rules state that cigarettes that do not bear tax stamps will not be permitted to enter the Kingdom. The rules also restrict the amount of tobacco that may be brought into the Kingdom by adult visitors. Beginning in November 2019, the sale or circulation of unstamped cigarette packs will result in penalties.
Saudi Gazette – 18 June 2019
Foreign ownership caps eliminated by CMA
The Capital Markets Authority (CMA) has removed the 49 per cent foreign ownership cap on public companies. Unaffected by the CMA's rule change are qualified foreign investors and ownership limits by other regulatory bodies. Under the rule change, foreign investors will be permitted to increase investment in certain sectors, but will be required to maintain that ownership for at least two years.
The two-year requirement will not apply retroactively to pre-existing investments unless they are increased.
Arabian Business – 26 June 2019
Foreign accountants to be required to register
The Saudi Organisation for Certified Public Accountants (SOCPA) is collaborating with the Ministry of Labor and Social Development (MLSD) in order to establish a compulsory professional registration regime for foreign accountants. SOCPA's new registration system will be linked to work permits issued to foreign accountants by the MLSD.
Al-Eqtisadiah – 12 July 2019
New Government Tenders and Procurement Law issued
The Council of Ministers has approved a new Government Tenders and Procurement Law, replacing the previous law issued in 2006.
Check back for a more in-depth review once the law has become available.
Al Arabiya – 16 July 2019
Reuters – 16 July 2019
New E-Commerce Law issued
The draft E-Commerce Law has been passed by the Council of Ministers. The new law comes as part of another 39 initiatives designed to enhance infrastructure and payment systems, along with postal and logistic services. The Minister of Commerce and Investment has stated that e-commerce is one of the pillars of Vision 2030 and that Saudi Arabia is one of the 10 fastest growing e-commerce markets in the world, having over 30 per cent growth each year.
Check back for a more in-depth review of the new law.
Asharq Al-Awsat – 10 July 2019
Fees for obtaining licence to operate businesses around the clock announced
The Council of Ministers recently announced that businesses would be permitted to remain open and conduct commercial activities 24 hours a day, seven days a week, in exchange for fees specified by the Minister of Municipal and Rural Affairs (MOMRA). Sources have indicated that such fees will not exceed SAR 100,000. The official fee announcement is set to be issued in late October.
While the announcement sparked speculation that new rule would eliminate mandatory closure during prayer times, this has been met with official denials.
Okaz – 24 July 2019
Saudi Gazette – 23 July 2019
Bloomberg – 18 July 2019
New contractor classification system set to be introduced
MOMRA has announced that it will issue a five-level contractor classification for activities related to construction and maintenance, with Level 1 being reserved for megaprojects and Level 5 being reserved for small projects. The new system will begin being applied next month and will provide for an online system whereby contractors will be able to share their records with the relevant governmental authorities.
The new classification system will be consistent with the National Classification System for Economic Activities, which is itself consistent with the UN Economic and Social Council's International Standard Industrial Classification of All Economic Activities, Rev. 4 (ISIC4).
ConstructionWeekOnline – 23 July 2019
Al Eqtisadiah – 19 July 2019
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