1. Saudi Arabia export overview
The Kingdom of Saudi Arabia is the largest economy in the Arab world. It accounts for 25% of the Arab world’s Gross Domestic Product (GDP).
Saudi Arabia has an oil based economy with strong government controls over major economic activities. The Kingdom possesses around 25% of the world’s oil reserves, and plays a leading role in Organization of the Petroleum Exporting Countries (OPEC).
The petroleum sector accounts for roughly:
80% of budget revenues
45% of GDP
90% of export earnings...
2. Challenges
A physical presence is very important when establishing a business in Saudi Arabia.
Challenges include:
Identifying suitable sponsors for initial entry into the market
Finding an appropriate Saudi partner for joint ventures
Lead time to establish legal entities and obtain licenses from appropriate ministries
Businesses must also employ a certain quota of Saudis to comply with Saudization rules. Saudization (Nitaqat) is a Saudi policy which aims to create better employment prospects for Saudi citizens, and rely less on imported foreign labor.
You must take a great deal of care when establishing payment terms with private and government entities in Saudi Arabia in order to help ensure you get paid on time. Saudi Arabia is ranked in mid table in the World Bank’s ranking for contract enforcement (https://www.doingbusiness.org/en/data/exploretopics/enforcing-contracts).
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