29-Jul-2010
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A BASIC GUIDE TO EXPORTING


 

Geo Features | Political | Economic System | Market Accessibility

LOCATION:
The Kingdom of Saudi Arabia lies at the furthermost part of the south-western Asia. It is bordered to the  west by the Red Sea, to the east by the Arabian Gulf United Arab Emirates and Qatar to, the north by Kuwait Iraq and Jordan and to the south by Yemen and Oman AREA:
The Kingdom of Saudi Arabia occupies about four-fifths of the Arab Peninsula with a total area of over 2,250,000 square kilometers

 
GEOGRAPHICAL FEATURES:

Because of its large area,  the Kingdom has a varied topographical structure.  Along the Red Sea lies the Tihama coasal plain. It is 1,100 kilometers long, 60 kilometers wide in the south and gradually narrows to the north until it reaches the Aqaba Gulf.  To the east of this plain lies a chain of mountains called Sarawat. These mountains rise to 9,000 feet in the south and gradually fall to 3.000 feet in the north.  Several large valleys slope eastward and westward from Sarawat such as Najran Valley Tathleeth Valley,  Bisha Valley,  Himdh Valley,  Rumah Valley, Yanbu Valley and Fatima Valley. To the east of the chain stands the Najd Plateau which extends eastward to Samman Desert and Dahnaa Dunes ond southward to a region penetrated by Wadi Al-Dawaser and bordered by the Empty Quarter.  The Plateau stretches northward to Najd Plains passing through Hoel unitl combining with the Great Nefud Desert then to the borders of Iraq and Jordan. There are also some mountains in this plateau such as Tawabek Mountains, Al Aradh, Aja and Salmah. The Empty Quarter,  the southeastern part of the Kingdom, occupies on estimated area of 640,000 square kilometers composed of sandhills and lava fields. The eastern coastal plain is 610 kilometers long and consists of large sand areas.
The climate of Saudi Arabia varies from one region to another because of its various topographical features Being under the influence of a sub-tropical high pressure system the Kingdom is generally hot in summer and cold in winter, and its rainfall is often in winter.  Moderate climate is seen in the southwestern part of the Kingdom, dry hot summer and cold winter in the interior parts, and high temperature and humidity in the coastal areas.

Population
TOTAL ESTIMATED POPULATION       24.06 million (2003)

POPULATION GROWTH RATE             2.9%

POPULATION DISTRIBUTION BY SEX:
                     Male               55%
                     Female            45%

POPULATION DISTRIBUTION BYNATIONALITY:
                    Saudis               74.5%
                    Non-Saudis         25.5%

POPULATION DISTRIBUTION BY AGE:
                   14and Less          39.7%
                   15-64                 57.9%
                   65+                    2.4%

POPULATION DENSITY              10.7 hab./km2

POPULATION DISTRIBUTION BYREGIONS:
                   Riyadh                 23%
                   Makkah                26%
                   Eastern Province   15%
                   Asir                     8 %
                   Madinah               6 %
                   Other Regions       22 %

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POLITICAL FRAMEWORK:
Official Name: Kingdom of Saudi Arabia
Political System: Monarchy
The Kingdom of Saudi Arabia is an Islamic State
Sharia, the Islamic Code of Law based on the Holy Quran and the Sunnah, is the foundation of the legal system of Saudi Arabia. The Holy Quran itself is considered the constitution of the country and provides ethical values and guidance
Executive and Legislative authority are exercised by the King and the Council of Ministers within the framework of Islamic law. Besides, The Consultative Council (Shura Council) has been established to advise the King and the Council of Ministers on matters pertaining to government programs and policies. The primary function of that Council is to assess and modify the Kingdom’s system of laws. by-laws, contracts and international agreements.
The Kingdom’s ministries and all other government agencies are ultimately responsible to the King.

The Custodian of The Two Holy Mosques :King Abdullah Bin Abdul Aziz Al-Saud,
National day: Sept 23
Territorial organization of the State:

The state is divided into 13 Administrative Regions. Each region is composed of Mohafazat There are 43 level A Mohafaza and 61 level B Mohafaza
General Information:

Capital: Riyadh
Main Cities: Riyadh, Jeddah, Dammam, Taif, Makkah, Madinah
Official Religion: Islam
Official Language: Arabic but English is commonly used especially in commercial correspondence.
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ECONOMIC SYSTEM:
The Kingdom of Saudi Arabia achieved a rapid progress in the last two decades. The Kingdom adopts a free trade policy. It encourages the investment in the local economic development projects through extensive package of incentives given to Saudi and foreign investors.

GDP

(GDP) AT Fixed PRICE (2003) US$ 211.1 Billion

COMPONENTS OF GDP (2002):
                Oil Sector                           31.2%
                Non-Oil Sector                     68.7%
                Private Sector                      45%
                Government Sector               23.7%

NOMINAL GROWTH IN GDP (2003)             6.4%

PER CAPITA INCOME (2003): US$             8796

Inflation Rate (consumer price) 2003         0.6

Average of consumer price for the last 10 years     112.6

DEGREE OF OPENING OF THE MARKET (2002)
Foreign Trade
(Exports + lmports)/ GD                         55.2%
Total Imports/World Imports                   0.5%
(Merchandise)
Total Exports/World Exports                   1.2%
(Merchandise)

GDP BY ECONOMIC ACTIVITIES 2002
Agriculture and Fishing                               5.7%
Industry (excluding construction)                 11.1%
Construction                                             6.7%
Utilities                                                    1.4%
Whole sale and retail trade                          8.2%
Transport, Storage and Communication          5.2%
Finance, Insurance, Real est. and Business     12.8%
Social Services                                          3.8%
Government Services                                  19.5%
Mining                                                      27.4%


Agriculture:
Over the past decade, Saudi Arabia has fundamentally transformed its agricultural landscape, covering desert into fertile farmland. The country’s spectacular increase in wheat production is now considered one of the major accomplishments of modern agriculture in the Middle East. In the recent years, Saudi Arabia has become self-sufficient in most basic foods; it has even begun to export wheat, dates, dairy products, vegetables, eggs, fish and poultry to markets around the world.
Industry:
Industry in Saudi Arabia is very important to diversify its economic base, to reduce its dependence on the production and export of crude oil, to increase the private sector’s participation in the development process, to create new job opportunities, to develop the National manpower resources and to establish a solid technological base. The cumulative number of operating industrial units, licensed under the Regulation for Protection and Promotion of National Industries and the Foreign Capital Investment Regulation in the Kingdom, reached 3,110 at 1998, with a total capital investment of $61.4 billion. In view of the importance given by the Kingdom for the availability of basic infrastructure for the industrial sector to accelerate the pace of manufacturing, the two major industrial cities at Jubail and Yanbu, were established by the Royal Commission for Jubail and Yanbu. These cities are primarily targeted at developing basic industries related to oil derivatives, petrochemicals and minerals, as well as to spur development of secondary industries derived from these basic industries, in addition to the associated support industries. In pursuit of the balanced regional development objective, and in an effort to stimulate the Industrial sector, the Ministry of Industry and Electricity has established 15 adequately developed industrial cities, with various utilities and services necessary for the establishment of factories.
Services:
Services provide a great contribution to GDP and to employment in Saudi Arabia.
Services in Saudi Arabia include:
commerce, tourism, standardization and specification, and statistical services. The commercial services which include the wholesale and retail trades, hotels, and restaurant is the most important because of its essential role in achieving the general objectives and strategic principles of the Saudi Socioeconomic Plans by providing goods, materials, and services to citizens in all regions of the Kingdom and enhancing the sources of National income. The cumulative number of companies existing in the Kingdom and licensed by the Ministry of Commerce reached 8,963. Joint stock companies, numbered 94, with total paid-up capital of US$ 22.95 billion in 1997
Banks:
The Saudi Arabian Monetary Agency - SAMA - is the country’s central bank.

The commercial bonks in Saudi Arabia are:
• The National Commercial Bank
• The Riyad Bank
• ALBank AlSaudi Al-Fronsi
• The Saudi American Bank
• The Saudi British Bank
• Al-Bank Al-Saudi Al-Hollandi
• The Al-Jazirah Bank
• Al-Rajhi Banking and Investment Company
• Arab National Bank
• The Saudi Investment Bonk
Roads:
The Kingdom’s road network consists of 44,100 km. of asphalted roads. Nearly all towns and cities as well as most of the villages of the Kingdom are now linked by at least two lane roads.
Railways:
The number of passengers who travelled dbay the railways durig 1997 totaled 608 thousand and the volume of goods carried by it during the same period amounted to 2.5 million tons.
Airports:
The number of airports operating in the Kingdom reached 25, of which 3 were international. The number of passengers arriving at airports in the Kingdom is 13.1 million in 1997, and the number of passengers departing from all airports in the Kingdom is 13 million in 1997. Outgoing cargo at all airports in the Kingdom carried by all airlines reached 175.9 thousand tons in 1997
Seaports:
There are Eight commercial and industrial seaports in the Kingdom handling an increased volume of goods every year. The total volume of Exports and Imports (excluding crude oil) amounted to 88.8 million tons in 199d7.  The number of berths in the commercial ports amounted to 183 in 1997 and the industrial ports amounted to 46 berths.
Post:
The number of Post Offices operating in the Kingdom in 1997 was 626. The number of domestic correspondence was 338.8 million, and the number of incoming and outgoing postal materials was 596.7 million items in 1997
Telephone lines:
The number of operating telephone lines reached 2.3million in 1997 the telephone service in the Kingdom is currently covering 893 cities and villages.
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MARKET ACCESSIBILITY:
TRADE SYSTEM:
The Kingdom of Saudi Arabia is dedicated to the concept of free trade based on competition There are no foreign exchange controls quantitative restrictions or tariff barriers No price restrictions or quotas are imposed on importers except for few products which are prohibited. Customs duties are very low,  whereas some essential items enter duty free.  Imports, wholesale and retail trade are in the hands of the Saudi private sector The government supports the expansion of the private sector as the cornerstone of economic diversification by assigning to it a major role in handling domestic and foreign trade. The Kingdom s foreign trade strategy is directed   towards the attainment of an adequate balance in the financial and merchandises trade flow between the Kingdom and other countries Investment system:
The Saudi government has developed an extensive package of incentives to attract  local and foreign investors
The Foreign Capital Investment Law issued in 1979 has been specially introduced to provide a set of incentives for foreign investors wishing to invest in the Kingdom Foreign Capital enjoys the same privileges as Saudi Capital under the National Industries Protection and Encouragement Regulations - items such as low cost   financing duty  free equipment and row materials 10-yeor tax holidays and free repatriation   of   Capital and Profits  made the Kingdom an attractive potential magnet for local and foreign investment
Tariffs:
Tariff levels on imports of a wide variety of Products are 12% Membership of trade and economic organizations:
Kingdom of Saudi Arabia is a member in many world trade and economic organizations such as
• World Bank (WB)
• International Monetary Fund IMF
• Arab Monetary Fund (AM)
• Inter-Arab Investment Guarantee Corporation
• Cooperation Council for the Arab states of the Gulf (GCC)
• Inter-Arab Free Trade Zone
• Standing Committee for Economic and Commercial Cooperation
• Islamic Development Bank (IDB)
and ii is worth to say that the Kingdom is now on the way to be a member of the World Trade Organization (WTO)
Protection of Patents and Trade Marks:
In consistent with international standards the Kingdom enacted Copyright Law in 1989 and has acceded to the Universal Copyright Convention Similarly Saudi Arabia s trade mark low and regulations generally follow internationally accepted norms
Visa Formalities:
No visas are required by nationals of Kuwait Bahrain Oman Qatar and the UAE All other nationals should obtain visas Prom Saudi Embassies or Consulates abroad Applicators via trade associabons Chambers of Commerce etc are recommended supported by an invitation from the host company in Saudi Arabia
Business Hours:
Govt Offices
7: 30 to 14: 30
Banks
8 :30 to 12 00 and 17: 00 to 19: 0015at to Wed)
8 :30 to 11: 30 (Thursday)
Business
Vary from business to business and from place to place During Ramadan most businesses open in the evening after sunset
Currency:
Saudi Royal (SR) divided into 100 Hal alas
Currency regulation:
There is no restriction on the amount of currency, which a traveller may take into or out of Saudi Arabia
Electricity:
Both 110 V and 240 V 60 Cycles AC
Official holidays:
Weekend holidays: Thursday and Friday
Eid Al Fitr : From 25th Ramadan to 5th Showwal
Eid Al Adha: From 5th Dhul Hajj to 15th Dhul Hajj All government institutions and departments  are  closed during these holidays But in private sector it differs from business to business
International Dialing:
+966 plus the area code;
1 Riyadh 2 Jeddah 3 Dammam/ Dhahron/ AI Khobar

Key Contacts:

Government Ministries: Tel: Fax:
- Ministry of Agriculture and Water 966-1401 -2777 966-1403-1415
- Ministry of Commerce 966-1401-2222 966-1403-8421
- Ministry of Finance and National Economy 966-1405-0000 966-1405-9202
- Ministry of Foreign Affairs 966-1406-7777 966-1403-0159
- Ministry of Industry and Electricty 966-1477-6666 966-1477-5451

Council of Saudi Chambers of Commerce and Industry
P.O. Box: 16683, Riyadh 11474,
Tel: 4053200, Fax: 4024747,
Webpage:HTPP://www.Saudichambers.org.sa
E-mail: info@saudichamber.org.sa
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