Guide

Exporting to Saudi Arabia

Taxes, duty and legal considerations when exporting to Saudi Arabia

There are a lot of things to consider before you start exporting to Saudi Arabia.

It's essential to find out about local rules and regulations on tax and duty in your intended market.

Start-up considerations

You must appoint a Saudi agent to conduct trading activities if you do not have a physical presence in the Kingdom.

You must have a physical presence in Saudi Arabia to be directly involved in the buying and selling of goods. Under Saudi investment law the establishment of a physical presence requires a joint venture with a Saudi partner.

You should evaluate your business partner thoroughly. You should take local legal advice and consult the Department for International Trade (DIT) Saudi Arabia.

Commercial agents

An agent can be:

  • a highly proactive investor, deeply involved in all aspects of management, finance and marketing on a day-to-day basis
  • a hands-off agent who just arranges official paperwork and has little other involvement

It is very important to choose the right agent. It should be made clear from the start what services will be provided and what won’t.

Legal considerations

Islamic Law (Shari’ah) is the law of the land in all cases. Other laws are enforced only if they don’t violate the rules of Shari’ah. Unlike in common law jurisdictions, legal judgments are not published so there are no binding precedents.

The main government laws relating to business include:

  • government tenders and procurement laws
  • foreign investment laws
  • employment law, including Saudisation
  • Zakat, the religious wealth tax, and income tax law

Standards and technical regulations

The Saudi Standards, Metrology and Quality Organisation (SASO) has implemented a Conformity Assessment Programme (CAP) covering goods destined for Saudi Arabia. CAP requires quality checks and inspections on companies looking to export to Saudi Arabia. Proof should be provided in the form of a Certificate of Conformity.

The Ministry of Commerce and Industry provides details of import procedures.

Intellectual property

Saudi Arabia has been a member of the World Trade Organization since 2005 and has introduced new legislation increasing the level of protection for intellectual property.

Certificates of Patents granted by the GCC Patent Office secure legal protection of the inventor’s rights in all member states.

Read more about protecting your intellectual property overseas.

Tax and customs considerations

Taxation is a specialised subject and advice should be sought from specialists practicing in Saudi Arabia as part of the planning stage for doing business in this market.

Income tax

There are no personal taxes in Saudi Arabia. This includes foreign nationals. Saudi and GCC nationals are subject to Zakat.

Sales tax

There is currently no Value Added Tax (VAT) or sales tax in Saudi Arabia.

Corporation tax

Companies are generally obliged to pay 20 per cent corporate tax. Foreigners who receive net income from investments in Saudi businesses, and self employed individuals who do business in Saudi Arabia are subject to corporate tax on a sliding scale.

Customs

The customs tariff on the majority of imported goods is 5 per cent. There is also a protective tariff of 12 or 20 per cent on some imports in order to support certain national industries.

There are import controls on a number of products such as pork products and alcohol.

Check your product is not on the list of restricted items.

You can find more about import tariffs in the Market Access Database (MADB).

Documentation

The documents required for import and export of goods to and from Saudi Arabia are:

  • invoices – initiated by supplier
  • certificate of origin
  • bills of lading / airway bill

Entry requirements

Visas are essential for any foreigners, excluding GCC nationals, and must be obtained in advance. This includes visas for:

  • visits
  • pilgrimage
  • residency

Visitors should have a passport with at least 6 months validity beyond the date they intend to leave Saudi Arabia.

Visa applications must first be notified to the Ministry of Foreign Affairs in Riyadh.

You are strongly advised to use a visa agent. Details of visa requirements are available from the Saudi Embassy.