International business in Saudi Arabia

International business in Saudi Arabia

International business in Saudi Arabia

Saudi Arabia is a land of mainly dry, sandy desert and harsh, extreme climates. Located in the Middle East, it’s bordered by the Red Sea and the Persian Gulf and is spread over 21,49, 690 square kilometres. It also has 7 bordering nations including Kuwait, Iraq, Qatar, Jordan, the UAE, Oman and Yemen.

Islam is interwoven into the Saudi Arabian culture as it is the birthplace of this religion. The two most revered Islamic places, Mecca and Medina, are both located in Saudi Arabia.

The Saudi Arabian economy is an oil based one and all primary economic activities of this nation are closely controlled and monitored by its powerful government. Saudi Arabia is a leading player in the OPEC (The Organisation of the Petroleum Exporting Companies) as it ranks as the highest petroleum exporter in the world. This is due to the fact that approximately 16% of the world’s total petroleum reserves exist within the Saudi Arabian borders, making it abundant and self-sufficient.

Though traditionally, Saudi Arabia has been aiming at diversifying its economy in the areas of telecommunications, petrochemical sectors, power generation and natural gas exploration, latest developments see the Saudi Arabian government inviting investment towards the privatisation and development of its healthcare, tourism and education sectors. This diversification is necessary for Saudi Arabia to stay afloat even in situations in which oil prices drop.

What is the vital data for Saudi Arabia?

Population (million) 32.2
GDP (billion USD) 653
GDP per capita (USD) 20,711
GDP per capita PPP (USD) 54,100
Purchasing Power per dollar (compared to the US) 215%
% of population living in urban areas 83%
% of GDP added by agriculture – industry - services 2% - 57% - 41%

What is Saudi Arabia’s business index?

Saudi Arabia ranks 82 out of 189 economies in ‘ease of doing business’. In ‘trading across borders’, it ranks 150th.

Which are Saudi Arabia’s key industries?

  • Crude oil production
  • Petroleum refining
  • Basic petrochemicals
  • Ammonia
  • Industrial gases
  • Sodium Hydroxide
  • Cement

Which are Saudi Arabia’s top export commodities?

Petroleum and petroleum products govern 90% of Saudi Arabia exported products.

Who are Saudi Arabia’s top export partners (percentage of total exports)?

  • China (13.3%)
  • Japan (13%)
  • US (12.9%)
  • South Korea (10%)
  • India (8.9%)
  • Singapore (4%)

Saudi Arabian political framework

Saudi Arabia is governed by an absolute monarchy system.  With the title of the Custodian of the Two Holy Mosques, King ABD Al- Aziz bin Abd al-Rahman Al Saud successfully unified the kingdom in 1932.

Currently, the King and Prime Minister of the country is Salman bin Abd al-Aziz Al Saud since January 23, 2015, with his Crown Prince and Deputy Prime Minister Muhammad Bin Nayef Bin Abd al- Aziz Al Saud.

What are the important events in Saudi Arabia?

These are the important dates in Saudi Arabia during 2016 on which most institutes, establishments and companies are closed:

Occasion Date
Eid- Al- Fitr July 5
Eid- Al- Fitr (end of Ramadan) July 6
Eid- Al- Fitr holidays July 7 and July 8
Eid- Al- Adha (Feast of sacrifice and holidays) September 13 to 16
Saudi National Day September 23

Due to certain political steps, the Saudi Arabian market is gradually opening up to international participation in terms of investment, technology and manpower. Host to many international trade shows in the areas such as agriculture, home decor, furnishings and appliances, plastics, and petrochemicals, it’s an often frequented business destination in the Middle East.

For more information on conducting international business in Saudi Arabia, seek assistance from professionals for your personalised export plan.

This entry in Africa & ME was updated on July 10, 2017 by specialist.