Saudi Arabia

Click on each topic for more information
:

MARKET ACCESS

 

Import regulations and customs duties  - Distribution - Transportation of goods - Standards - Patents and brands


Import regulations and customs duties

Regulations
Only Saudi Arabian companies, 100% owned by Saudi Arabian are authorised to import. Importers should obtain a licence from the Department of Trade and Industry and consult the appropriate Ministry according to the nature of the goods to be imported.

The documentary regulation, required for the expedition of goods in Saudi Arabia is very strict: commercial invoice, certificate of origin, B/L (or airway bill), certificate of assurance (if CIF sale), SASO compliance certificate when applicable. These documents should be stamped by the following organisations: Chamber of Commerce and Industry of the exporter country, "bilateral" Chamber of Commerce, Consulate of Saudi Arabia from the exporter country.
For fruits, vegetables and semen, a phytosanitary certificate is required. For meats, a sanitary certificate is required, and should be delivered by the veterinarian services of the exporter country, as well as a slaughter certificate according to the Islamic rites, which is delivered by the Competent Islamic Authority of the exporter country. These documents should be signed either by the "bilateral" Chamber of Commerce or by the Ministry of Foreign Affairs.
Any kind of business with Israel or with companies having commercial links with Israel is prohibited.


Any kind of business with Israel or with companies having commercial links with Israel is prohibited.
ProductProhibitionSpecial licencesCertificate SASOLicense
PigX
Representational objects of artX
Agricultural semen X
Books, magazines, films, tapesX
Pharmaceutical productsX
Living animals, fresh and deep-frozen food X
Farm productsX
Alcoholic drinksX
ToysX
Electronics and electricityX
MotorcarX
ChemicalsX

 


Customs duties
Saudi Arabia applies the Harmonised Customs System. The customs duties are calculated Ad valorem on the C.I.F value. However, some products are subject to taxes based on the weight or the volume.
The basic rate is 12%. Most of the basic consumer goods (sugar, rice, tea, coffee (not moulded), wheat, living animals) are exempted from taxes. To protect the rising national industry, a 20% tax is applied for some products such as steel, cement, furniture, organic and liquid detergents as well as some electrical items. On the other hand, products such as tobacco are taxed at a rate of 30%.
Saudi Arabia signed trade agreements, especially with the Gulf Co-operation Council - GCC (total exemption of the customs duties), as well as with certain Muslim countries of the Arabic league (Jordan, Kuwait, Libya, Morocco and Tunisia: drop of 10 % of the customs duty since 1998).

 

 


Regulations governing payments
There is no limitation in the exchange regime. Except for Israeli currency, payments are accepted in any other currency, as soon as the contracting parties agree.




Distribution


The Business to Consumer (B to C) market
The main economic areas are located around Riyadh, Jeddah and Dhahran. The distribution structure in Saudi Arabia is more and more complex and competitive. The various distribution network and mass media exert a growing influence over the Saudi Arabian consumer.


The Business to Business (B to B) market
The Saudi Arabian distribution system experienced several changes over the last few years because of the appearance of shopping centres and supermarkets based on western models.

The main retail selling points are:

- Baqalas: these small groceries are the main retailers in large number of villages, especially outside big cities.

- Minimarkets: these groceries of average size, a notch over baqalas, have more items in stock and are able to offer a variety of products; they are located in the populated districts of big cities.

- Supermarkets: supermarkets are retail sales points experiencing the fastest growth. Literally several of them open every day. They are now part of the way of life of lot of city-dwellers, that is to say about 60% of the population.

Direct marketing or mail order selling are non-existent. It is partially due to the absence of mail service at home (POBs). Here, it is necessary to mention that the good results obtained lately are due to TV marketing. The agent is the most recommended way to be nearer to the market. It is recommended that particular care should be taken in selecting the agent because of the legal difficulties in case of conflict (there are huge differences in their legal system as compared to that of western countries).
The distribution network is generally as follows:

  • importer or agent of a mark or a product,
  • distributor, wholesaler,
  • retailer


More often than anywhere else, the role of the importer (or his representative) and of the distributor are linked together. Saudi Arabian importers assume both the roles of distributor and wholesaler. The improvements brought in the Saudi communication and transport infrastructures facilitated the distribution, making it now worth investing in. The road network in the country is approximately 160,000 km. The Gulf war favoured the development of the road network but some efforts remained to be made. The main roads connect Jeddah, Mecca and Medina, in the eastern part of the country, with Riyadh and the Gulf oil fields in the oriental part around the city of Dhahran. Furthermore, there are important roads connecting the region of the Gulf with the Jordanian border in the North and the main cities of the coast of the Red Sea. The whole road network is managed by the Saudi Public Transport Company SAPTCO.


 


Transportation of goods


By rail
The railroad network is not extended. The program of the Saudi railways organization aims at connecting urban areas and industrial parks and was integrated into the fifth Five-year plan which is planning certain improvements in the following sections: Riyadh - Jeddah> 934 km Jeddah - Medina> 372 km Riyadh - Buraidah - Medina> 1,065 km Jubail - Damman.


By sea
The five main ports are: Yanbu and Jubail where the biggest part of the Saudi Arabian export transaction take place. The other ports are Jeddah, Dammam and Jizan.
Along with other minor ports, their total capacity is enough to cover current and future needs and they are managed by the Ports Authority.


By air
The air transport represents the best and most used means of goods transport in Saudi Arabia. In 1991, the country had 25 airports out of which 3 were international ones: King Khaled in Riyadh, King Abdul Aziz in Jeddah and Dhahran. During the Gulf war there was a drop in the air traffic, both for regular flights and for freight. From 1992, a recovery of the traffic began. The national company Saudi Arabian Airlines decided to buy new aircrafts and the government integrated the development of the air traffic into the fifth Five-Year plan.




Standards

Saudi Arabian have their own institution for the normalisation of imports called the SASO (Saudi Arabian Standard Organization) which depends on the internationally approved systems. The imported products should fit the SASO standards.
For the normalisation, a certificate of origin is necessary and a world network of laboratory guarantees and acceptance by Saudi Arabian organisation such as the Standardization and Metrology Organization for GCC Countries (GSMO),the Arabic Organization for Industrial Development and Mining(AIDMO), the International Electro-technical Commission(IEC), the Codex Alimentarius Commission (CAC) and the International Organization for Legal Metrology (OIML) will deliver you the appropriate certificates.



Patents and brands

The organisation in charge of the protection of patents is the King Abdulaziz City for Science and Technology (KACST) General Board of Patents.
The organisation in charge of the protection of trademarks is the Ministry of Economy and Commerce Department of Internal Trade Trade Mark Section.
The international rules on intellectual property have not yet been incorporated into the legal texts of Saudi Arabia. However, the Government took a first series of measures to prevent the copying and forgeries.
In terms of patents and trademarks, Saudi Arabia did not sign the Agreement of Paris or the Agreement of Madrid, but signed that of Bern. However, they signed the Agreement establishing the World Organization of Intellectual Property (WIPO).



 

Last modified in 2006 - ongoing update
Export Entreprises©, All rights reserved