This year had massive shifts for Saudi Arabia business, with changes that affected every level of the country – economic, social, cultural and environmental. The main catalyst for the change is King Salman’s Vision 2030, which continues to impact the country positively and push it towards growth and development. The country experienced changes in their economy, ranked third for market competitiveness in the region, and started numerous mega and giga projects.
As the cinema ban was lifted in 2018, the country continues to grow and expand their entertainment industry. They started off the year with a mega project for an entertainment complex in the capital city, Riyadh.
The government also reported they would extend work visas from one year to two to help companies continue normal business operations without disruption. They also started the construction of their first major wind project worth $500 million.
In February, the government announced $22 billion worth of projects in the capital to improve the infrastructure, amenities and education. They also supported companies who were struggling to pay expat fees by contributing $3 billion to their fees.
In March, the General Authority of Zakat and Tax (GAZT) announced the introduction of transfer pricing bylaws.
The Ministry of Interior (Jawazat) announced that those visiting the Kingdom on a visit visa must have valid health insurance when extending their visa – those on Umrah, Haj or on diplomatic visas and visitors to diplomatic missions are exempt. And, the government continued to ease operating in the Kingdom by consolidating and simplifying processes into one platform called Qiwa.
In May, the government posted a budget surplus for the first time since 2014. A clear indicator that governmental efforts to improve the economy have been effective.
June had many changes for the country including; the government finalising $533 million worth of privatisation deals, Jeddah offering a 3 minute e-visas to those visiting for the Sea and Culture festival, the opening of the NEOM bay airport, and Cinepolis, a cinema company, announcing their $300 million investment into the Kingdom over the next 3 years.
The most monumental of all these was the Kingdom announcing they would be releasing residence permits to those who want to live in the Kingdom permanently.
The government approved the e-commerce law to improve the e-commerce sector and increase its’ contribution to the economy and protect consumers. It is now mandatory for all companies to participate in the contracts authentication service which was released to keep a record of employee contracts in the Kingdom.
August was a quiet month, with the major shift being the government requiring expat accountants and expats working in finance to register themselves with the Saudi Organization for Certified Public Accountants (SOCPA) to monitor, protect the integrity and efficiency of the accounting profession in the Kingdom.
Because Saudi is one of the largest exporter of oil, the Ministry of Energy was split into two, creating a natural resources ministry to allow greater focus on each ministry. At the World Energy Congress in Abu Dhabi, SAGIA awarded 6 investment licenses worth $240 million in the industry of solar energy development, manufacturing and energy efficiency.
Continuing the entertainment theme, the government revealed a new process for entertainment licenses, and that Saudi will waive expat fees for those working in industrial companies for a period of five years starting from October 2019.
October was another quiet month, but the Saudi government did announce their host visa available for residents and locals in the kingdom to host visitors on for 90 days.
Saudi Arabia announced their tourist visa which will drastically change the Kingdom economically, socially and culturally. After the announcement of the residency permit, the first batch of people were granted their permanent residency to live in the Kingdom. The government also introduced the instant work visa in the Kingdom to help small businesses have smoother operations.
The Ministry of Labour encouraged compliance for companies through stopping their e-services for companies whose registered commercial activities don’t match their actual activities.
Another large project the government undertook was the $23 billion sustainability project that aims to make Riyadh 9% green.
The Ministry of Labour and Social Development cancelled the yellow band of the Nitaqat program, meaning companies in the yellow band automatically fall to the red band, and therefore, are non compliant. This will force companies to become compliant and improve Saudization rates around the country.
2019 was a big year for the Kingdom, with mega investments expected to help improve the economy, quality of life for residents and the country as a whole. Throughout the year, we see themes of improvement and development in immigration, with the tourist visa, host visa, work visa and permanent residency program; and compliance, with companies needing to register their services, accountants and finance workers needing registration and contracts authentication services. 2020, surely, has more growth and development in store for the Kingdom.
If you would like to read our 2018 Saudi Arabia business year review, click here.