Being a main exporter of petroleum has allowed Saudi Arabia to build on its economy rather successfully. At this time, it has the largest economy in the Arab world and owns 18% of the petroleum reserves in the entire world. As such, its oil-based economy is a very strong one leading to excellent business opportunities from around the world.
Oil accounts for almost all of the Saudi Arabian government’s income and export earnings. There are a large number of foreigners already working in the private sector in Saudi Arabia. This foreign investment started in the mid-80s and has developed continuously since then until 2000 when fully foreign-owned companies were finally permitted inside the kingdom.
Working within the Law
For those looking to do business in Saudi Arabia though, there are still a number of challenges.
- Firstly, it is important to get sponsors simply for that first entry into the Saudi market.
- In addition, it is important to also acquire a Saudi partner to participate in joint ventures.
- Lastly, there is the paperwork; this involves having to establish a legal entity and to
get the licenses from the appropriate ministries that the company will be working under.
These licenses have to be applied for via the relevant departments. The business must also have a certain required number of Saudis working for them in accordance with Nitaqat, a Saudi policy that is trying to create better work opportunities for its own citizens.
The UK, for example, has a very strong history of trade with Saudi Arabia with a reputed 6,000 firms importing and exporting goods from the country. Barnebys is one such company and acquires a large number of interesting artefacts from Saudi Arabia for its auction sites. Other exports include transport and industrial machinery related products, scientific instruments, and consumable items.
With one of the fastest growing populations, Saudi Arabia needs a massive investment into the growing requirements of this expanding population. More money is being spent on education and training for citizens to acquire better jobs and more foreign companies are being encouraged to invest in this type of course as well.