Favorable Market Factors in Saudi Arabia

More business friendly opportunities

Previously I discussed the opportunity of operating a facility in Saudi Arabia.  As with all countries they have an economic development agency to assist in setting up an operation in the Kingdom.  Modon  was created in 2001 with the mission to assist foreign businesses in establishing operations and forging business alliances.

If an operation is located in the regions of Ha'il, Jazan, Najran, Al-Baha, Al-Jouf, and the Northern Borders Region, the firm can qualify for:

  •  50% discount of annual wages paid to the Saudis.
  •  50% discount on the annual training cost of Saudi manpower.
  •  Additional discounts are granted in case the capital invested exceeds one million Saudi riyals, and also if more than five Saudi nationals are hired for a period of not less than one year in technical or administrative jobs.

So even if you establish a sales and distribution office, 50% of the salaries can be covered by the Kingdom.  This begins to establish a reasonable risk for a business looking to expand their market overseas.  In addition a number of other factors can make this attractive including:
*         Allowing foreigners 100% ownership of companies and land.

*         No restrictions on repatriation of capital.

*         No taxes imposed on personal income. Taxes on foreign firms equal to 20% on profits.

*         Possibility of carrying forward losses in the balance sheet statement for unlimited time.

*         Foreign investors having access to a variety of local and international specialized funding institutions.

Again if one is looking to Saudi Arabia after completing their due diligence in the US, a visit to the Kingdom is highly recommended as the next step.

  
  

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