General Information

The Kingdom of Saudi Arabia is a hydrocarbon-rich country and a prominent member of the GCC (Gulf Cooperation Council). There are no capital controls, exchange controls, or currency regulations that interfere with doing business in Saudi Arabia. Furthermore, the Ministry of Investment (MISA) has recently relaxed the rules for obtaining a foreign investor license. The numerous reforms undertaken by the Kingdom are strengthening the country's attractiveness and facilitating the establishment of foreign companies.

It is important to note that there is a difference with the West regarding the weekend: Friday and Saturday.

In 2016, the Kingdom launched the "Vision 2030" plan with the ambitious goal of reforming the Saudi economy and society. The Kingdom encourages, among other things, projects aimed at diversifying the economy and local investment projects that create jobs.

All foreign investors must hold a license issued under the Saudi "Foreign Investment Law." Before starting to do business in Saudi Arabia, a foreign investor must obtain a foreign investment license from the Saudi General Authority for Investment (MISA). Different types of licenses are issued to foreign investors depending on the activity they intend to carry out in Saudi Arabia (industrial license, services license, commercial license, construction license, etc.). MISA verifies, among other things, whether the project "contributes to the development of the national economy and sustainable development." While in certain sectors a foreign investor may hold up to 100% of the capital of a Saudi company, some industrial and service activities remain closed to foreign investment.

The Kingdom is developing nearly 200 mega-projects across the country and offers numerous opportunities for French companies. It should be noted that the Saudi authorities are eager to see foreign companies, particularly SMEs, establish themselves in the country.

Saudi Arabia is almost entirely dependent on oil, with GDP growth closely tied to real oil output. After a recession in 2023 (-0.8% of GDP) caused by declining oil production and falling oil prices, the Kingdom returned to growth in 2024, with real GDP rising 1.3% compared to the previous year, according to preliminary government data. Non-oil growth significantly outpaced overall GDP growth, rising 4.3%, while oil activities contracted by 4.5% and government activities grew by 2.6%. According to the IMF, overall GDP growth is expected to accelerate to 4% in 2025.

Despite the currently very tense geopolitical context in the Persian Gulf, Saudi Arabia still enjoys sea access via the Red Sea, enabling it to continue selling and transporting oil while bypassing the Strait of Hormuz. This dual sea access is also a lifeline for other GCC members, who benefit from overland supply routes by road or rail. This strategic positioning is a major advantage in the conflict unfolding in the Gulf. A regional escalation of the armed conflict would be the worst-case scenario for global economies. As of today, the price of a barrel of oil stands at around $96 to $101, driven by tensions in the Middle East and Brent crude prices.

Means of Payment & Banking Specificities

For transactions with the private sector, the US dollar is most frequently used due to its fixed parity with the Saudi riyal, though the euro is increasingly accepted.

When contracts are entered into with public companies, the Saudi riyal (SAR) is often imposed; it is therefore essential to include an indexation clause, preferably linked to the US dollar or the euro, but with a foreign exchange guarantee.

We recommend confirmed documentary credit. Payment terms are predominantly 30 days.

The risk of late payment is not negligible with Saudi public administrations as a whole, including agents supplying public administrations. Late payment is less common in the private sector and is often due to administrative issues.