General Information

The Kingdom of Saudi Arabia is a hydrocarbon-rich country and a prominent member of the Gulf Council Committee (GCC). There are no foreign exchange controls or currency regulations that interfere with business in Saudi Arabia. In addition, the SAGIA recently relaxed the rules to obtain a foreign investor license. The many reforms undertaken by the Kingdom are increasing the country’s attractiveness and the location of foreign companies.

It is important to note that there is a time lag with the West regarding the Weekend: Friday and Saturday.

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

All foreign investors must have 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 Investment Authority (SAGIA). Different types of licenses are issued to foreign investors depending on the activity they intend to carry out in Saudi Arabia (industrial license, service license, commercial license, construction license, etc.). Among other things, the SAGIA verifies whether the project “contributes to the development of the national economy and sustainable development”. While in certain sectors of activity the 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 no less than 200 mega projects across the country and offers numerous opportunities to French companies. It should be noted that Saudi Arabians are keen to see foreign companies, especially SMEs, set up in the country.

Rising oil prices, the recovery of government projects and spending, and the economic recovery supported business and consumer confidence in 2022 and 2023. According to the World Bank, the growth forecast for the Saudi economy is +2.6% for 2024 and nearly +6.0% for 2025.

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, but the euro is increasingly accepted. When entering into contracts with public companies, the Saudi Riyal (SAR) is often taxed; it is then imperative to provide an indexation clause, preferably on the US dollar or the euro, but with an exchange guarantee.

We recommend confirmed documentary credit. Payment deadlines are mostly 30 days.

The risk of late payment is not negligible with all Saudi public administrations, including agents who supply public administrations. Late payment is less in the private sector and often due to administrative problems.