PROFILE CONTENTS }} INTRODUCTION 2 LEGAL AND REGULATORY
4
TAXATION 7 BANKING 11
Saudi Arabia*
PAYMENT INSTRUMENTS
12
PAYMENT SYSTEMS
14
CASH MANAGEMENT
16
ELECTRONIC BANKING
18
TRADE FINANCE
19
USEFUL CONTACTS
21
* Guides specifically designed for treasury managers offering a detailed picture of the banking and cash management arrangements for an extensive range of locations. Please note the information is of a general nature only and is subject to change. It does not constitute financial, legal, tax or other professional advice.
Country Profile
SAUDI ARABIA
INTRODUCTION }} General Capital/Other major cities: Area: Population: Language: Currency: Country telephone code: Weekend: National holidays: Source: www.goodbusinessday.com.
Business hours: Banking hours: Stock exchange: Leading share index:
Riyadh/Jeddah, Mecca, Medina 2,149,690km2 27.34m Arabic Saudi riyal (SAR) 966 Friday and Saturday 2nd half 2015 — 22–25 Sep* 2016 — 4–6 Jul*, 10–13 Sep*, 23 Sep 08:00–17:00 (Sat–Wed), 08:00–12:00 (Thu and during Ramadan) 09:30–15:00 (Sat–Wed), 09:30–12:00 (Thu and during Ramadan) Saudi Stock Exchange (Tadawul) Tadawul All Share Index (TASI) * The date shown may vary by plus or minus one day. These dates are derived by converting from a non‑Gregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon.
Government Legislature }}Monarchy with a unicameral Consultative Council (Majlis al-Shura). }}Consultative Council – 150 members and a chairman appointed to serve four‑year terms by the king. Head of state and political leader }}King Salman bin Abdul-Aziz Al Saud, head of state and political leader since 23 January 2015.
Sectoral distribution of GDP (% of GDP) Agriculture Industry Services
2.0% 62.5% 35.5% (2013 estimate)
Please note that the information contained in this document is of a general nature only and is subject to change whether for economic, political, social or other reasons. It is not intended to be comprehensive and does not constitute financial, legal, tax or other professional advice on which you should rely. Accordingly if you are planning any business activity in the country or taking, or refraining from any action on the basis of the information in this document, you must obtain your own independent professional advice. The materials contained in this document were assembled in January 2015 (unless otherwise dated) and were based on the law enforceable and information available at that time. We make no representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it.
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SAUDI ARABIA
Economy
2009
2010
2011
2012
2013
Exchange rate* (SAR/USD)
3.7500
3.7500
3.7500
3.7500
NA
0.738
0.694
+ 5.1
+ 5.3
NA
NA
GDP volume growth** (%)
+ 1.8
GDP (SAR bn) GDP (USD bn)
Q3
Q4
Year
Q1
3.7500
3.7500
3.7500
3.7500
3.7500
3.7500
0.916
0.953
0.952
0.946
0.892
0.936
NA
+ 5.8
+ 2.9
+ 3.5
+ 2.7
+ 2.8
+ 2.5
+ 2.7
NA
NA
NA
NA
NA
NA
NA
NA
NA
+ 7.4
+ 10.0
+ 5.4
+ 2.7
NA
NA
NA
+ 3.6
NA
1,609
1,976
2,511
2,752
2,791
–
–
–
2,822
–
429
527
670
734
744
–
–
–
753
–
16,011
19,325
24,118
25,944
25,818
–
–
–
26,100
–
11.3
18.0
28.0
26.6
22.6
–
–
–
NA
–
Unemployment (%)
GDP per capita (USD) BoP (goods/services/income) as % GDP
2015
Q2
Interest rate* (MMR) (%) Consumer inflation** (%)
2014
* Period average. ** Year on year.
Sources: IMF, International Financial Statistics, May 2015 and 2014 Yearbook.
Country credit rating Fitch Ratings rates Saudi Arabia for issuer default as: Local currency rating
Foreign currency rating
Short
–
F1 +
Long
AA
AA
Term
Stable
Long-term rating outlook
Source: www.fitchratings.com, June 2015.
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SAUDI ARABIA
LEGAL AND REGULATORY }} Central bank }}Established in 1952, the Saudi Arabian Monetary Agency (SAMA) is an autonomous institution operating in accordance with the Charter of the Saudi Arabian Monetary Agency of 1957 and the Banking Control Law of 1966.
Bank supervision }}SAMA supervises the banking sector within Saudi Arabia.
Resident/non-resident status }}A company is considered resident in Saudi Arabia if it is registered or headquartered there or is performing contracts or work in Saudi Arabia.
Bank accounts }}Foreign exchange accounts can be held by residents both domestically and abroad. Resident domestic currency (SAR) accounts cannot be held abroad, but are freely convertible into foreign currency. }}Non-resident bank accounts are permitted in both foreign and domestic (SAR) currency if opened and maintained by residents of the Gulf Cooperation Council (GCC), subject to approval from SAMA. }}If non-resident entities are not GCC residents, they are permitted to open foreign and domestic currency accounts only if they are non-banking entities with projects or contracts in Saudi Arabia. These bank accounts can be maintained for the duration of such contracts only and are subject to recommendation from a rated bank, permission from the Saudi Ministry of Commerce & Industry, approval from SAMA and upon the submission of certain documents. }}If non-resident entities are not GCC residents and do not have contracts or projects in Saudi Arabia, they are not permitted to open foreign and domestic currency accounts without prior approval from SAMA. }}Non-resident domestic currency (SAR) accounts are freely convertible into foreign currency, subject to approval from SAMA. }}Interest can be offered on savings accounts, time deposits and, subject to approval from SAMA, current accounts. }}Overdraft facilities are available to residents and non-residents, subject to credit guidelines.
Reporting }}All transactions between residents and non-residents must be reported to SAMA on a biannual basis. }}Banks are responsible for submitting transactions data to SAMA on behalf of their clients. }}Transactions data can be submitted electronically.
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SAUDI ARABIA
Exchange controls }}Saudi Arabia is a member of the Gulf Cooperation Council (GCC). The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). }}On 1 January 2008, the GCC common market was launched. The common market is expected to lead to monetary union and a single currency between all six GCC member states. }}The Saudi riyal (SAR) is Saudi Arabia’s official currency. The SAR is currently pegged to the USD at a rate of SAR 3.75 per USD 1. }}Exchange controls are administered by SAMA. }}There is an active forward exchange market within the commercial banking sector, covering exchange risks for up to one year. }}All trade with Israel is forbidden. }}Most commercial and financial credits between residents and non-residents require permission from SAMA. }}With the exception of interbank transactions and commercial credits, local banks require SAMA’s permission to lend to non-residents. }}Non-residents require prior approval from SAMA before purchasing shares in Saudi Arabian banks. Non-residents are not permitted to hold more than a 60% stake in Saudi Arabian banks. }}Authorisation from Saudi Arabia’s Capital Market Authority is required for conducting most securities business in Saudi Arabia.
Anti-money laundering/counter-terrorist financing Supplied by BCL Burton Copeland (www.bcl.com). Data as at January 2015.
}}Saudi Arabia has implemented anti-money laundering legislation (AntiMoney Laundering Law of 2003; Rules Governing Anti Money Laundering and Combating Terrorist Financing of 2003, updated 2008; and Banking Control Law of 1966). SAMA has also issued a series of Financing Rules and Guidelines, updated 2012. }}Saudi Arabia is a member of the Gulf Co-operation Council (GCC). It is also a member of the Middle East and North Africa Financial Action Task Force (MENAFATF). }}Saudi Arabia has established a financial intelligence unit, the Saudi Arabia Financial Investigation Unit (SAFIU), within the Ministry of the Interior. The SAFIU is a member of the Egmont Group. The SAFIU refers all matters requiring investigation to SAMA. }}Account opening procedures require formal identification of the account holder. Beneficial owners must also be identified. This information must be updated every five years. }}Individuals are required to provide verified personal information, such as name, address, signature, telephone contact numbers, and details of employment, together with information about any existing bank accounts with other local banks. }}For legal entities, the information required includes the official full name of the account holder, the commercial registration or licence number, and the ID card numbers of the owners of the enterprise as described in the memorandum of association, and its amendments. Shareholders of joint stock companies are exempted from recording their ID numbers. }}Persons acting on behalf of third parties are required to produce evidence of their own identity and that of any third party they represent.
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SAUDI ARABIA
}}Anonymous commercial and financial transactions are prohibited. }}Non-resident individuals or corporations must gain specific authorisation from SAMA before opening an account. }}Banks must maintain an electronic record for all bank account holders. }}Financial institutions in the broadest sense must record and report suspicious, complex or unusually large transactions to the SAFIU. }}The 2003 SAMA guidelines require banks to establish a transaction monitoring threshold of SAR 100,000. }}Money and gold exceeding SAR 60,000 must be declared upon entry and exit from the country. }}All financial institutions are required to maintain records of transactions for a minimum of ten years from the date of the last transaction or the termination of the relationship.
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SAUDI ARABIA
TAXATION }} All tax information supplied by Deloitte Touche Tohmatsu (www.deloitte.com) and Deloitte Highlight, 2015.
Resident/non-resident }}A company is considered resident in Saudi Arabia if it is registered or headquartered in Saudi Arabia.
Tax authority }}Department of Zakat and Income Tax (DZIT).
Tax year/filing }}The tax year is the state’s fiscal year. The taxable year of a taxpayer starts from the date it obtains a commercial registration or licence, unless other documents support a different date. }}A taxpayer may use a different tax year in the following circumstances: }}The different year was approved by the Directorate before the effective date of the income tax regulations; }}The taxpayer uses a Gregorian financial year; or }}The taxpayer is a member of a group of companies or a branch of a foreign company that uses a different financial year. }}Tax returns for a corporation must be filed with the tax authorities within 120 days from the fiscal year end. For partnerships, the deadline is 60 days. }}Taxpayers whose taxable income exceeds SAR 1 million before the deduction of expenses must have the accuracy of the return certified by a licensed certified accountant. Additionally, audited financial statements must be filed with the Ministry of Commerce within six months of the year-end. }}Consolidated returns may be filed only for zakat and only in the case of wholly owned subsidiaries. Consolidated returns are not permitted, for income tax purposes.
Corporate taxation }}A resident corporation is taxed on income arising in the kingdom. A non‑resident carrying out activities in the kingdom through a permanent establishment (PE) is taxed on income arising from or related to the PE. }}Income tax is levied on a non-Saudi’s share in a resident corporation; zakat is levied on a Saudi’s share. Citizens of GCC countries are treated as Saudis. }}The tax base for a resident corporation is the non-Saudi’s share of income subject to tax from any activity in Saudi Arabia, less allowable expenses. The tax base for a non-resident carrying out activities in Saudi Arabia through a PE is the income arising from the activities of the PE, less allowable expenses. }}Local companies are subject to zakat, an Islamic tax on net worth. In joint ventures, local shareholders’ and GCC shareholders’ attributable equity is subject to zakat, whilst the foreigner’s share of taxable income is subject to income tax. Zakat is assessed at 2.5% on the zakat base of a Saudi shareholder. }}The rate is 20% on a non-Saudi’s share in a resident corporation and on income derived by a non-resident from a PE in Saudi Arabia. The rate on taxpayers working in the exploitation of natural gas sector is 30%, and the rate on taxpayers engaged in the production of oil and hydrocarbons is 85%.
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SAUDI ARABIA
}}There is no surtax or alternative minimum tax. }}Tax losses may be carried forward indefinitely, provided the maximum amount deducted in each tax year does not exceed 25% of the annual profits as per the tax return. The carryforward of losses is not allowed for companies that had a change in ownership or control of 50% or more, except for losses arising following the change in ownership that meet the criteria for loss carryforwards. }}The Saudi government grants ten-year tax incentives on investments in the following six underdeveloped provinces in Saudi Arabia: Hail, Jizan, Abha, Northern Border, Najran and Al-jouf. Investors will be granted a tax credit against the annual tax payable in respect of certain costs incurred on Saudi employees. Financial instruments }}There are no specific tax rules for financial instruments. }}Non-interest charges, such as commitment fees, arrangement fees, etc. are allowed. There is a limitation on the deductibility of interest paid on loans and swaps. }}Provisions for losses on all hedges that are charged to the income statement are disallowed for tax purposes until they materialise. Interest and financing costs }}As noted above and in the Thin capitalisation section, interest deduction is subject to limitation. Foreign exchange }}Apart from certain rules for unrealised foreign exchange gains and losses, there are no specific tax rules, because generally accepted accounting standards are followed for tax purposes. }}Unrealised foreign exchange gains and losses that have been included in the profit and loss account are treated as provisions in arriving at taxable profits, i.e. unrealised exchange losses are added back to net profits, whilst unrealised gains are deducted from net profits.
Advance tax ruling availability }}It is possible to obtain a ruling from the tax authorities on the tax consequences of a contract prior to its performance.
Wealth tax }}Zakat is levied on Saudi and GCC nationals and their businesses operating in Saudi Arabia in proportion to their shareholding. It is levied on the taxpayer’s capital resources that are not invested in fixed assets, investments and intangible assets. Such resources include a company’s issued capital, net profits, retained earnings, reserves and provisions. }}The rate of zakat is 2.5%.
Capital gains tax }}A 20% capital gains tax is imposed on the disposal of shares in a resident company. Capital gains on the disposal of shares traded on the Saudi stock exchange are exempt if the shares were acquired after 2004.
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SAUDI ARABIA
Withholding tax (subject to tax treaties) Payments to: Resident companies Non-resident companies
Interest
Dividends
Royalties
Other payments
None
None
None
None
5%
5%
15%
5%/15%1
1. 15% for technical service fees paid to related parties.
}}Payments for rents, insurance premiums, management fees and royalties to non‑resident companies are assessed for Saudi Arabian withholding taxes at rates of 5–20%, depending on the type of service provided. The domestic company making the payment is liable for taxes relating to these foreign payments.
Tax treaties/tax information exchange agreements (TIEAs) }}Saudi Arabia has exchange of information relationships with 85 jurisdictions through 32 double tax treaties, no TIEAs and one multilateral mechanism.
Thin capitalisation }}There are no prescribed thin capitalisation rules in Saudi Arabia. However, for tax purposes, the deduction of loan interest is limited to the lower of actual expense or interest income plus 50% of taxable income calculated before interest income and interest expense. }}Companies may be structured as they wish, but unless they meet specific criteria they are not eligible for investment incentives available under foreign capital investment regulations. }}In accordance with the Companies Regulations, if the accumulated losses of a company exceed 50% of its share capital, a shareholders’ meeting must be called to determine whether to continue the business. The resolution must be published in the official gazette.
Transfer pricing }}There is no specific transfer pricing legislation. }}If the value of goods or services provided by related parties exceeds prices used by independent parties, the tax authorities can make an adjustment to ensure that the value reflects an arm’s-length value. }}A ministerial resolution issued in 2014 authorised the tax authorities to issue detailed transfer pricing rules, which are awaited.
Stamp duty }}There is no stamp duty.
Anti-avoidance }}There is a general anti-avoidance provision in the tax law.
Other taxes }}There is no form of stamp duty, excise duty or property tax in Saudi Arabia, except to the extent that they all fall within the scope of zakat, which only applies to Saudi companies and individuals. However, if a foreign company or a company that has a foreign partner sells land owned by the company, the sale value attributable to the foreign partner or company is subject to tax at a rate of 10%, which is a deductible expense for income tax purposes.
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SAUDI ARABIA
Real property tax }}There are no real property taxes. }}There is no transfer tax payable on the transfer of property.
Cash pooling }}Saudi Arabia has no specific tax rules for cash pooling arrangements.
Sales taxes/VAT (incl. financial services) }}There are no consumption taxes in Saudi Arabia. }}There is speculation that VAT may be introduced in the future, but this has not been confirmed.
Financial transactions/banking services tax }}There are no specific financial transactions/banking services taxes in Saudi Arabia.
Payroll and social security taxes }}There is no payroll tax payable by employers. }}Employers are required to contribute 9% of Saudi employees’ salaries for insurance relating to old age, disability and death, with another 9% contributed by the employee. }}Employers pay 2% for all workers, to cover occupational hazards. }}A 2% unemployment insurance contribution, shared equally between the employer and Saudi employees, is required from 1 September 2014. }}The upper limit of monthly salaries subject to social insurance is SAR 45,000.
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BANKING }} Major banks
Total assets (USD millions) 31 December 2013
Bank National Commercial Bank
100,597
Al Rajhi Banking and Investment Corp
74,624
Riyad Bank
54,727
Samba Financial Group
54,671*
The Saudi British Bank
47,276
* Data as at 31 December 2012.
Source: www.accuity.com, January 2015.
Overview }}There are 12 domestic banks and 12 branches of foreign banks operating in Saudi Arabia. In addition, there are five specialised credit institutions: the Saudi Industrial Development Fund (SIDF), the Saudi Arabian Agricultural Bank (SAAB), the Real Estate Development Fund, the Public Investment Fund and the Saudi Credit Bank. }}There were 1894 bank branches operating across Saudi Arabia at the end of November 2014. }}The state-owned National Commercial Bank dominates the country’s banking sector. }}Foreign banks play an active and prominent role in the country’s banking sector with many establishing a foothold in the sector via minority shareholdings in local banks. Among the most notable are HSBC (40% shareholding of Saudi British Bank) and Crédit Agricole (31% shareholding of Banque Saudi Fransi). }}BNP Paribas, Deutsche Bank, Emirates NBD, JP Morgan Chase and the State Bank of India have all established branches in the country. }}Construction is underway on a new international financial centre in Riyadh, the King Abdullah Financial District (KAFD). The KAFD, which will bring together the country’s banks, SAMA, the Saudi Stock Exchange and the Capital Markets Authority, will enhance Saudi Arabia’s reputation as the Middle East’s largest economy and financial centre.
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PAYMENT INSTRUMENTS }} Payment statistics
Millions of transactions
Traffic (SAR billions)
% change 2013/2012
2012
2013
% change 2013/2012
2012
2013
Cheques
7.0
7.1
1.4
837.6
878.8
4.9
Credit transfers
5.9
7.2
22.0
4,046.8
4,570.1
12.9
Direct debits
1.1
1.4
27.3
0.4
0.5
25.0
Debit cards
1,570.9
1,629.5
3.7
747.9
802.7
7.3
Credit cards
53.3
67.1
25.9
29.7
32.6
9.8
1,638.2
1,712.3
4.5
5,662.4
6,284.7
11.0
Total
Source: CPSS – Red Book statistical update, October 2014.
Credit transfers }}Credit transfers can be paper based or automated. }}Credit transfers are used by the government and companies for salary and supplier payments. }}Credit transfers are cleared and settled via SARIE, the national RTGS system, on a same-day basis. There is no value threshold. }}Credit transfers accounted for 72% of the value of all cashless payments in 2013, but just 0.4% of the volume.
Direct debits }}Direct debits are available in Saudi Arabia and used for low-value recurring payments such as utility bills. }}Direct debits are cleared and settled via SARIE on a same-day basis.
Cheques }}The cheque is a common cashless payment instrument in Saudi Arabia in volume and value terms, and is used for both retail and commercial payments. }}Cheques are processed electronically by the ACH via regional cheque clearing facilities at Riyadh, Jeddah and Dammam, or manually via regional cheque clearing facilities at seven other SAMA branches (Makkah, Ta’if, Al‑Madinah, Buraydah, Jazab, Tabuk and Adha). }}Final settlement is via SARIE. Funds are typically available to beneficiaries within two days.
Card payments }}The use of payment cards in Saudi Arabia has increased rapidly in recent years. }}Debit cards account for approximately 90% of the 20.6 million payment cards currently in circulation in Saudia Arabia. }}Payments cards accounted for 99% of the volume of all cashless payments in 2013, but just 13% of the value. }}The SPAN debit card is issued by most domestic banks in Saudi Arabia. }}Visa and MasterCard are the principal credit card brands issued in Saudi Arabia. American Express credit cards are also issued. }}Each bank in Saudi Arabia establishes its own individual clearing and settlement arrangements with the card associations.
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}}There were approximately 15,223 ATMs and 134,865 POS terminals in Saudi Arabia at the end of November 2014. }}Card payments in Saudi Arabia are processed via the Saudi Payments Network (SPAN), which connects together all the banks operating in the Saudi Arabian ATM/POS market. SPAN also connects the country’s ATM network to the ATM networks of its fellow GCC member states (via the GCCNet ATM network). }}All payments cards and POS terminals in Saudi Arabia are EMV compliant.
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PAYMENT SYSTEMS }} Type }}SARIE (Saudi Arabian Riyal Interbank Express), the country’s national real-time gross settlement (RTGS) system, is managed and operated by SAMA. }}The ACH (Automated Clearing House), Saudi Arabia’s national electronic interbank cheque clearing system, comprises the Riyadh, Jeddah and Dammam clearing houses. }}SADAD is an electronic bill presentment and payment system. }}SPAN (Saudi Payments Network) is the national processing network for card payments.
Participants }}There are 23 participants in SARIE. }}All banks that issue cheques in Saudi Arabia participate in the ACH. }}There are 16 banks and 140 billers participating in SADAD. }}There are 17 participants in SPAN.
Transaction types processed }}SARIE processes all SAR-denominated interbank transfers. There is no value threshold. In addition, SARIE effects the final settlement of participants’ net balances originating from Saudi Arabia’s other clearing houses. }}The ACH processes cheque transactions. }}SADAD processes one-off and high-volume regular payments. }}SPAN processes all payment card transactions.
Operating hours }}SARIE operates 24 hours a day. It receives payments from 09:00 to 16.00 AST (Arabia Standard Time), Saturday to Wednesday, and from 09:30 to 13:30 on Thursday. }}The ACH operates during SAMA’s banking hours. }}SADAD operates 24 hours a day. }}SPAN operates on a 24-hour cycle.
Clearing cycle details SARIE }}SARIE settles transactions in real time and with immediate finality. }}SARIE uses its proprietary electronic network to transmit payment instructions. Payment instructions are based on SWIFT standards. }}Payments are processed from 09:00 to 15:30 AST, Saturday to Wednesday, and from 9:30 to 13:00 AST on Thursday. }}Settlement takes place across the participant banks’ correspondent accounts at SAMA. }}Participant banks’ net positions are settled between 15:30 and 15:45 AST, Saturday to Wednesday, and between 13:00 and 13:15 AST on Thursday.
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ACH }}Cheques drawn on bank accounts based in Riyadh, Jeddah and Dammam and deposited locally are processed electronically by the ACH. Final settlement is via SARIE. Funds are available to beneficiaries on a T+1 basis. }}Cheques drawn outside of SAMA’s three regional clearing centres are processed manually by SAMA’s seven remaining branches. Final settlement is via SARIE. Funds are typically available to beneficiaries within two days. }}Foreign currency cheques can take from five to 21 working days to clear. SPAN }}Payment card transactions are settled via SARIE on a same-day basis and with immediate finality.
Currency centre holidays* 2nd half 2015 2016
22–25 Sep** 4–6 Jul**, 10–13 Sep**, 23 Sep ** The date shown may vary by plus or minus one day. These dates are derived by converting from a nonGregorian calendar (e.g., Muslim or Hindu) to the Gregorian calendar. Some of these dates cannot be determined in advance with absolute accuracy, even by the governing authorities. In the case of Muslim dates in particular, the feast days are determined by the sighting of a new/full moon. * Source: www.goodbusinessday.com.
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CASH MANAGEMENT }} Domestic Notional pooling }}Notional pooling is permitted between resident and non-resident companies. }}One or more legal entities may be included. However, prior regulatory approval from SAMA is required. Cash concentration }}Cash concentration, particularly zero and target balancing, is permitted between resident and non-resident companies. }}One or more legal entities may be included. However, prior regulatory approval from SAMA is required. }}Cross-border sweeping is not permitted.
Cross-border }}Cross-border payments are routed via SWIFT and settled through accounts held with correspondent banks abroad.
Lifting fees }}Percentage-based fees are applied on funds transfers between resident and non-resident accounts.
Short-term investments }}Interest can be earned on resident and non-resident savings accounts and deposits and, subject to approval from SAMA, on current accounts. }}Demand and time deposits are available and have maturities up to one year. }}Islamic investment accounts are increasingly popular, linking banks’ profits to payments on time deposits to avoid Islamic prohibitions on interest. }}Treasury bills (T-bills) are issued weekly by SAMA in denominations of SAR 1 million for banks and other institutions. The minimum investment amount for retail buyers is SAR 50,000. T-bills are issued with maturities of one week and one, three, six and 12 months. }}Repurchase agreements (repos) are a popular method of short-term investment among large domestic banks. The majority of repos have maturities ranging from overnight to one week. Repos can only be arranged domestically and are exempt from withholding tax.
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Custody and securities settlement Information provided by www.globalcustody.net and www.tadawul.com.sa, 2015.
Depository }}Tadawul (Saudi Stock Exchange). }}Saudi Arabia’s Capital Market Law provides for the establishment of an Assets Services & Depository, which is solely entrusted to execute the transactions of deposit, transfer, settlement, clearing and registering ownership of securities traded on Tadawul. }}The functions of the Assets Services & Depository are currently operated by Tadawul. Settlement cycle }}T for equities. }}T+2 for debt instruments.
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ELECTRONIC BANKING }} }}Electronic banking is available in Saudi Arabia and offered by the majority of the country’s banks. }}There is no bank-independent electronic banking standard in Saudi Arabia; each bank offers its own proprietary system for corporate banking purposes. }}Services available include balance and transaction reporting and payment initiation. }}Corporate users of electronic banking are typically large companies. Fewer than 50% of small companies own a computer. }}Internet banking is offered by Saudi Arabia’s leading commercial banks. Saudi Arabia has an estimated internet penetration rate of 60.5%, approximately 16.5 million users. }}The online payment system, SADAD, is Saudi Arabia’s electronic bill presentment and payment (EBPP) system. }}Mobile banking is offered by a number of the country’s leading commercial banks. Account holders are able to access account information such as balance and transaction information via SMS messages, and to initiate payments. }}Saudi Arabia had an estimated mobile penetration rate of 181.6% at the end of 2013.
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TRADE FINANCE }} Trading partners* Import Export
China 13.5%, USA 13.2%, South Korea 6.6%, Germany 6.5%, India 6.3%, Japan 6%. USA 14.2%, China 13.6%, Japan 13.6%, South Korea 9.9%, India 8.2%, Singapore 4.3%. * The World Factbook 2013-14. Washington, DC: Central Intelligence Agency, 2013 (www.cia.gov/library/publications/the-world-factbook/index.html).
Imports Documents }}In order to import goods into Saudi Arabia, a customs declaration, commercial invoice, certificate of origin, packing list and transport document are required. Licences }}Special approval from the Saudi authorities is required in order to import animals, meat products, seeds, books, tapes, movies, archaeological artefacts, armaments, ammunition, chemical and pharmaceutical products, and certain items containing alcohol. Taxes/tariffs and other fees }}Saudi Arabia is a member of the Gulf Cooperation Council (GCC). The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. }}A GCC Customs Union with a common external tariff came into effect in 2003. No import tariffs apply to imports from within the GCC. }}As a member of the Greater Arab Free Trade Area (GAFTA), Saudi Arabia has eliminated most trade tariffs with GAFTA’s 16 other member states. }}GAFTA has established a bilateral free trade agreement with the USA. }}A customs duty of 5% is generally applied to imports from outside the GCC. }}Higher rates of 12% and 20% apply to certain imports and rise to 100% for tobacco products. Prohibited imports }}A negative list (of products that may not be imported) is in operation. }}Imports from Israel are prohibited.
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Exports Documents }}In order to export goods from Saudi Arabia, a customs declaration, commercial invoice, certificate of origin, packing list and transport document are required. Licences }}Licences are not required for the majority of exports. Taxes/tariffs and other fees }}No taxes are charged on exports from Saudi Arabia. Prohibited exports }}Exporting items to Israel is prohibited. }}Re-exporting certain imports, to benefit from government subsidies, is also prohibited.
Financing imports and exports Imports }}There are no financing requirements for imports. Exports }}There are no financing requirements for exports.
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USEFUL CONTACTS }} Saudi Arabian Monetary Agency Leading banks:
Al Rajhi Bank
National Commercial Bank
Riyad Bank
Samba Financial Group
The Saudi British Bank
www.sama.gov.sa www.alrajhibank.com.sa www.alahli.com www.riyadbank.com www.samba.com.sa www.sabb.com
King Abdullah Financial District
www.kafd.com.sa
King Abdullah Economic City
www.kaec.net
Ministry of Finance
www.mof.gov.sa
Ministry of Commerce and Industry
www.mci.gov.sa
Riyadh Chamber of Commerce and Industry
www.riyadhchamber.org.sa
Saudi Arabian General Investment Authority
www.sagia.gov.sa
Saudi Stock Exchange
www.tadawul.com.sa
Capital Market Authority
www.cma.org.sa
SADAD Payment System
www.sadad.com
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