Doing business in Saudi Arabia and Yemen

1. Introduction to The Kingdom of Saudi Arabia
2. Saudi Arabian economy
3. Main sectors of the economy
4. Why invest in Saudi Arabia?
5. Doing Business in Yemen

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Learning Unit Summary

• It was the birthplace of the Prophet Muhammad (pbuh) and is the location of Islam's two holiest cities, Makkah and Madinah.
• Saudi Arabia is a major player on the regional political scene.
• Economically, Saudi Arabia is a giant in its region and, with 25% of the world's proven oil reserves, is likely to become even more important in future.

The Saudi Arabian Oil Company, or Saudi Aramco, is the world's largest oil producing company. Set up by Royal Decree in 1988, it assumed the duties of its predecessor, the Arabian American Oil Company (Aramco). Saudi Aramco has its headquarters in Dhahran, on Saudi Arabia's east coast. The company controls almost all of the Kingdom's vast hydrocarbon enterprises. Saudi Aramco's mission, as an integrated international oil company, is to engage in all activities related to the oil industry on a commercial basis and for profit.

Saudi Arabia exports more crude oil and natural gas liquids (NGL) than any other country, almost all of it through Saudi Aramco facilities on the Arabian Gulf and Red Sea coasts.

In 2000, the Central Department of Statistics' Demographic Survey put the population of the Kingdom at 20.8 million. Of the Saudi national population, 54.3% are male and 45.7% female. Currently, it is estimated that almost half the Saudi population is under the age of 20.

The most distinguishing feature of the Saudi Arabian economy is the extent to which formal planning has determined the direction of the economy. Although the Kingdom's main source of revenue remains oil, great efforts have been made to diversify the economy, to reduce dependence on oil revenues.

The Government, through the public sector, plays a major role in the Kingdom's industrial activity but, in recent years, the private sector has, with the Government's encouragement under the Kingdom's system of free enterprise, become increasingly involved in and responsible for industrial development and diversification.

The Kingdom of Saudi Arabia is the biggest free economic market in the Middle East. It acquires 25% of gross national Arab product and has the biggest oil reserve in the world (25%). Saudi Arabia is the most ideal environment for projects depending on energy consumption because it provides energy for investment projects with the least prices at global level. In addition, there are many natural resources in mining that are supported by the geographical location of the Kingdom making them of easy access to European, Asian and African markets. Saudi market has a high purchasing power and of continuing expansion.

The Saudi Riyal is one of the most stable currencies in the world. There was no significant change in its exchange value during the last 3 decades. There are no restrictions on foreign currency exchange and outgoing money transfers. Inflation rates in Saudi Arabia are very low and the Kingdom is endeavoring to sign bilateral agreements with an increasing number of countries regarding investment encouragement, protection and arrangement of taxation issues.

Doing Business in Yemen

Doing Business in Saudi Arabia