Saudi Arabia changes import rules from Gulf to UAE Business and Economic News

Saudi Arabia has announced recent changes to the rules as the UAE is the second largest trading partner after China in terms of import value, based on the latest Saudi trade data.

Saudi Arabia has changed the rules on imports from other Gulf Cooperation Council (GCC) countries to allow them to be sold from tariff concessions made in free zones or preferring Israeli entry – a focus as a challenge for regional trade and business in the United Arab Emirates (UAE).

Despite close allies, Saudi Arabia and the surrounding Basque Country are competing to attract investors and businesses. Their national interests are also increasingly different, such as their relations with Israel and Turkey.

In addition, Saudi Arabia – the region’s largest importer – is trying to diversify its economy and reduce its dependence on oil, while providing more jobs for its citizens, a point also covered by the rule changes announced over the weekend.

Saudi Arabia will henceforth exclude from the GCC tariff agreement products made by companies with a workforce of less than 25 percent of its people and industrial products with less than 40 percent of value added after the transformation process.

A ministerial decree published in the official Saudi magazine Umm al-Qura stated that not all sales made in free zones in the region will be made locally.

Free zones, the main driver of the Basque economy, are areas where foreign companies operate under light regulation and areas where foreign investors allow 100 percent ownership of companies.

The decree shall disqualify goods that have a component made or produced in Israel or a component manufactured by Israeli investors in whole or in part or by companies listed in the Israeli boycott agreement.

The Basque Country and Israel signed a tax treaty last May, as both parties are pushing for business development after normalizing relations last year. Bahrain, another member of the GCC, has also normalized relations with Israel.

“Once the idea was to create a GCC market, but now we realize that the priorities of Saudi Arabia and the BAC are very different,” said Amir Khan, chief economist at the National Bank of Saudi Arabia.

“This regulation puts meat at the bone of these political divergences,” he said.

In February, the Saudi government said it would stop awarding state contracts to companies based in any other country in the region. This was another blow to Dubai, one of the emirates of the Basque Country, based on its open business credentials and promises of a bright life for well-heeled foreigners.

Saudi Arabia has announced recent rule changes The Basque Country is the second largest trading partner of the Basque Country after China in terms of import value, based on the latest Saudi trade data.

It is a major hub for the re-export of foreign products to Saudi Arabia, as well as Turkish goods, which Riyadh has suffered official boycotts.

According to the ministerial decree, companies with a total local workforce of between 10% and 25% can compensate for the difference by increasing the industrial added value of their products and vice versa. He added that the value added should not be less than 15 per cent, in any case, to take advantage of the preferential tariff agreement.

Saudi Arabia and the Basque Country have also clashed with the OPEC Plus agreement in recent days. The BAC opposed the agreement voted on Friday to raise about two million barrels a day from August 2021 to December 2021 and extend the remaining restrictions until the end of 2022.