Saudi Arabia

Market overview

After weeks of imposing a 24-hour curfew in most cities, Saudi Arabia has implemented a three-phase easing of restrictions. The Kingdom lifted all lockdown procedures and permitted operations to resume across all sectors on 21 June.

Malls, cinemas and dine-in restaurants have been allowed to resume their activities, albeit with strict limitations on capacity, mandatory wearing of masks, and social distancing measures in place. Gatherings of no more than 50 people are allowed, and strict fines are in place to respond to any breaches in social distancing measures.

While Saudi Arabia's Ministry of Human Resources had expected a 100% return to the office by 21 June, this has been pushed back by a week, with only 75% of staff allowed to return on that date.

Domestic flights have resumed across Saudi Arabia. The suspension of international flights is still in effect until further notice, but Saudi Arabia will allow residents with valid visas to travel back to their home countries as part of an initiative called Awdah (ireturn). Residents who wish to return to their home countries can submit an application on the Absher online platform. Surveys reveal that the virus is taken seriously by people in Saudi Arabia, with residents doubting a return to normal within the coming months. The majority expect to continue wearing face masks even after the pandemic is over.

For more information on doing business in Saudi Arabia, visit myNZTE - our free online portal for curated, in-depth information and guidance. 

Resources for Saudi Arabia

Export support
Video
6:33
Last updated: 26 May 2020
COVID-19 Market Realities: Saudi Arabia Dairy, 20 May

NZTE Business Development Manager Hiba Abu Reyaleh and Beachhead Advisor Graham Hamilton discuss Saudi Arabia's dairy industry. Recorded 20 May 2020.

Watch now
Export support
Podcast
4:23
Last updated: 13 May 2020
COVID-19 update for Saudi Arabia – VAT and Vision 2030, 14 May

Hazim Al Madani, Saudi lawyer and NZTE Beachhead Advisor, discusses the introduction of 15% VAT in Saudi Arabia and the impact of COVID-19...

Watch now
Export support
Podcast
7:55
Last updated: 6 May 2020
COVID-19 – Construction in Saudi Arabia and the UAE, 7 May

Anirudh Sharma, NZTE Business Development Manager in Dubai, discusses short and medium-term COVID-19 impacts on the construction industry in the UAE.

Watch now

Economy and trade

Saudi Arabia has introduced several measures to help boost the economy in response to the COVID-19 pandemic and subsequent drop in oil prices.

Cost of living allowances to families were suspended from 1 June, and Value Added Tax (VAT) will increase from 5% to 15% starting from 1 July.

Other measures taken by the Saudi government include a NZ$43 billion reduction in expenditure towards its Vision Realization Programs (VPRs), a series of initiatives aimed at delivering Saudi Arabia's Vision 2030, as well as spending cuts for some major projects in the pipeline for 2020.

Government support

In response to the public health crisis, the Saudi Government has implemented urgent measures to mitigate the impact of the COVID-19 outbreak on economic activities. It announced a stimulus package of SAR 120 billion (NZ$54 billion) to support the private sector, especially SMEs, and to maintain the financial sector stability. The Government also confirms its determination to meet its financial obligations in accordance with their due dates.

Saudi Arabia has signed a $ 256 million deal with China's Beijing Genome Institute to supply the Kingdom with 9 million COVID-19 test kits, 500 specialist technicians and 6 test laboratories. This agreement will enable the kingdom to test up to 14.5 million people, almost 40% of the population.

As current G-20 chair, Saudi Arabia has recently pledged an additional US$500 million to support global efforts to combat the COVID-19 pandemic. This contribution came in response to calls to help bridge an US$8 billion funding gap to deliver a vaccine.

Saudi Arabia (as the largest oil exporter) has been challenged by an acute drop in oil prices. Travel restrictions following the COVID-19 pandemic have sharply reduced global demand on for oil, and with the flood of supply, oil prices have fallen by over 50% since the start of the public health crisis. The reduction of oil prices is likely to put extra pressure on the Government budget, which may spill over to the rest of the economy, at least in the short term.

The negative impact of the COVID-19 outbreak on foreign trade is likely to affect the Saudi balance of payments this year. The magnitude of this impact will largely depend on Saudi export oil prices.

Major Saudi energy companies have contributed SAR 525 million to Saudi Arabia's Health Endowment Fund to support the government in the fight against the COVID-19 pandemic.

Supply chain, logistics and freight

Overview

The Kingdom is continuing to receive goods through all its Air Cargo Terminals around the clock, where shipments must be cleared by customs within two hours.

Vital products such as F&B, pharmaceuticals and medical equipment are given priority clearance by customs employees as soon as this cargo arrives. However, companies will still need to provide SFDA approval and the GDP certificate for pharmaceutical products.

In an attempt to ease import restrictions, Saudi authorities are currently accepting electronic copies of "Certificates of Origin" (rather than the original, signed and stamped one).

It is observed that there is a loosening of the need for customer invoice and other export documents to be authenticated by a Chamber of Commerce in the exporting country.

There is also a general trend for suspension of the need for consular/embassy authentication of original documents (health and halal certification, invoices etc) and the acceptance of unauthenticated export documents for import clearance purposes.

The situation is dynamic and rapidly evolving, and New Zealand exporters and their import partners should confirm the latest situation directly with the Saudi border agencies.

F&B shipments from Europe failing to submit necessary documents due to the closure of regulatory agencies in these countries are being temporarily exempted.

Cargo companies still operating in Saudi Arabia include Saudi Airlines, DHL, Emirates, FlyDubai, Cargolux and Lufthansa. Etihad Airlines will also enter the freight business soon.

Shipments may take longer to clear due to necessary precautions to sterilise ports and customs facilities. Planes also must be sanitised, and workers have to wear masks and gloves before entering aircraft or touching goods to keep them safe.

Customs duty changes

On 28 May, the Saudi Customs Authority increased the customs duty rates for 3,000 products, with almost 600 Harmonized System (HS) codes affected. These changes will come into effect starting from 10 June 2020. Red meat, dairy products, poultry and basic foodstuffs, as well as items such as building materials and equipment, will be the products most affected by these changes.

New Zealand importers into Saudi Arabia should review current product lines against the relevant HS codes to quantify the impact on their supply chain. You can access the full list of the affected products here. This list is currently available in Arabic only, and NZTE Riyadh highly recommends that New Zealand exporters download the Saudi Customs mobile app which allows users to search for HS codes and review the duty rate by product.

To use the app, follow the steps below:

  1. Search for and download the Saudi Customs app to your mobile

  2. Navigate to and click on the section called Tariff

  3. Enter the HS code you are looking for in the search box on the top of your screen

  4. The tariff corresponding to the HS code searched will appear on the page.

These changes in custom duties will present an increase in current and future import costs. New Zealand companies will need to review supply chain agreements and engage relevant stakeholders to discuss the impact of these changes and agree on who will pay for the extra import costs.

Tradeshow and event information

Numerous international tradeshows and events are being postponed or cancelled in response to the COVID-19 pandemic.

Make sure you proactively check with organisers for any tradeshow or event you're scheduled to attend – conditions and regulations are changing rapidly overseas, and events may be postponed or cancelled at short notice.

Below is the status of major Saudi Arabia tradeshows and events that NZTE's teams are aware of.

If you have questions about an event not listed here, please contact the organisers in the first instance or get in touch with NZTE for further advice.

  • Intersec Saudi Arabia: the annual three-day event, which was scheduled to take place during 23 – 25 March, is postponed to 1– 3 September 2020

  • Saudi International Soft Drink & Vending Machine Expo: was scheduled to take place 5 – 6 April 2020 at the Riyadh International Convention & Exhibition Centre. The exhibition is cancelled.

  • The Saudi International Health Tourism Forum (SHIFT): was set to take place between 13 – 15 April 2020, has been postponed towards the end of the year.

  • The International Conference & Exhibition for Education: in conjunction with the Kingdom's presidency of the G20 summit, set to take place 4 – 7 April 2020, has been postponed to September 202.

  • Riyadh Travel Fair:  scheduled for 26 – 28 March 2020, postponed to 1 – 3 September 2020.

  • HIMSS Saudi Arabia Conference and Exhibition 2020 - scheduled to run in Riyadh from 5 – 9 April 2020, postponed to autumn 2020.

  • Riyadh International Bookfair: set to take place from 2 – 11 April 2020, postponed indefinitely .

  • Saudi HORECA Dammam: the biggest international food, beverage and hospitality exhibition planned for 14 – 16 April 2020, rescheduled to 2– 4 March 2021 at the Dharan International Exhibition Centre.


Sector insights

As is to be expected, numerous sectors have been affected by the COVID-19 pandemic. Below you'll find information on any COVID-19 effects across important sectors and industries in Saudi Arabia.

Banking and finance

Companies are still at low risk of facing delayed payments as well as banking or financial challenges in Saudi Arabia.

The Saudi Arabian Monetary Authority has announced a bundle of precautionary measures to mitigate the impact of the COVID-19 outbreak on different economic sectors. These include:

  • Easing financial transactions and improving payment solutions through electronic services

  • Restructuring outstanding credit facilities with no interest or additional fees

  • Providing funding for retail clients who have lost their jobs at private sector entities.

Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Covid19.govt.nz
COVID-19 helpline for businesses
Business.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
New Zealand Export Credit (NZEC)
MFAT Export Helpline
MFAT Safetravel
Callaghan Innovation
Immigration
Ministry of Health
WorkSafe New Zealand
myNZTE

Global agencies

World Health Organization (WHO)
Centers for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.