By Innovation-sa on January 8, 2018 in News

The General Authority of Statistics (GaStat) Q3 labor report indicated a drop of 5.8 percent in the Kingdom’s overall unemployment rate among Saudis during the third quarter of 2017 in comparison to the second quarter. Although there has been an increase in the number of new jobseekers in the Saudi market, the Kingdom’s unemployment rate remained stable at 12.8 percent. Saudi Arabia now stands 12th among G20 countries in terms of average drop in the rate of unemployment.

The report also indicated that 54.8 percent of the populations are engaged in some sort of economic activities, of which 78.4 percent are males and 19.9 percent are females. Reforms and programmes undertaken by the Council of Economic and Development Affairs (CEDA) to empower uplift and support Saudi women to take up jobs succeeded in lowering the unemployment rate among Saudi women to 21.1 percent in third quarter from 22.9 percent in the second quarter.

During the third quarter, there were 1,231,549 unemployed Saudis of which 1,040,727 were women and 190,822 were men.31.3 percent of the overall jobseekers belonged to the highly productive age group of 25-29 years and interestingly, 45.8 percent of the job hunters were university degree holders.

Meanwhile, the GaStat analysis of the third quarter of 2017 indicated that 94,390 foreign employees opted to leave the Kingdom in Q3 of 2017, largely due to Saudization in several job sectors and an exceptional increase in living cost. The number of expats working in the Kingdom’s public and private sector was around 10.79 million in Q2 which reduced to 10.6 million in Q3.

The number of visas issued during the third quarter of 2017 totalled 509,180 with 22.3 percent visas issued in the public sector and 39.9 percent in the private sector. Around 37.8 percent visas were issued to recruit domestic employees.


By Innovation-sa on January 8, 2018 in News

Saudi Arabia announced plans to grant tourist visas for visitors from 65 nations under the Saudi Arabia Muslims’ Destination initiative. The initiative, launched by Saudi Commission for Tourism and National Heritage (SCTH) is another vision of Kingdom’s National Transformation Program 2020.

Being the cradle of Islam and a major destination for Muslims, Saudi Arabia, through this initiative targets pilgrims and visitors, Muslim business visitors, government guests and Muslim transit passengers. In the initial stage of its implementation, visitors from 65 countries can obtain tourist visa to Saudi Arabia through travel agency packages, quoted Mohammed A.Al-Amri, General Manager of SCTH in Makkah region.

At present, a total of 13 historic places and 10 museums have been chosen by the commission to be part of the tourism package. The program will allow pilgrims to extend their Umrah packages as well. Last year, out of 6.7 million pilgrims who arrived at the holy city of Makkah and Madinah, around 3000 pilgrims extended their stay in the Kingdom and this number is expected to increase this year as more tourism companies and Umrah establishments will complete their registration soon.

Through the initiative, the Kingdom aims to serve pilgrims and visitors and thereby achieve the goal of Vision 2030 to increase the number of pilgrims, enhance private sector contribution to tourism, cooperate with the public sector to develop infrastructure and highlight the historic heritage of the Kingdom, said Khalid Tahir, director of Saudi Arabia Muslims’ Destination initiative.


By Innovation-sa on January 1, 2018 in News

Saudi Arabia raised fuel prices with effect from January 1, 2018. The initiative is part of a program that aims at gradually eliminating energy subsidies as the Kingdom seeks to overhaul its economy and balance the budget. The price of Octane 91 increased from 0.75 riyals to 1.37 riyals per liter while that of Octane 95 increased from 0.90 riyals to 2.04 riyals per liter.

The rate of diesel for transportation purpose will remain unchanged at 0.47 riyals per liter. Kerosene prices will also remain unchanged at 0.64 riyals per liter.

Diesel for industries and utilities will now be available at 0.378 riyals. The prices are inclusive of Value Added Tax (VAT).


By Innovation-sa on January 1, 2018 in News

Global tech giants Apple Inc. and are engaged in licensing discussions with Saudi Arabia as part of Crown Prince Muhammed bin Salman’s move to give the Kingdom a high-tech look.

SAGIA, Saudi Arabia’s foreign investment authority, is expected to complete licensing agreement with Apple in February and Apple targets to open its first retail store in the Kingdom in 2019. According to market researcher Euromonitor, Apple is currently the second most sought after mobile brand in the Saudi markets after Samsung.

Amazon’s discussions, which are being carried out by Amazon Web Services (AWS), the company’s cloud computing division is at an earlier stage than Apple and no specific date has been announced for its investment plans. Earlier this year, Amazon acquired Dubai-based online retailer, and since then Amazon gained permission to sell its retail goods in the Kingdom. Though both Apple and Amazon have not established their direct presence in Saudi Arabia, they have been selling their products in the Saudi markets via third parties.

Over the past year, Saudi Arabia has been streamlining several of its overlapping laws that could apply to cloud computing to attract service providers.

Since then, Kingdom has entered into a $45 billion technology investment fund with Japan’s Softbank Group and announced $500 billion mega investment city with more robots than humans.


By Innovation-sa on January 1, 2018 in News

The Saudi Real Estate Refinance Company (SRC) has signed a strategic deal of SR1 billion with Bidiya Home Finance to purchase a portfolio and provide mortgage refinancing facility. This is the second strategic deal signed by SRC in two weeks. Earlier, SRC entered into another refinancing partnership of SR1 billion with prominent real estate financing company, Deutsche Gulf Finance (DGF). The deal will support Bidiya Home Finance to offer more accessible home financing solutions and increase home ownership among Saudis, said Majed AL-Hogail, Saudi Minister of Housing.

One of the goals of Vision 2030 in the housing and real estate sector is to increase the rate of home ownership from 47 to 52 percent in 2020, by providing easily accessible housing finance solutions that will directly facilitate home buyers and boost market growth. The collaboration with Bidiya Home Finance will be another landmark deal which would contribute to the realization of Vision 2030.

SRC, owned solely by Public Investment Fund (PIF), was established in October this year to create a secondary home finance market in Saudi Arabia by increasing liquidity in the Saudi mortgage market.


By Innovation-sa on January 1, 2018 in News

The General Authority of Zakat and Tax (GAZT) announced that tourists and Hajj and Umrah pilgrims from non-Gulf Cooperation Council (GCC) countries will be provided with a refund of Value Added Tax (VAT) amount they paid on purchases made in the Kingdom. However, GAZT is still working on the mechanism to reimburse VAT to tourists and pilgrims, said Hamoud Al-Harbi, director of VAT operations at GAZT. The process, mechanism, rules and payment modes are yet to be established and will not be implemented in the early months of 2018, he added. In addition to providing the required proof of VAT payment made on products and services, pilgrims and tourists arriving from non-GCC countries should also submit an application to obtain VAT reimbursement.

GAZT is also studying the prospect of opening reimbursement offices at airports and land borders with countries other than GCC nations. Harbi further clarified that pilgrims and tourists who live in the GCC countries will not be exempted from VAT. The implementation of 5 percent VAT in Saudi Arabia is to take effect from January 1, 2018 and more than 83,000 companies in the Kingdom have registered to VAT.



By Innovation-sa on December 24, 2017 in News

Custodian of the Two Holy Mosques King Salman unveiled Saudi Arabia’s biggest ever budget in history, demonstrating the Kingdom’s optimism towards economic diversification and private sector expansion.

The budget is projected at $260.8 billion in 2018, which is slightly higher than Saudi Arabia’s 2017 budget of $250 billion.

King Salman announced that dozens of programmes have been launched within the guidelines of Vision 2030 to diversify the economic base, empower the private sector and improve the living standard of citizens.

Through this expansionary budget and additional spending by development funds, the Kingdom plans the highest level of government spending next year, when the expenditure will hit more than SR 1.1 trillion.

The National Development Fund will allocate fund for housing, industrial and mining projects as well as for stimulating private sector. The Public Investment fund (PIF) will also fund new and existing projects in 2018.

Saudi Arabia projects to bring around SR 783 billion in revenue in 2018, in comparison to SR 692 billion in 2017.

Despite huge spending, Kingdom aims at narrowing the budget deficit next year to less than 8 percent of GDP, approximately SR 195 billion. The Kingdom expects to balance the books by 2023.

The expansionary budget for 2018 focuses on redesigning the Saudi economy by reducing the dependence on oil, reducing subsidies, creating jobs for male and female citizens and recommitting to invest in the future productive capacity of the economy. The ease in fiscal policy would help the Kingdom’s economy grow faster.

The government intends to cut energy subsidies next year because of which fuel prices are set to rise by 80 percent in January 2018. The move is widely expected to free up funds for other parts of the economy such as infrastructure.

Saudi economy was heading to a mild recession of minus 0.5 percent in mid-2017. With the rise in oil prices, the economy is expected to leap to 2.7 percent in 2018.


By Innovation-sa on December 24, 2017 in News

The General authority of Zakat and Tax (GAZT) confirmed that more than 80,000 businesses in Saudi Arabia have registered for Value Added Tax (VAT) which will be implemented on January 1, 2018.

Earlier, GAZT called upon companies and businesses operating in the Kingdom with an annual revenue exceeding SR 1 million to register for VAT before December 20, 2017.

GAZT also warned that companies who fail to complete the registration process before the allocated time will be exposed to a fine of SR 10,000, in addition to other penalties related to non-compliance of tax returns and non-payment of tax on time.

However, registration deadline for entities with annual income between SR 375,000 and SR 1,000,000 is December 20, 2018.

Registration of establishments with annual income between SR 187,500 and SR 375,000 are optional, while businesses with annual revenue less than SR 187,500 are exempted from VAT registration.


By Innovation-sa on December 21, 2017 in News

Saudi Arabia’s King Salman approved the allocation of 72 billion Saudi riyals ($19.2 billion) to boost the Kingdom’s private sector, Saudi Press Agency reported on Thursday. The measures which primarily focus on housing and SMEs are part of a four-year, 200 billion riyal stimulus programme announced earlier by the government to support private companies, said Fahad Al-Sukait, a cabinet advisor.

The package will allocate 21.3 billion riyals for housing loans, 10 billion riyals to support economic projects and 1.5 billion riyals to help companies in financial crisis. The government will create a 2.8 billion riyal fund to invest and uplift smaller companies. Moreover, the royal decree allocated 7 billion riyals to support SMEs by refunding government service fees.

The package will also focus on developing the Kingdom’s broadband and fibre optics infrastructure as well as developing modern techniques in the construction sector. Through the economic stimulus program the government aims at uplifting the Saudi economy from the recent financial crisis caused by fall in oil prices. The package also includes measures designed to accelerate the growth of private sector companies in the Kingdom.



By Innovation-sa on December 19, 2017 in News

Saudi Arabia’s Ministry of Finance announced on twitter that the Kingdom is all set to impose monthly levy on expats which will range between SR 300 and SR 400 in 2018 depending on the percentage of foreign employees with respect to Saudi employees in private sector companies.

It added that companies operating in private sector will have to pay levy for their employees. With the implementation of levy, the government aims to replace expatriates with Saudi employees.

Earlier in 2016, the ministry announced a levy of SR 400 in 2018 followed by SR 800 in 2020 for private companies which hire more foreigners than locals.

However, in private companies with greater percentage of local employees than foreigners, expat levy will be limited to SR 300 in 2018 which will gradually rise to SR 700 in 2020.

Recently, Saudi Arabia has been involved in the implementation of expat levy, dependent fee and possible introduction of VAT in 2018, all as a measure to diversify its economy from the oil sector.