Recent Saudi Updates from Johnson & Pump Law

Upcoming Saudi Holidays, Events, Webinars, and Conferences

Public Sector and Significant Updates 

  • 2023 Budget Plan: Saudi Arabia has announced a $296 billion budget for 2023, with expectations for $301 billion in revenue and $4.26 billion in surplus.
  • Borrowing Plans: Saudi Arabia expects to borrow $12 billion this year after pre-funding a larger amount in 2022, according to the National Debt Management Center.
  • New Central Bank Governor: King Salman has appointed Ayman bin Mohammed bin Saud Al-Sayyari as the new governor of the central bank.
  • Immigration Crackdown: 16,288 illegal expats were arrested in one week in nationwide security campaigns across the Kingdom.
     

Corporate / Labor

  • NEOM Salary Inflation: NEOM and other Vision 2030 initiatives are reportedly driving a surge in new employment opportunities in the country while salaries are expected to rise by 3% in 2023.
     

Legal

  • Reference:
    • Al Tamimi Legal Magazine: For Al Tamimi Law’s latest magazine issue (focus is on Energy, Utility, Mining, and Transport & Logistics), see here.
  • Saudi Updates:
    • Airbnb-Like Rentals Permitted: Saudi citizens are now able to rent their homes to tourists, according to a bylaw approved by the tourism ministry.
    • CMA Companies Law Implementation Clarification: The Ministry of Commerce and the Capital Market Authority have clarified the mechanism of implementing the New Companies Law.
    • VAT Refund Applications: Eligible individuals not carrying out economic activities in the Kingdom and who have incurred VAT during calendar year 2022, are allowed to apply for a VAT refund by June 30, 2023.
    • RETT Interpretation Guide: The General Secretariat of Zakat, Tax and Customs Committees (“ZATCA”) has published a guide (in Arabic) on its official website explaining the Committees interpretation of the Real Estate Transaction Tax (‘RETT’) regulations and related appeal procedures. 
    • VAT Circulars: ZATCA has published a Circular (in Arabic) on its official website explaining the impact of real estate VAT exemption on proportional deduction calculation, a well as a circular (in both English and Arabic) on VAT treatment in the financial sector.
  • Saudi Analysis:
    • Regional Headquarters Program: For an analysis of Saudi Arabia’s Regional Headquarters Program by Clyde and Co, see here.
    • Antitrust Enforcement: For an analysis of developments in antitrust enforcement across the MENA region by White and Case, see here.
  • Gulf Updates:
    • No significant recent developments.
       

Visas, Travel, and COVID

  • Reference:
  • Updates:
    • Iqama Copy Rules: The General Directorate of Passports (Jawazat) clarified that expats carrying digital Iqamas do not need to bring physical copies. 
    • Stop-Over Transit Visas: Saudi Arabia has released four-day stopover visas with a stay at a hotel for one night which are available for travelers who book through Saudi Airlines and flynas. Holders of Holders of these visas are permitted to drive cars in the Kingdom, in a process done via the Absher Business platform.
    • Expat Marriages: The Ministry of Justice announced that visitors to the Kingdom can get married on transit visas.
       

Business / Economy 

  • General Economic:
  • General Business:
    • Tech Investments: According to the Minister of Communication and Information Technology, Saudi Arabia has attracted over $9 billion in investments in future technologies, including by U.S. giants Microsoft and Oracle.
  • Public Investment Fund (PIF):
    • Vertical Farm Investment: The PIF has signed a JV agreement with US-based Aero Farms to build and operate vertical farms across the MENA region.
    • Assets: The PIF now holds assets worth $607.42 billion and is the 6th largest sovereign wealth fund in the world, according to latest data from the Sovereign Wealth Fund Institute.
  • Finance, Insurance, VC, and Investment:
    • SVC Impact Report: The Saudi Venture Capital Company (SVC) has released its annual Impact Report.
    • Capital Markets Localization: Capital market institutions now have a 77% Saudization rate.
    • Events Investment Fund: Saudi Arabia has launched The Events Investment Fund (EIF) to support the culture, tourism, entertainment and sports industries. The fund will reportedly focus on “developing and increasing direct foreign investment opportunities for a contribution of 28 billion riyals ($7.45 billion) to the country’s GDP by 2045.”
    • NDF 2022 Impact: For an overview of the impact of the National Development Fund (NDF) in 2022, see here.
    • Bond Sale: Saudi Arabia raised $10 billion in its first Eurobond sale of 2023.
    • Fintech Growth: Fintech funding increased 11% to reach over $402 million year-over-year through August 2022, according to Fintech Saudi.
  • Real Estate, Construction, Infrastructure, and Megaprojects:
    • Diriyah Gigaproject: Crown Prince Mohammad bin Salman announced the Diriyah Project as the PIF’s fifth giga-project.
    • Oxagon Hotel: Neom’s Oxagon city will reportedly see its first hotel opening in 2025.
  • Industry, Utilities, Transportation, Logistics, and Non-Oil Energy:
    • IMI Shipping Agreements: International Maritime Industries (IMI) has signed 10 agreements worth $346 million at this year’s In-Kingdom Total Value Add 2023 (IKTVA) programme.
    • Aseer Road Upgrade: The Aseer region is set to receive a major road infrastructure upgrade as part of the kingdom’s plan to transform the area into a major tourist destination.
    • Samsung Modular Building Factory: Samsung C&T has signed an MoU with the PIF to build a factory making modular building elements in the Kingdom.
  • Tourism, Hospitality, Culture, Sports, and Entertainment:
    • 2023 Tourism Ambitions: Saudi Arabia aims to receive 25 million foreign tourists in 2023. Saudi Arabia registered over 18 million international arrivals in the first nine months of 2022, higher than any other Arab nation during that timeframe.
    • Year of Arabic Poetry: Saudi Arabia has designated 2023 as the “Year of Arabic Poetry.”
    • Vice Media Riyadh HQ: Vice Media Group is preparing to open its new regional headquarters in Riyadh’s Jax cultural district.
    • Leejam Sports MoU: Leejam Sports has signed an MoU with the Ministry of Investment to boost and expand sports investment and improve quality of life.
    • AMC Exit: AMC Entertainment Holdings Inc is selling its stake in a Saudi-joint venture almost five years after helping reintroduce cinema to the Kingdom.
    • Tourism Ambitions: For an analysis of Saudi Arabia’s tourism ambitions by FT, see here.
    • Hyatt Hotels: Hyatt said that one of its affiliates has entered into management agreements with Rua Al Madinah Holding Company to manage three new Hyatt-branded hotels.
  • Retail, Luxury, and E-Commerce: 
    • No significant recent developments.
  • Religion: 
    • No significant recent developments.
  • Science and Education:
    • No significant recent developments.
  • Healthcare:
    • No significant recent developments.
  • Technology and Telecom:
    • Satellite Internet: STC has announced plans to roll out high-speed satellite internet in 2023.
    • Lucid Motors Share Growth: Shares of Lucid Motors, the luxury electric vehicle manufacturer backed by the PIF, have surged over 90% in 2023 amid speculation that the sovereign wealth fund plans to buy out the company.
    • Zoom Data Center: Aramco has partnered with Zoom to build the company’s first global data center in the Kingdom.
  • Defense: 
    • No significant recent developments.
  • Food and Agriculture:
    • No significant recent developments.
  • Natural Resources, Mining, and Environment:
    • Mining Fund: Saudi Arabia has launched a mining fund owned by state-owned miner Ma’aden and the PIF that plans to invest up to $15bn of capital in overseas assets according to people familiar with the details, as the country works to reduce its dependence on fossil fuels.
    • Mining Data: The Ministry of Industry and Mineral Resources (MIM) has revealed that there are 377 mining complexes, 35 mineral belts, and over 20 commercially exploited minerals in the Kingdom, along with other important data. 
    • Locally-Sourced Uranium: According to the Kingdom’s energy minister, Saudi Arabia plans to use domestically-sourced uranium for its nuclear power.
  • Oil, Hydrocarbons, and Aramco: Oil prices most recently stood on February 6, 2023 at $78.89 pbb for Saudi oil (Arab Light) and $73.83 pbb for West Texas Intermediate (WTI).
    • Oil Strategy: For an analysis of Saudi Arabia’s oil strategy by FT, see here.
    • Price Hike: Aramco unexpectedly increased most prices for Asian crude, with Arab Light grade lifted to $2 a barrel above the regional benchmark, 20 cents more than the price for this month, marking the first increase for the grade since September. The Kingdom’s energy minister reiterated that Saudi Arabia will remain cautious about raising oil production.
    • Iktva Forum: Aramco signed over 100 agreements and MoU’s, valued at around $7.2 billion to help advance a diverse, sustainable and globally competitive industrial ecosystem at the 7th edition of the In-Kingdom Total Value Add (iktva) Forum and Exhibition.
    • Aramco Trading Americas: Aramco has announced the 100% acquisition of Motiva Trading by the Aramco Trading Company (ATC), one of the world’s leading commodity trading companies, and the launch of Aramco Trading Americas LLC (ATA), a wholly-owned subsidiary of ATC.
       

Geopolitical

  • Projecting Economic Influence: Saudi Arabia will no longer provide direct grants and deposits to foreign countries without strings attached, and has begun to condition its development assistance on the sort of ambitious economic reforms it has implemented at home.
  • Oman:
    • SEZ MoU: Saudi Arabia and Oman have signed an MoU to develop special economic zones between the two countries. The Saudi Fund for Development has signed a preliminary agreement to back an infrastructure development project worth $320 million in Oman’s Al-Dhahirah Special Economic Zone.
    • Communications Program: Saudi Arabia and Oman have signed an executive program to develop communications technology and ties, including in underseas cables.
  • United States: 
    • No significant recent developments.
       

Gulf

  • Resumption of Bahrain-Qatar Flights: Flights between Bahrain and Qatar are reportedly set to resume for the first time since 2017.
  • UAE:
    • Travel Information (reference): For current information from the U.S. Embassy in the UAE, see here and for travel information see here. For COVID statistics and information from the UAE government, see here.
    • Interest Rate Hike: The UAE Central Bank has raised the base rate applicable to its Overnight Deposit Facility (ODF) by 25 basis points, in line with the US Federal Reserve’s interest rate hike, changing it from 4.4% to 4.65%. This has been projected to slightly dampen the country’s property market.
    • Visa Changes: The UAE has launched a new digital service that allows the extension of all visa types for 60 days.
    • Emiratisation: The UAE Cabinet has issued a decision, amending some provisions of the country’s Emiratisation scheme in the private sector, including adjusting the annual target.
    • Abu Dhabi ADCCI Strategy: The Abu Dhabi Chamber of Commerce and Industry (ADCCI) launched a new three-year strategy that aims to bolster the private sector.
    • ADNOC Manufacturing Deals: The Abu Dhabi National Oil Company (ADNOC) has signed agreements with 23 UAE and international companies to boost local manufacturing across a wide range of industrial products worth $4.63 billion.
    • Pakistan Loans: The UAE has agreed to lend $1 billion to Pakistan and roll over an existing $2 billion loan.
    • South Korea Defense Ties: South Korean President Yoon Suk Yeol visited the UAE with the aim of expanding military sales.
  • Qatar: 
    • Travel Information (reference): For current information from the U.S. Embassy in Qatar, see here and for travel information see here. For COVID statistics and information from the Ministry of Public Health, see here.
    • Income Tax Amendment: Qatar has amended its income tax rules.
    • Airbus Dispute Resolution: Qatar Airways and Airbus have settled their longstanding dispute over surface degradation on some of the carrier’s A350 wide-body jets, describing the settlement as “amicable and mutually agreeable.”
  • Kuwait: 
    • Travel Information (reference): For current information from the U.S. Embassy in Kuwait, see here and for travel information see here. For COVID statistics and information from the Ministry of Health, see here.
    • Deficit: Kuwait unveiled budget proposals that forecast a deficit for the fiscal year starting April 1.
    • Work Entry App: Kuwait has announced the release of an app that will regulate work entry.
    • Cabinet Resignation: Kuwait’s government has resigned, less than four months after being appointed, as it tries to out-maneuver lawmakers seeking to pass legislation ministers say would strain state finances.
  • Bahrain:
    • Travel Information (reference): For current information from the U.S. Embassy in Bahrain, see here and for travel information see here. For COVID statistics and information from the Ministry of Health, see here.
    • Interest Rate Hike: The Central Bank of Bahrain has raised its key policy interest rate in line with rising global interest rates.
  • Oman:
    • Travel Information (reference): For current information from the U.S. Embassy in Oman, see here and for travel information see here. For COVID statistics and information from the Ministry of Health, see here.
    • Growth: The Sultanate of Oman ranked fifth in the Arab world in terms of the highest economic growth rates for 2023.
    • Turkey LNG Deal: Oman LNG has signed a binding term-sheet agreement with Turkish state-firm Botas to supply up to 1mn t/y of LNG from 2025.
       

Regional

  • IMF MENA Growth Forecast: According to the IMF’s latest World Economic Outlook update, economic growth in the MENA region will slow to 3.2% this year from 5.4% in 2022, before rising to 3.5% next year.
  • Deloitte Point of View Magazine: Deloitte has released its Point of View Magazine covering the Middle East for Winter 2022.
     

Miscellaneous and Interesting

  • NEOM Construction Progress: For an overview of construction progress at NEOM, see here.
  • Trojena Renderings: Renderings have been released of the Trojena mountain resort in Neom.
  • SAMA Governance History: For an overview of the history of the governance of the Saudi Arabian Monetary Authority (SAMA), now the Saudi Central Bank, see here.
  • Gulf Sovereign Wealth Boom: For an analysis of the Gulf’s booming sovereign wealth fund landscape, see here.
  • Bechtel Executive Interview: For an interview with Bechtel’s Managing Director for Saudi Arabia on the company and its engagement with the Kingdom’s gigaprojects, see here.
  • Evolution of Education in the Kingdom: For an overview of the evolution and landscape of education in the Kingdom, see here.

Resources:

Internations (U.S. Expat Networking): Riyadh, Jeddah, Eastern Province

Commercial Law in Saudi Arabia

Chris Johnson

Managing Attorney
Johnson & Pump