Saudi Arabia’s Commerce and Investment Ministry has called on the public and interested parties to give their feedback on draft Implementing Regulations to the Kingdom’s Commercial Franchise Law by 20 February 2020. The Ministry said the Regulations aim to encourage franchise businesses and set strong foundations for their activities. It also aims to ensure details about the rights, duties, and risks related to each opportunity are properly disclosed.
Saudi Arabia’s King has issued a Royal Decree to amend the tax objection procedures for income tax, excise tax and VAT. The Decree states ‘Anyone against whom a decision has been issued by the commission may object to it in accordance with the provisions of the work rules of the committees for adjudication of tax violations and disputes’. It applies to Article 66(a) of the Income Tax Law, Article 49 of the VAT Law and Article 27 of the Excise Tax Law. The Deputy Prime Minister, Ministers and heads of relevant independent bodies have been instructed to implement it as appropriate.
Saudi Arabia’s Labour and Social Development Minister has announced Saudisation requirements for health and safety jobs in the Kingdom. For positions in mega, big and medium enterprises only Saudis will be considered for professional and practitioner positions. The requirements have been included in a Ministerial Decision and are supported by the Human Resources Development Fund. A timetable for the completion of this development has also been announced along with Saudisation guidelines.
Saudi Arabia: Amendments to Collection of Zakat from Commercial Enterprises to be Implemented in 2020
Saudi Arabia’s The General Authority of Zakat and Tax has announced that amendments introduced on collection of Zakat from commercial enterprises will be implemented on 1 January 2020. The aim is to make Zakat collection procedures easier and clarify the items that are subject to the Zakat including in the insurance section. The amendments follow the issue of Saudi Arabia Administrative Decision No. 2216/1440 on 7/7/1440 which targets commercial enterprises of Saudis and of the Gulf Cooperation Council entities operating in the kingdom.
Saudi Arabia’s Labour and Social Development Minister has issued a Decision cancelling the yellow band under the Nitaqat system. All companies which fell under this band will now be transferred to the red band. The Decision will come into force on 28 December 2019. The aim is to encourage businesses to increase Saudisation rates.
Saudi Arabia signs new agreement to nationalize thousands of jobs in the industrial sector. The Ministry of Labour and Social Development, represented by its deputy minister, Abdullah Abu Thunain, signed a memorandum of understanding (MoU) with the Ministry of Industry and Mineral Resources, the Technical and Vocational Training Corporation, the Saudi Human Resources Development Fund, and the Council of the Saudi Chambers.
The MoU establishes a partnership aimed at raising Saudization rates and promote the private industrial sector by nationalizing over 35,982 jobs in the industrial sector by 2021, after activating programmes and incentives supporting employment and training of nationals.
Saudi Aramco has published its Initial Public Offering prospectus. The prospectus states it will sell 0.5% of its shares to Saudi nationals, qualifying resident expatriates and GCC citizens. 1 billion shares will be available to private shareholders. However, the prospectus does not contain any information on the total percentage of the company which will be sold, the level at which the shares will be priced and an estimate of the total value of Aramco. Various groups will now travel across Saudi Arabia, the wider Gulf region and elsewhere around the world to ascertain how much support there is for the Initial Public Offering. This process will start on 17 November and will close on 28 November for individual investors and 4 December for institutions. Private investors who buy shares and who hold them for at least six months after trading begins in December, will receive bonus shares up to a total of 100 shares.
First Cooperation Agreement Between Saudi Arabia’s Monetary Authority and Dubai’s Financial Services Authority
Saudi Arabia’s Monetary Authority has signed its first cooperation agreement with Dubai’s Financial Services Authority. It was signed by the Agency’s Governor, Ahmed Al-Kholifey and the Authority’s Chairman, Saeb Eigner. It is aimed at strengthening mutual cooperation in banking and insurance activity supervision. It will also facilitate the exchange of information and oversight of institutions supervised by the respective authorities in Saudi Arabia and the Dubai International Financial Centre. In addition, it will allow secondments for employees from both the Authorities to the other.
Saudi Arabia’s Energy Minister has announced the Kingdom is considering introducing a carbon trading system in the country. It will be aimed at reducing greenhouse gas emissions. This kind of scheme involves a cap-and-trade system or credits which pay for or offset greenhouse gas reductions.
Foreign nationals seeking short-term work authorisation in Saudi Arabia are currently unable to obtain a Work Visit Visa, following an unexpected decision by immigration authorities to replace the Work Visit and Commercial Visit Visas with a uniform Visit Visa for Business.
The Ministry of Foreign Affairs’ electronic system used by visa sponsors to obtain visa invitation letters continues to allow applicants to choose between Work Visit and Commercial Visit Visas. Despite having a visa invitation letter for Work Visit Visas, applicants are issued Visit Visa for Business with the notification ‘not permitted to work’. This appears to be a practice in Saudi consular posts and visa service centres around the world.
Saudi immigration and labour authorities have not issued any formal notification withholding the issuing of Work Visit Visa which, until now, was the only immigration authorisation for foreign nationals seeking short-term work in the Kingdom.
With immediate effect, there is no option available for foreign nationals travelling to Saudi Arabia for short-term work other than the standard Work Visa, which triggers a formal long-term employment relationship with a sponsoring company in Saudi Arabia.
It remains unclear what is permissible and prohibited under the uniform Visit Visa for Business, including whether visitors can conduct hands-on technical activities, or if they are limited to performing ‘light’ business activities only (including meetings). It is also unclear whether Saudi immigration and labour authorities have made any provisions for foreign nationals seeking short-term work in the Kingdom, considering the only authorisation of this kind is no longer available.