According to the World Trade Organisation, Saudi Arabia could follow Australia and other countries and adopt plain cigarette packaging. The Kingdom has apparently notified the Organisation. No date for the introduction was given but when it does it will become the first GCC country to do so.
The General Supervisor of the Real Estate Regulation Sector in the Housing Ministry, Mazen Dawood, has confirmed requests to document all tenancy agreements using the Ejar system is aimed at regulating the rental sector rather than for tax purposes. He also confirmed residential units are not subject to VAT and added tenancy agreements concluded after 12 February 2018 should be registered in the system. Contracts which are not registered will be considered to be violating the law.
Saudi Arabia is planning to replace expatriates with Saudi nationals in 12 occupations within the next five months. The first phase of the latest Saudisation drive will cover salespersons in car and motorcycle shops, clothing stores, children’s clothing, men’s accessories, home and office furniture stores, and sales of household utensils. Implementation will begin on 11 September 2018. A second phase, two months later, will include watch shops, optician shops, electrical appliances and electronic shops, and the third phase, which will start in mid-January 2019, will target salespeople in medical equipment stores, construction materials shops, auto spare parts shops, carpet shops and confectionery stores. The Saudisation of these 12 professions was announced in January when Minister of Labour and Social Development Ali Al Ghafees issued a decree to limit work in them to Saudi men and women from the start of the New Hijri Year. A committee was formed to develop a programme for nationalising the 12 occupations and to coordinate with relevant authorities. Committee members have been drawn from the Ministry of Labour and Social Development, the Human Resources Development Fund (HADAF), and the Social Development Bank.
A draft pharmacies law is under consideration according to the Director for Legal Affairs at the Saudi Food and Drug Authority. Under the proposed law, there will need to be at least 1000 metres distance in each direction between two pharmacies. Each company will only be allowed to own 30 pharmacies and individual pharmacists will be able to own up to five pharmacies. The online sale of medicines and unauthorised selling of medical and herbal products will also be banned. Licenses issued for medical or herbal products will be valid for five years but will be renewable. There are also provisions on pharmaceutical factories. The technical director of a factory will have to be a full time Saudi pharmacist and have the appropriate qualifications. The Authority will conduct regular inspections and will also review medicine prices every five years. They will destroy any illegal products and issue appropriate penalties. This includes jailing violators for up to 10 years, fining them up to 10 million Riyals and if the person is a non-Saudi, deporting them. The Authority will also be able to revoke licenses and prevent individuals from working in the pharmaceutical industry.
LexisNexis, Marsden Int. and DWF in association with Harasani & AlKhamees are pleased to present a unique opportunity to hear from experts in their field on some of the most common pitfalls in KSA Labour Law. Join us for an interactive session with an esteemed panel of experts as we discuss topics such as; Pensions, End (more…)
This week the spotlight is on legal and regulatory developments in Saudi Arabia, where the National Centre for Privatisation and Public-Private Partnership has launched a consultation on a proposed PPP Law. The consultation ends on 29 July 2018. Following the three-week consultation, rules on foreign real estate ownership could be relaxed. The draft law outlines real estate ownership and labour law exemptions for foreign investors, amongst other prospective regulatory changes. If approved, bidders could also appeal PPP Government contracts within ten days though the relevant Government entity or the Centre’s website.
Elsewhere, the Capital Market Authority has issued the first two FinTech licenses in the Kingdom. The licenses have been issued to Riyadh-based start-ups Manafa Capital and Scopeer to provide crowdfunding investment services on a trial basis. The move is part of efforts to develop the FinTech sector in the country and the Authority will consider further license applications later in the year.
Saudi Arabia’s Shoura Council has agreed to amend the Ant-bribery Law issued by Saudi Arabia Royal Decree No M36/1412 as amended in 2015. The amendments were proposed by Atta Alsubaiti and Latifa Alshalan and seek to stress the provisions of the UN agreement on combating corruption. The amendments propose appointing a special employee for combating bribery and ensuring the implementation of transparency and integrity standards. The amendments are aimed at protecting public facilities from corruption in all its forms and ensure the soundness of investigations and trials for crimes subject to this law.
The index maker MSCI announced on Thursday 21st June the inclusion of Saudi stocks in its benchmark, the MSCI Emerging Markets, by June 2019. Saudi stocks will account for around 2.6% of global capitalisation.
The inclusion of Saudi Arabia in the MSCI Equity index would also be closely watched by bond market players.
Saudi equities entering the Emerging Markets benchmark is a strong signal of confidence for investors. For several months, Riyadh has made the necessary efforts to improve the regulation and especially the conditions of access for foreign investors to their stock markets.
The decision was eagerly awaited by local authorities, given the weight of the index among investors. The MSCI EM index serves as a benchmark for funds claiming more than $ 1.5 trillion in assets under management (20% of which are passive funds). Entering the index is therefore the insurance to get into the radars of the largest investment funds in the world.
The inclusion of Saudi Arabia is anything but a surprise, as the country has already incorporated a few weeks ago the emerging index created by FTSE Russell. For Riyadh this step is all the more important and symbolic seeing how the neighboring markets of Qatar and the United Arab Emirates had already joined the MSCI EM in 2014, while the largest stock market in the region (490 billion dollars of capitalization) remained at the doorstep.
Saudi stocks will weigh about 2.6% of the MSCI EM index. This will be done in two stages, in May 2019, then in August. With the upcoming IPO of Aramco, Saudi Arabia’s global financial weight could indeed increase in the future.
For now foreign investors hold only 1.8% of the Tadawul index, against 14% for UAE shares and more than 9% for Qatar. With the decision of MSCI, the country could attract $ 40 billion of additional flows according to Bassel Khatoun, CIO at Franklin Templeton Investment.
The Saudi Arabian Capital Market Authority (CMA) and the Saudi Stock Exchange (Tadawul) have been demonstrating an extraordinary commitment in the past couple of years to privatization and opening up their markets to foreign investors.
CMA and Tadawul have implemented several enhancements that have increased the opening of the domestic equity market to international institutional investors. Following the introduction by the CMA in 2015 of regulations for approved foreign financial institutions, the methods of access to the stock market have moved from indirect participations via derivative instruments, such as P-notes and / or SWAPs, to direct participations. Tadawul completed a complete redesign of its business model, including the introduction of a 2-day settlement and a cash-based delivery in April 2017.
Another breaking news to look out for… MSCI has also announced that it will include the MSCI Kuwait Index in its annual review of the 2019 market classification with a view to a potential reclassification of its status from a Frontier Market to an Emerging Market.
This goes to say, patience is key… vision 2030 seems to have stirred up curiosity across the globe and concrete steps on all sides are being taken. Let’s wait and see what investors will have to say…
Sources from the Saudi Arabian Housing Ministry have said it is likely the Ministry, through its electronic Ejaar rent system will start using unified contracts for the commercial sector by the last quarter of this year. The sources added the Ministry has referred the contract template to the Justice Ministry to consider before it is implemented.
Newspaper: Al-Madina, 4 June 2018
Saudi Arabia’s General Authority for Food and Medicine has announced it has completed an e-medicine system to track medicine from production to customers.
The aim is to ensure medicines are readily available and are safe. The Authority has placed barcodes on packaging and created the necessary technical infrastructure to host the movement details of medicines. They are also working with relevant parties including factories, importers, storage units and distribution centres, hospitals and pharmacies to implement the system.
