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Foreign owned retail stores harming Saudi economy
| Published: | 11 Jul at 6 PM |
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In what seems like yet another Saudization hit on expats within the kingdom, a report states that most retail outlets are foreign-owned, with most of the profits leaving the country.
Saudi Arabia is now ranked as one of the world’s most attractive retail locations, with most of its stores owned by expats and foreign companies, according to a Saudi economist. Fellow of the Saudi Economics Society Essam Khalifa told reporters that 80 per cent of the country’s retail outlets are fully owned by foreigners, with only between 10 and 20 per cent of profits earned benefiting the local economy.
According to Khalifa, many expat retailers use the kingdom as a first base for new products before expanding into other countries. This is possible, he said, through Saudis registering the businesses in their own names whilst they are actually owned by expats.
Khalifa stated that the kingdom is in a difficult position as its only exports come from its petrochemical industry. Weak export levels, he said, are also influenced by weak infrastructure, fake visas, the labour system, the high cost of staff and the recently imposed expat taxes.
He believes that the national economy is being harmed by the manner in which the current retail market is allowed to operate, saying that Saudi nationals should be unhappy that 80 per cent of retail profits are leaving the country. According to a retailer marketing imported Chinese goods, despite Saudi’s increasing inroads into expat-owned businesses it’s the country’s stability, diverse community and tax-free regime that is still attracting incomers to the retail scene.
Saudi Arabia is now ranked as one of the world’s most attractive retail locations, with most of its stores owned by expats and foreign companies, according to a Saudi economist. Fellow of the Saudi Economics Society Essam Khalifa told reporters that 80 per cent of the country’s retail outlets are fully owned by foreigners, with only between 10 and 20 per cent of profits earned benefiting the local economy.
According to Khalifa, many expat retailers use the kingdom as a first base for new products before expanding into other countries. This is possible, he said, through Saudis registering the businesses in their own names whilst they are actually owned by expats.
Khalifa stated that the kingdom is in a difficult position as its only exports come from its petrochemical industry. Weak export levels, he said, are also influenced by weak infrastructure, fake visas, the labour system, the high cost of staff and the recently imposed expat taxes.
He believes that the national economy is being harmed by the manner in which the current retail market is allowed to operate, saying that Saudi nationals should be unhappy that 80 per cent of retail profits are leaving the country. According to a retailer marketing imported Chinese goods, despite Saudi’s increasing inroads into expat-owned businesses it’s the country’s stability, diverse community and tax-free regime that is still attracting incomers to the retail scene.
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