Exporting to Saudi Arabia

Saudi Arabia is the largest country on the Arabian Peninsula and Africa's largest and the world's 20th largest economy. As the world's fourteenth-largest economy in terms of purchasing power parity, Saudi Arabia holds the position of the largest oil exporter in the world due to its rich oil resources. Due to the political tensions in recent years, trade with Turkey has been disrupted; however, recent positive approaches have led to attempts to reduce this tension. As a result of discussions on economic and commercial issues in new negotiations, new collaborations have been established, and the trade volume between the two countries has begun to grow.

Today, many companies are achieving commercial successes together with Saudi Arabia and are developing in export with various products from many sectors.

How to Export to Saudi Arabia?

With a population close to 35 million and a GDP per capita of $48,000, the country is one of the most important e-commerce centers in the Middle East, especially as the number of e-commerce site users is increasing. When looking at the general graph, Saudi Arabia, where young users are predominant, has increased its e-commerce revenues by 11% compared to previous years, in response to the increasing young population. During the pandemic, there was a shift towards e-commerce sites, and demand for foreign products increased. Ranking 49th in the e-commerce index, Saudi Arabia increased its cross-border e-commerce value to $5.2 billion in 2020, achieving an index value of 73.3 worldwide.

The Saudi Minister of Commerce highlighted that in 2022, the e-commerce growth figures in the country reached 32%, drawing attention to the e-commerce activities in Saudi Arabia. At this time, when e-export sites have also gained importance, companies have certain responsibilities. Firms choosing Saudi Arabia for export must closely monitor these commercial developments and understand their target audiences well. Regardless of how good your product is and your experience in the field, marketing the product constitutes half of the sale. With proper project management and financial decisions, you can stand out and start ahead of competitors in the products you export.

As ODS Consulting Group, we help you grow your target market and open to the global market, along with our various project supports in this field where we have gained experience for years.

What Are the Companies Exporting to Saudi Arabia?

There are several major e-commerce sites that users in Saudi Arabia commonly prefer. According to research, 11% of consumers shop on these sites daily. Most users are women, and the products they prefer are generally seen to be in the fashion sector and household items.

Many products from various sectors are included in exports from Turkey to Saudi Arabia. Leading the list are carpets and textile products, while many other products, from chemical substances to machine parts, are also included on this list. We can particularly see that our carpet exports have developed significantly. Machine and robot parts required by every country due to technology are also of great importance to Saudi Arabia. A portion of this need is met from our country. While the increase in the exchange rate has negative effects on imports, it can be advantageous for exporting companies with the right strategic steps. Companies need to pay attention to these details.

What Documents Are Required to Export to Saudi Arabia?

● The first thing to do would be to establish a company. There are five different types of companies operating in Saudi Arabia. These types are listed as Limited Company, Joint Stock Company, Joint Venture, Unlimited Liability Company, and companies with limited partnerships. After proving your company to the authorities in Turkey and Saudi Arabia, you can complete the requirements and start the export processes.
● Products to be exported to Saudi Arabia are controlled under certain standards. The SASO/Saber Registration System, which publishes the official standards of these products (Saudi Arabian Standards Organization), provides a document to companies indicating compliance with these standards during customs clearance. Without this mandatory document at Saudi Arabian customs, your products cannot enter the country. For the SASO/Saber document, commercial invoice, certificate of origin, bill of lading, insurance document, and loading product list may be requested. After the acceptance of these documents, your product will be inspected in SASO/Saber approved laboratories, and it will be determined whether it meets quality standards. If your product complies with SASO/Saber requirements, this document can be obtained easily.
● You must prepare overseas cargo delivery documents for your product.
● A commercial invoice must be prepared. This invoice contains several details about your product and is one of the necessary documents for sale.
● You will need to obtain a certificate of origin. The certificate of origin indicates that the exported product is produced and approved in the country of origin and that necessary procedures should be based on this country.
● Besides the SASO document, you are required to obtain quality certifications for certain products. GMark and IECEE certificates are required for household electronic products. Health certificates should be obtained for food and chemical products, particularly demonstrating that the food products comply with Islamic rules on halal slaughter and do not contain pork additives.
● Some documents are also required for micro-export, which is one of the easiest export systems. With the document called ETGB (Electronic Commerce Customs Declaration), you can facilitate all customs procedures. Through this document, transactions are carried out via authorized cargo companies, making the product clearance process quicker.

What Are the Export Taxes for Saudi Arabia?

Saudi Arabia applies a GCC common customs tariff of around 5% on products imported from countries outside the Gulf Cooperation Council (GCC). However, with a decision made in 2020, customs duties on products exported to Saudi Arabia have increased. There are customs duties that can reach up to 25% across all products. For some products that have increased in price, customs duties now start between 10% and 15% for food products, between 6.50% and 15% for petroleum materials and plastic products, 15% for animal hides, and between 8% and 10% for paper and forest products, and between 13% and 15% for textile materials. The standard customs duty rate is 20%. A customs tax exemption is applied to products up to 150 Euros.

The standard VAT rate is 15%. Exceptions to this rate include a special consumption tax of 100% on tobacco and tobacco products, 50% on carbonated drinks, 100% on energy drinks, 50% on sweetened beverages, and 100% on electronic cigarettes and cartridges.

What Products Are Exported to Saudi Arabia?

We export a significant amount of food and textile products to Saudi Arabia, which maintains strong trade relations with Turkey. Turkish companies also take into account Saudi Arabia's strong economy while evaluating investment and branch opportunities and are increasing the number of products and sectors they export. The growing e-commerce and e-export during the pandemic have led to significant changes for the Kingdom of Saudi Arabia as well. The export figures for the products taken from 2020 data are as follows:
● Petroleum oils and oils obtained from bituminous minerals = 23,999
● Electric transformers, static converters (for example; rectifiers) and inductors = 45,138
● Pipe fittings made of iron or steel (such as couplings, elbows, and sleeves) = 5,760
● Devices for processing substances by heat exchange, electrical non-heating devices or stored water heaters = 10,226
● Olive oil and fractions (chemically unmodified) = 20,772
● Construction and building components made of aluminum (bridges, bridge components, towers, pylons, legs, columns, doors, windows, etc.) = 13,485
● Other nuts (fresh/dried) (peeled/unshelled) = 34,675
● Ship cranes, other cranes, mobile lifting frames, rubber-tired carriers, and crane trucks = 1,902
● Construction and building components made of iron or steel, sheets, bars, etc. prepared for use in construction = 23,247
● Grapes (fresh/dried) = 10,130
● Electrical control, distribution panels, boards, consoles, cabinets, other bases, and numerical control devices = 15,102
● Other furniture and their parts and components = 135,736
● Profiles made of iron or non-alloy steel = 35,170
● Suits, sets, jackets, blazers, dresses, skirts, pants, etc. for women and girls (excluding swimwear) = 41,572
● Other clays, andalusite, cyanite and sillimanite, mullite, chamotte and dinas earth = 503
(2020 data is based on Trademap/Türkiye-directdata, values are in x1000USD.)

What Is the Trade Volume Between Saudi Arabia and Turkey?

According to the year 2021, the two countries recorded significant growth in their trade relations, with the trade volume increasing by 74.4% in the first half of 2022 compared to the previous year. Saudi Arabia's imports from Turkey increased by 47.3% from 2021, reaching 14.4 million this year. Numerous agreements have been signed between the two countries, indicating that these developments are expected to continue. During this period of political tensions subsiding, it is seen that the trade volume has been recorded at 5 billion and is continually increasing.