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Market Focus: Saudi Arabia

Long-standing allies, strong-standing allies 

Strategic allies and trade partners, the Kingdom of Saudi Arabia and the United Kingdom have shared closed ties since the early 1800s. This long-standing relationship has turned Saudi into the UK’s primary trading partner in the Middle East, and the UK into Saudi’s closest European Ally.

Saudi Arabia is home of 36.4 million people in a territory that covers the greater part of the Arabian Peninsula, which is well communicated with over 221,372 kms of road, three main ports (Dammam, Jeddah and Yanbu) and 29 commercial airports.

Saudi Arabia

Saudi at glance

Currently the 17th largest economy in the world, Saudi has shown a strong determination to continue climbing the economic ladder, evidence of this was their 2022 GDP growth of 8.74% which represents a nominal GDP of $1.108 trillion. The country possesses about 17% of the world’s proven petroleum reserves and ranks as the largest exporter of petroleum in the world, but although 45% of their GDP and 90% of their export earnings come from the petroleum sector, the Kingdom is pushing to expand over and strengthen their non-oil sectors.

In 2022, Saudi Arabia’s top five imported products were:

  • Cars ($13.2B)
  • Broadcasting equipment ($5.43B)
  • Gold ($5.22B)
  • Refined petroleum ($4.87B)
  • Packaged medicaments ($3.08B). 

The top five importing partners were from China ($36.5B), United Arab Emirates ($27.8B), United States ($11B), India ($10.1B), and Germany ($7.1B).

Large opportunities for the UK

A country with a growing reputation and a significant purchasing power, Saudi is a shining desert jewel indeed, a promising land with plenty of trading opportunities to explore and leverage. 

For almost 30 years, Saudi has shown a steady increase of 1.89% annual imports from the UK. As of April 2024, Saudi was the UK’s 18th largest UK export market and was the recipient of £12.7 billion total UK exports (Q3 2023), which represents just 1.4% of the UK’s total trade.

The UK’s top 5 exports in goods to KSA are:

Top 5 Export goods

The above graphic is taken from Department for Business and Trade.

UK companies looking to export goods to Saudi Arabia should be aware of the customs and country regulations they will need to comply with, such as labelling, translations, phytosanitary and health certificates, goods banned, and trade documentation, amongst many others.

As part of the Arab League Convention, Saudi importers often require Arab Certificates of Origin issued for goods imported from the UK, rather than the regular UK Certificate of Origin, and whilst the Arab Certificate serves the same purpose and has the same basis as the UK Certificate, there are extra layers of information and documentation that need to be complied with to obtain one. Learn more about this subject in our Arab Certificates Learning Module.

Trade in Services 

In the words of Lord Dominic Johnson, Minister for Investment at DBT, “Saudi Arabia is a technologically advanced nation, and its scientific and technological research and development capabilities are well-known and respected.” 
This aligns with the UK’s goal to continue leading in the technology and innovation sectors.

The UK’s top 5 exports in services to KSA are:

Top 5 services

The above graphic is taken from Department for Business and Trade

Saudi Arabia, a gateway to another world

UKNATACO announced earlier this year, that from 1 June 2024, The Federation of Saudi Chambers will become the 80th guaranteeing organisation member of the ATA International Convention, joining lines with the lates addition of Peru in April. ATA Carnets, also known as Passport for Goods, are customs documents that facilitate the temporary importation of goods for commercial purposes, and whilst the document usually covers exhibitions, commercial samples and/or professional equipment, Saudi has opted to accept ATA Carnets for goods to be displayed or use ad exhibitions, fairs and meetings.

This news come well in hand and preparation for the World Expo that Saudi Arabia is scheduled to host in Riyadh in 2030. The exhibition, which takes place every 5 years, promises to showcase over a period of 5 months the greatest achievements of the nations in attendance to a worldwide audience. 

Traders looking to visit Saudi Arabia for business, must be aware it is necessary to obtain a visa prior to travelling to the country. The London Chamber can assist with the certification of business visa invitation letters for business travellers visiting Saudi.

Bespoke market research

The world of International Trade is very exciting, but it can be daunting as well, especially for companies with no previous experience trading overseas. Our recommendation and the best antidote for any challenges is to be prepared, be diligent and get the support from market experts that will help you clearly draft the road to success in your overseas ventures.

LCCI through its Business Information Services, available to Premier Plus Members, can help companies access specialised overseas market information. Reports include:

  • Overview of the country’s economy
  • In-demand products and services from the UK
  • Information on export and import procedures
  • What to expect when doing business in the country
  • UK and worldwide import and export data

As the largest issuer of Trade Documentation and certification services in the UK, LCCI is also ready to assist you with ATA Carnets, Arab Certificates of Origin, as well as the certification of Saudi business visa letters.

Sources

This country snapshot was prepared with information compiled from: Wikipedia, Croner-i, Worldometers OEC World (A and B), Department for Business and Trade, and Visit Saudi.

Produced by Elizabeth Skewes, Trade Services and Business Development Manager, LCCI.