Exporting to Saudi Arabia is proving to be an attractive opportunity for Italian companies looking to expand internationally. Exports to the country are also favored by the relationship between Italy and Saudi Arabia, which are in fact expanding and consolidating on several fronts.
Italy aims to establish a strategic partnership with the nation as with the United Arab Emirates, extending cooperation to areas such as renewable energy, digital and space, and taking advantage of investment opportunities offered by the Saudi Vision 2030. This ambitious reform program aims to transform the Saudi economy by reducing dependence on hydrocarbons and promoting a service and knowledge-based economy. Special attention is given to tourism and the role of start-ups and SMEs in high value-added sectors.
Thus, Vision 2030 is fostering an economic transformation that offers numerous advantages, including the development of local production chains, major infrastructure projects, and a young and growing population. In addition, the favorable business environment and tax advantages make Saudi Arabia an attractive destination for Italian companies seeking new international partnerships.
In 2023, Italian exports to Saudi Arabia are. increased by 19%, reaching 4.9 billion euros, while Saudi imports decreased by 20% to 5.9 billion euros due to lower oil prices.
This positive trend underscores the strategic importance of the Saudi market for Italian products, which are gaining market share over other European suppliers.
Among them, Italy ranks second, behind Germany but ahead of the United Kingdom, France and Spain.
Saudi Arabia is a member of the G20, which testifies to its global economic importance. Its strategic geographic location, situated between Europe, Asia and Africa, undoubtedly provides privileged access to these markets.
Le Italian exports to Saudi Arabia are remarkably diversified, covering a wide range of sectors including chemical-pharmaceuticals, furniture, fashion and agribusiness. The technology transfer is particularly popular, with machinery, transportation vehicles, electrical and medical equipment accounting for nearly 50% of total exports.
Increased infrastructure and urban investment, in line with the Vision 2030 mega-projects, and steady population growth (2% annually, exceeding 36 million), suggest future export growth in the construction and design sectors. Other promising sectors include healthcare, with growing demand for pharmaceuticals and medical equipment, and fashion, where the Made in Italy continues to be a focus for Saudi consumers, especially among young people.
The business environment in Saudi Arabia is constantly evolving, with reforms facilitating business activities and attracting foreign investment. The country offers significant tax advantages, including no personal income tax, a 20% rate on business income and a 15% VAT. Numerous agreements to avoid double taxation, including those with Italy, are in place. In addition, the country provides incentives for the import of materials and equipment needed for new productive investments, facilitates the obtaining of visas, and supports joint ventures and business location.
To export to Saudi Arabia, it is essential to obtain certifications that meet specific requirements.
As of 2019, the country replaced the Certificate of Conformity with the SABER Certificate of Conformity Assessment. Under the SALEEM program for product safety, the Saudi Standards, Metrology and Quality Organization (SASO) introduced the electronic platform SABER. This initiative aims to simplify import procedures, reduce the entry of counterfeit products and ensure compliance with technical regulations and to Saudi standards.
As a result, importers are required to use SABER's electronic platform to register products and obtain respective certificates of conformity.
The process involves the issuance of two main certificates:
Let's look at them in detail.
The Certificate of Product Conformity (PCoC) is issued for each regulated product in accordance with the standards specified in the technical regulations relevant and is valid for one year. The main steps to obtain the PCoC are as follows:
For each regulated product included in the shipment, the validity of the Product Certificate of Conformity (PCoC) is checked. If confirmed, the Certificate of Shipping Compliance (SCoC), valid only for that specific submission.
The main steps in obtaining it are:
The technical regulations cover several product categories, including lubricating oils, detergents, building materials, paints, elevators, vehicle components and textile products.
It is not necessary to use the SABER platform to export goods such as cosmetics, perfumes, cigarettes, cigars, other tobacco products, and pesticides. For these goods that are not subject to technical regulations, you can apply for self-certification and a Certificate of Shipping Compliance, again through SABER.
As of January 1, 2020, all goods for export to Saudi Arabia must have a barcode on the packaging, which can be applied directly to the outer package or by stickers.
The bar code must consist of 13 digits and must be easily scannable. The rules for its creation are set by the manufacturer and may vary by product type or product series.
With the right strategy, Italian companies can take full advantage of the potential of the Saudi market, which offers a wide range of business and investment opportunities. Strengthening bilateral relations between the two countries can promote significant growth for Italian companies in a highly dynamic environment.
Octagona, with more than two decades of experience in the strategies of internationalization of enterprises, can provide the necessary support to companies wishing to export to Saudi Arabia and explore new opportunities.
Contact us for more information.
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