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.
In 2023, Italian exports to Saudi Arabia increased by 19%, reaching 4.9 billion euros. Machinery, transport vehicles, electrical and medical equipment account for almost 50% of exports. Following are chemical-pharmaceutical products, furniture, fashion, and agro-food products. Italy is second among European suppliers, behind Germany and ahead of the United Kingdom, France, and Spain.
The Saudi Vision 2030 is a reform program aimed at reducing Saudi Arabia’s dependence on hydrocarbons and promoting an economy based on services and knowledge. For Italian companies, it means large infrastructure projects, the development of local production chains, attention to tourism, and space for start-ups and SMEs in sectors with high added value, also through joint ventures.
Saudi Arabia does not apply taxes on personal income; it imposes a 20% rate on corporate income and a 15% VAT. Agreements against double taxation are in effect, including with Italy. The country also offers incentives for importing materials and equipment for new productive investments, facilitates visas, and supports joint ventures and the localization of activities.
SABER is the electronic platform of SASO, introduced in the SALEEM program, which since 2019 replaces the old Certificate of Conformity. The importer requests the PCoC, valid for one year, by choosing an SASO-accredited certification body and paying the fee. Then, for each shipment, the SCoC is required, issued after verifying the validity of the PCoC.
Cosmetics, perfumes, cigarettes, cigars, other tobacco products and pesticides do not fall under the technical regulations and do not require the PCoC through SABER. For these goods, self-certification and a Certificate of Conformity of the Shipment can be requested, again through SABER. The technical regulations, however, concern lubricating oils, detergents, building materials, paints, elevators, vehicle components and textile products.
From January 1st 2020, all goods destined for Saudi Arabia must have a barcode on the packaging. The code must consist of 13 digits and be easily scannable. It can be printed on the outer packaging or applied with stickers. The creation rules are set by the manufacturer and may vary depending on the type of product or series.
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