How to export to Saudi Arabia?

Relations between Italy and Saudi Arabia are strengthening at various levels: political, economic, commercial and cultural. Indeed, Italy looks to Saudi Arabia as an investment opportunity in the context of the Vision 2030, an ambitious plan for reforms and economy based on services, knowledge, tourism and start-ups. Among the Vision's projects are giga-ops such as the futuristic city of Neom, luxury resorts along the Red Sea coast, the Qiddiya theme park and tourism development of archaeological sites such as Al Ula and Diriyah.

Therefore, in this article we will analyze The latest trends in Made in Italy in Saudi Arabia., and then move on to study the most successful sectors in the market. Finally, we will review everything you need to export to Saudi Arabia, including new regulations and required documentation.

Why export to Saudi Arabia

In this section, we will explore why Italian companies should consider exporting to Saudi Arabia, taking advantage of the opportunities offered by Vision 2030 and the tax advantages in the country.

Saudi Vision 2030: a new development strategy

Vision 2030 was adopted by Saudi Arabia in 2016 and is aimed at To radically transform the country economically, socially and culturally. The goal is to create domestic production chains, promote private initiative and launch productions with high local content, involving the Saudi workforce. This transformation process will be supported by major projects led by the Saudi sovereign wealth fund, such as the futuristic NEOM smart city, the Qiddiya entertainment park, and the Red Sea Project resorts.

Strategic geographic location and infrastructure

Saudi Arabia is the main country in the Gulf and enjoys a strategic geographical position that the Quickly connects to Africa, Europe and Asia. The country has excellent infrastructure, including transportation, telecommunications and information technology, as well as a well-capitalized banking and financial system. With 28 airports accommodating more than 90 million passengers a year from over 45 countries, accessibility to the Saudi market is simple and easy.

Demographic divide and young market

With a population of 36.4 million inhabitants, two-thirds of whom are young people under 35 years old, Saudi Arabia offers a dynamic and growing market. This demographic dividend represents a great opportunity for companies wishing to enter sectors such as technology, fashion, and the cultural industry, which are particularly attractive to younger segments of the population.

Tax advantages

Saudi Arabia offers attractive tax advantages for business and investment. The country does not tax personal income and applies a tax rate of 20% on business income and 15% on VAT. Several agreements have been signed to avoid double taxation, including an agreement with Italy. In addition, there are no import duties for materials, equipment and technology needed to start new productive investments. There are also waivers of Saudisation regulations and facilitations for visas and residence permits for qualified personnel.

What to sell in Saudi Arabia?

Despite efforts at economic diversification, the oil industry still benefited from rising oil prices during the year.

Despite an overall negative balance in the trade balance, Italy ranks among the top 10 suppliers to Saudi Arabia, after Germany. Italian exports to Saudi Arabia in 2024 are atupped by 18.7% from 2023, reaching a total value of 8.2 billion euros.

But what are the main sectors in which to export Made in Italy to Saudi Arabia? Analyzing the data published by the Ministry of Foreign Affairs, we can make a real ranking of the most promising sectors for Italian exporting companies.

In detail, the general-purpose machinery sector ranks first, with 1,598 million euros in the first half of 2024, thus accounting for 32.8% of total Made in Italy exports. In second place are electrical appliances, which with 444 million euros accounted for 9.1%% of total Italian exports. The transport equipment sector closes the podium with 428 million euros in value (8.8%% of the total).

The fastest growing sectors

The fashion industry it also has room for improvement, as Italian signatures are a reference point for the Saudi market, especially among the younger segments of the population, which make up about two-thirds of the total.

In the export figure for the first two years of 2024 to Saudi Arabia, totaling 8.2 billion euros, our machinery and other electrical appliances, which together with the means of transportation, already constitute more than 50% of the basket, reflecting the high recognition our technology enjoys in this market, especially of an industrial nature. In fact, Saudi Arabia looks to our manufacturing industry as a role model in the framework of its National Industry Strategy.

In the wake of the ongoing strong development of the urban-real estate sector, it is also reasonable to expect an increase in sales of furniture and furnishings, in light of Italy's renowned tradition in interior design. Prestigious brands such as Poltrona Frau, Minotti, iGuzzini and Cavalli Casa are already present in this market. Looking forward, the growth of hospitality in connection with tourism may fuel further demand for our furniture and furnishings, taking into account, moreover, that the large hotel chains already present in Saudi Arabia clothe their interiors with Italian design.

Three effective ways to sell in Saudi Arabia

As seen, exporting to Saudi Arabia has enormous advantages for Italian companies interested in expanding their horizons and accelerating their growth process. But on the facts, how do you go about exporting to the Saudi market?

The options available to businesses are many, but according to Octagona only 3 can really make a difference, and we present them below:

• Online sales via marketplace or e-commerce: is definitely the cheapest option, as it avoids the physical component of doing business abroad, such as transfers or costs for a network of agents, participation in trade shows, or a direct physical presence with a subsidiary. This is a suitable solution for those who want to sound out the Saudi market. Without having to spend excessive resources and time, but with the great disadvantage of having to wait a long time to see results;
• Relying on a Temporary Export Manager: With a somewhat more challenging, but still limited budget, SMEs can achieve great results by relying on a Temporary Export Manager (TEM). These are professional figures or companies of international trade specialists who work directly on Saudi territory, and act as the company's interface in Saudi Arabia. In other words, the figure functions as a hybrid between a foreign salesperson and a commercial agent, who for a limited time (usually at least a year) works on the company's business development.This is an extremely flexible solution that is perfect for companies that want to start an internationalization process;
• Physical presence: this is the most economically demanding solution, but also the one that guarantees the greatest results. It is suitable for medium- or large-sized companies, or at any rate of companies that can dispose of a large amount of capital : the activity begins with frequent trips and trade missions to Saudi Arabia, and then culminates in a full-fledged corporate establishment abroad, with its own office and its own dedicated resources.

Conclusions

Saudi Arabia represents a market full of opportunities for Italian companies who wish to expand their international activities. Vision 2030 and the country's economic transformation offer a number of advantages, including local production chains, large development projects, and a young and growing population. In addition, the favorable business environment and tax advantages make Saudi Arabia an attractive option for Italian companies seeking new international partnerships.

Are you interested in exporting Made in Italy to Saudi Arabia? Then contact us and tell us about your project; we will study the best solution together with you.

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