Saudi ArabiaSaudi Arabia

Saudi Republic Inc.Saudi Republic Inc.

Saudi ArabiaSaudi Arabia

Saudi ArabiaSaudi Arabia

• Continent: Asia

• 4/5 Arabian peninsula

• Bordered by Yemen and Oman.

• Approximately 1/5th of the United States

DemographicsDemographics

Saudi Arabia United States

Population 27,019,731 298,444,215

Men/Women 54.6%/45.4% 49.1%/50.9%

0-14 yrs 38.2% 20.4%

15-64 yrs 59.4% 67.2%

65+ yrs 2.4% 12.5%

Median age (total)

21.4 36.5

Demographics (Cont’d)Demographics (Cont’d)

Saudi Arabia

United States

Median age (male)

22.9 35.1

Median age (female)

19.4 37.8

Pop. Growth rate 2.18% 0.91%

Birth rate 29.34/1,000 14.14/1,000

Death rate 2.58/1,000 8.26/1,000

Net migration rate

-4.94/1,000 3.18/1,000

ReligionReligion

• Birthplace of Islam

• Followers are Muslims

• Monotheistic

• No trinity: “Say: He is Allah, the One;Allh, the Eternal, Absolute. He begets not, nor is He begotten, and there is none like unto Him” (Qur’an 112:1-4)

Articles of FaithArticles of Faith

1. Faith in Unity of God

2. Faith in Allah’s Angels

3. Faith in Allah’s Prophets

4. Faith in Allah’s Revealed Books

5. Faith in Life after Death

6. Belief in Divine Decree

Five PillarsFive Pillars

1. Declaration of Faith – Simply declaring that there is no God but Allah.

2. Prayer – Formal prayer is done five times a day (before dawn, noon, afternoon, after sunset, and evening).

3. Fasting – During the month of Ramadan, Muslims do not eat or drink during daylight hours.

Five Pillars (Cont’d)Five Pillars (Cont’d)

4. Almsgiving – All wealth is considered a gift from Allah that must be shared with the needy. Once a Muslim reaches a certain amount of wealth, 2.5% of savings must be given to the needy.

5. Pilgrimage – Once in a Muslim’s lifetime (if financially and physically possible) a pilgrimage to Mecca must be made during the month of Hajj.

GovernmentGovernment

• Monarchy

• Rules by Islamic Law

• No political parties

• Currency is the Saudi Riyal (SAR)

• $1 = 3.75080 Saudi Riyal

IndustriesIndustries

• Oil-based economy• 1/4th of the world’s proven petroleum reserves• 45% GDP• Mostly in Northern section of Saudi Arabia• To increase available jobs, government is

looking into private sector• Agriculture – 3.3% of GDP• Agriculture located in Southwest section

bordering Yemen

Capital CityCapital City

• Riyadh

• Located in East-Central region

• Modern compared to rest of country

• All government has relocated to Riyadh

• Population 4.7 million

Saudi Arabian FlagSaudi Arabian Flag

• Green is traditional color in Islamic flags

• “There is no god but God: Muhammad is the Messenger of God.”

• Saber points to side to be hoisted.

[1]

Conducting BusinessConducting Business

• Business meetings

• Trust

• Business cards

• Working Days– The week begins on Saturday and ends on

Wednesday.– Thursday and Friday are the official days of

rest

Business cont..Business cont..• The customary greeting is “As-salam

alaikum” which means (peace be upon you) and the reply is “Wa alaikum as-salam” which means (and upon you be peace).

• Meetings are long in duration• Discussions are at a leisure pace over tea

and coffee

What to expect in meetings!!What to expect in meetings!!

• Meetings may be interrupt by…– A number of phone calls, fixed and mobile– Assistant seeking a signature or advise– If interrupt by someone, do not get involved in

the conversation, unless invited– Be patient– Develop a calm but firm negotiating style– Expect a closer distance during conversation

TimeTime

• Saudi Arabia is a poly-chronic culture

• Poly-chronic Cultures: tolerate many things occurring simultaneously and emphasize involvement with people

• Building relationship is very important

Time cont…Time cont…

• Time to Saudis is not an issue

• Business appointments are necessary

• Appointments are schedule accordance to the five daily prayer times

Do’sDo’s

• Use appropriate titles

• Abide by local standards

• Dress appropriately

• Maintain a strong eye-contact

Don’tsDon’ts

• Do not appear loud or overly animated in public

• Don’t rush Arabian counterparts during business negotiations

• Don’t assume a person who asks the most questions holds the most responsibility.

Dress Style for MenDress Style for Men

• The Thobe, a loose, long-sleeved, ankle-length garment

• The Tagiyah is a white knitted skull cap

• The Ghutra is a square scarf, made of cotton or silk, which is worn folded across the head over the Tagiyah

• The Agal is a thick, doubled, back cord which is worn on top of the Ghutra to hold it in place.

Dress Style for WomenDress Style for Women

• The Thobe- a loose, long-sleeved, ankle-length garment, but, for women, the neck and front can be embroidered and decorated with beads

• The Abaya is a large, black cloak, worn either loose and flowing or wrapped around the body;

• The Boshiya is a black veil, light in weight, worn across the lower part of the face

• The Surwal are cotton or silk trousers worn by women under the Thobe

Legal System – National Legal System – National

• Monarchy – Kingdom of Saudi Arabia

• Constitution – Holy Quran

• Muslim Law – Shari’a

Saudi Arabia - LawSaudi Arabia - Law

• Islamic State

• Holy Quran – Basis for all law and governs both criminal and civil cases.

• Executive & Legislative authorities – Exercised by the King and the Council of Ministers.

• Courts/Judiciary system- Rulings and judgments based on what is in the Quran.

Political RiskPolitical Risk

• Political Atmosphere – Very Risky

• Many Attacks on Westerners and foreign official.

• Types of Attacks – Kidnappings, Suicide bombers, shootings

• Religious police patrols rigorously and enforces codes of behavior.

Political risk continued…Political risk continued…

• Visitors should keep low profile when visiting Saudi Arabia.

• Stay alert in public places frequented by foreigners.

• Respect the customs of Saudi Arabia.

CorruptionCorruption

• Corruption – not a large problem when paralleled with other foreign countries.

• Laws have been established aimed a curbing corruption. Ex. Agency Law, rules on engaging in business activities if a government official.

• Some foreign firms still have identified corruption as an obstacle to investment in Saudi Arabia.

Corruption continued..Corruption continued..

• Tenders Law of Saudi Arabia – Is expected to significantly improve transparency within the government.

• Laws enacted to require publication of details for government contracts.

Property RightsProperty Rights

• Intellectual property violations are a problem in Saudi Arabia.

• Accession to the WTO has helped curb many of the problems once reported by businesses.

• Developments to intellectual property violations have been updates to Trademark, Copyright and Patent Laws.

International RelationsInternational Relations

• May of 1981 – Gulf Cooperation Council signed. Joined six states to effect coordination, integration and connection between states.

• Bi-lateral agreements with France, Germany, Italy, Belgium and Netherlands.

• May of 2003 Middle East Free Trade Initiative – George Bush proposed a plan of graduated steps for Middle Eastern nations to increase trade and investment.

International Relations continued…International Relations continued…

• Objectives of proposed MEFTI plan would be reforms in rules of law, property rights and protection and creating a foundation of openness and economic growth.

• December 2005, Saudi Arabia becomes 149th member of the World Trade Organization.

International Relations continued…International Relations continued…

• Accession to the WTO increased trade and foreign investment significantly.

• Lightened trade restrictions by Saudi Arabia. (Reduced tariffs and trade restrictions)

• Diversified economy – Telecommunications, banking, financial services and energy.

Economic SystemEconomic System

• Centrally Planned

• Saudi Arabian Monetary Agency controls the financial markets and the stock market

Fiscal and Monetary PolicyFiscal and Monetary Policy

• SAMA was founded in 1952 is the Kingdom’s central bank

• Acts as the central government bank

• Issues Currency

• Supports the value of the Saudi Riyal

• Encourages the development of the Kingdom’s banking system

GDP and GDP per CapitaGDP and GDP per Capita

• The GDP of Saudi Arabia has experienced steady fluctuation each of the years between 1996 and 2001.

• The main decrease came in 1998 when the national GDP dropped by 11.5 % and then increased for the next two years and then began to decrease again in 2001.

• This is shown in the graph on the next slide.

General Economic Indicators for the Kingdom of Saudi Arabia (percentages)

Year 1996 1997 1998 1999 2000 2001

GDP Growth at constant prices 590,748 617,902 546,648 603,589 706,657 698,403

Percentage Change (%) - 4.6 -11.5 10.4 17.1 -1.2

Financial MarketsFinancial Markets

• Consists of three main banks, the Saudi Arabian Agriculture Bank, the Saudi Credit Bank, and the Central Bank

Saudi Agricultural BankSaudi Agricultural Bank

• The Saudi Arabian Agricultural Bank was founded in 1964/65

• This bank lends specifically to employees in the agricultural sector. Besides the loans offered by the bank, the workers are also eligible to get aid to help with the purchase of machinery and agricultural equipment.

The Saudi Credit BankThe Saudi Credit Bank

• The Saudi Credit Bank was established in 1971.

• This bank offers loans for other purposes besides agricultural, including marriage, repairs, and medical needs.

• In 2000/2001 the bank gave out loans which equated in almost 320 million Saudi Riyals.

The Saudi Central BankThe Saudi Central Bank

• The Saudi Central Bank is another name for Saudi Arabia Monetary Agency

Stock MarketStock Market

• The number of companies who actively participate in the Saudi Arabian Stock Market has steadily increased over the years which has been a strong factor in helping the stock market to grow.

• There are about 70 firms currently listed on the Saudi Stock Market

• Largest in the Arab world, with a capitalization of $58 billion

Exchange Rates and Recent Exchange Rates and Recent TrendsTrends

• The exchange rates for any currency will either increase or decrease on a daily basis. As of late the rate for the Saudi Arabian Riyal has been decreasing at a steady rate as compared to the United States dollar and the Euro.

External DebtExternal Debt

• “The deficit in the current account is estimated to drop by 70.3 percent in 1999amounting to SR 14.6 billion compared to SR 49.2 billion in 1998 as a result of the increase in oil prices, government policies to rationalize spending, and the decline in private transfers. Non-oil exports are estimated to grow by 1.6 percent in 1999 totaling SR 23.8 billion due mainly to improvement in petrochemical prices. Imports are estimated to drop by 0.2 percent amounting to SR 102.8 billion.”

• www.the-saudi.net/business-center/budget2000.htm

Trade and Investment AnalysisTrade and Investment Analysis

Role of TradeRole of Trade

• Trade in the economy is essential for the country as a whole to be successful. Without trade, Saudi Arabia would be unable to sustain any significant growth in the economy and would not be able to be able to have enough jobs to support the people who live there.

Importance of TradeImportance of Trade

• Trade is an essential part of the economy for Saudi Arabia. The exports of crude oil make up the majority of the profits brought into the country. Beyond these exports the country has to find additional methods to have any kind of capital coming into the country.

ExportsExports

• , the amount of materials that Saudi Arabia had exported between 1992 and 1996 steadily increased with the main exported good being the mineral products which includes crude oil. The total amount of exports in the form of mineral products for 1996 was 203,247 Saudi Riyal’s.

• The following graphs show exports for Saudi Arabia

Saudi Arabian Exports1992-1996SR Millions, SR3.75 = $1

Description 1992 1993 1994 1995 1996

Mineral Products 174,243 144,636 142,829 163,083 203,247

Foodstuffs 1,578 1,656 1,430 1,589 1,339

Chemical Products 5,742 5,819 7,878 10,166 10,435

Plastic Products 2,736 2,537 3,370 5,455 4,289

Base Metals and Articles of Base Metals

897 869 943 2,631 2,396

Electrical Machines 493 460 546 851 1,065

Other Exports 1,091 1,266 1,282 1,866 2,336

Re-exports 1,545 1,527 1,312 1,762 2,321

TOTAL 188,325 158,770 159,590 187,403 227,428

    Source:  Saudi Arabian Central Department of Statistics [1]

[1] www.the-saudi.net/business-center/budget2000.htm

Exports by Country Groups1991-1997 SR Millions

Country Group 1991 1992 1993 1994 1995 1996199

7

Gulf Cooperation Council 12,02011,36

310,36

710,744 13,448 16,283

17,089

Other Arab League 5,197 3,539 3,647 3,408 4,802 6,106 7,414

Islamic, not Arab 10,11712,02

710,04

39,786 10,570 11,809 9,176

Asian, not Islamic, not Arab 60,24667,86

260,15

759,942 78,376 96,156

103,376

African, not Arab or Islamic 1,816 2,076 1,434 1,523 1,785 2,750 3,277

Australia and Oceania 2,282 2,027 1,890 1,717 2,619 3,483 2,910

North America 42,40841,74

229,03

530,874 33,092 41,607

36,174

South America 4,981 5,394 4,977 4,986 4,232 5,844 4,213

Western Europe 38,04541,49

236,52

536,457 38,209 43,236

43,651

Eastern Europe 1,249 564 14 7 22 50 31

Others 263 239 682 145 248 104 131Source: Saudi Arabian Central Department of Statistics[1]

[1] www.the-saudi.net/business-center/budget2000.htm

Top 10 Leading Buyers of Saudi Products1996SR Millions

Country Exports

U.S. 39,891

Japan 34,221

South Korea 23,931

Singapore 13,656

Holland 9,725

France 9,033

India 7,804

U.A.E. 6,779

Italy 6,640

Bahrain 6,581

Source: Saudi Arabian Central Department of Statistics[1]

[1] www.the-saudi.net/business-center/budget2000.htm

Saudi Arabian ImportsSaudi Arabian Imports

• The main imports into Saudi Arabia come in the form of food stuffs, clothing and textiles. Between 1992 and 1997 the amount of food stuffs imported into the country steadily rose to where in 1997 the amount of imports into Saudi Arabia was in millions of Saudi Riyals 18,748.

• The following graphs show statistics about the imports into Saudi Arabia

Top Trading Countries By Value of Imports1997(SR Millions)

Rank

Country 1997Percen

t of Total

1 U.S.23,93

322.23

2 England11,2

8110.48

3 Japan 7,123 6.61

4Switzerland

6,221

5.77

5 Germany5,82

95.41

6 Italy 4,963 4.61

7 France 4,838 4.49

8 China 3,370 3.13

9South Korea

2,619 2.43

10

India 2,584 2.40

11

Brazil2,13

21.98

12

Holland 2,066 1.91

13

Australia 1,752 1.62

14

Canada 1,636 1.51

15

Belgium 1,635 1.51

Other Countries

25,661

Total107,6

43

Source: Central Department of Statistics[1]

Saudi Arabia Top Commodity Imports1992-1997(SR Millions)

Commodity 1992 1993 1994 1995 1996 1997

Foodstuffs13,22

711,44

911,31

717,17

117,59

618,7

48

Textiles & Clothes 9,842 8,272 6,410 7,913 7,5897,09

3

Medicines 3,146 2,710 1,963 2,813 2,8713,23

9

Chemical Products 9,223 8,884 7,735 9,552 9,2888,92

7

Wood & Wood Products 2,040 2,007 1,616 1,592 1,4631,33

2

Jewelry 5,911 3,251 2,954 4,237 4,3998,32

7

Base Metals and Metal Articles

11,182

10,650

8,10810,85

710,39

69,71

9

Electrical Machines, Equipment & Tools

26,322

22,469

18,145

23,020

21,848

21,267

Cars & Spareparts11,65

58,633 8,606 6,249 5,336

5,554

Other Transportation Means/Equipments

18,256

13,331

9,452 8,92310,56

711,1

83

Others 13,80

213,96

011,14

312,86

012,26

712,3

46

Total124,6

06105,6

1687,44

9105,1

87103,9

80107,643

Source:   Central Department of Statistics[1]

[1] www.the-saudi.net/business-center/budget2000.htm

Trading PartnersTrading Partners

• Saudi Arabia has several trading partners for both exporting and importing goods. The main buyers of Saudi Arabian products are the United States, Japan, South Korea, and Singapore. The top importers of products into Saudi Arabia include the United States, England, Japan, Switzerland, and Germany

Trade DependencyTrade Dependency

• Saudi Arabia is very dependent on trade for the support of their economy. The main export of Saudi Arabia would be oil. Saudi Arabia is the leading exported of crude oil in the world with many countries including the United Sates being dependent on this oil to maintain adequate fuel supplies. The main imports for Saudi Arabia come in the form of food subsidies and clothing and textiles. The main countries that Saudi Arabia imports from are the United States and England.

Government Intervention in TradeGovernment Intervention in Trade

• The Saudi Arabian government intervention in the trade sector is much less pronounced than in most other countries. “It is limited to restricting competition from abroad, granting loans on favourable terms, and, in a few cases such as hotel operations, requiring a licence to operate and providing interest-free loans to construct in most cases. Aside from these specific interventions, firms in this sector are obligated only to abide by the Kingdom’s laws and regulations, including those relating to imports, health standards, labour relations, etc.”[1]

[1] Johany, Ali D., Michael Berne & J. Wilson Mixon Jr., The Saudi Arabian Economy.

The Johns Hopkins University Press. Baltimore, MD, 1986, p. 147.

SubsidiesSubsidies

• A slightly more recent assessment puts the peak cost of subsidies at 12.1 billion in 1984, and then estimates that subsidies declined to 5.3 riyals in 2000.112 The Saudi government reports that cuts have taken place in social security, foodstuffs, and electricity, and that farm subsidies have been limited.” [1]

[1] Cordesman, Anthony S. Saudi Arabia Enters the Twenty-First Century The Political, Foreign Policy, Economics, and Energy Dimensions. Westport, Conn.: Praeger, 2003. p. 292.

Foreign Trade ZonesForeign Trade Zones

• “Saudi Arabia is a member of the Gulf Cooperation Council (GCC) which consists of Kuwait, Qatar, Bahrain, the UAE, Oman, and Saudi Arabia. Membership confers special trade and investment privileges within those countries. The GCC is not yet, however, a full-fledged customs union. Saudi Arabia is also a member of the Arab League. Recently, Arab League states have agreed to negotiate an Arab Free Trade Zone. Under the arrangement, countries should negotiate tariff reductions of 10 percent per annum. Provision may be made for more expeditious tariff reductions on a reciprocal basis between Arab States.”[1] [1] Cordesman, Anthony S. Saudi Arabia Enters the Twenty-First Century The Political, Foreign Policy, Economics, and Energy Dimensions. Westport, Conn.: Praeger, 2003. p. 341.

Trade RestrictionsTrade Restrictions

• there is no area of the country where a company can trade without having to pay taxes or some other fees which may be assessed

• The government is considering the use of free trade zones as an attempt to possibly increase trade within the country and also make the country more appealing to other companies who might want to do business within their country.

Tariffs/Quotas/EmbargosTariffs/Quotas/Embargos

• “Saudi tariff protection is generally moderate, but has increased over the years. A number of Saudi "infant industries" now enjoy 20 percent tariff protection as opposed to the general rate of 12 percent. Saudi non-tariff barriers also are increasing. Such barriers include preferences for national and GCC products in Government procurement; a 30 percent of contract value "set-aside" for local contractors on major Government projects; a requirement that foreign contractors obtain their imported goods and services exclusively through Saudi agents; reservation of some services for Government-owned companies, namely, insurance and air transport; and the economic offset requirement mandating reinvestment of a portion of contract value in indigenous industries for certain high value Government contracts, particularly in defense.”[1] [1]www.the-saudi.net/business-center/economy

Tariffs/Quotas/EmbargosTariffs/Quotas/Embargos

• “The importation of certain articles is either prohibited or requires special approval from competent authorities. In addition, import of the following products requires special approval by Saudi authorities: agricultural seeds; live animals and fresh and frozen meat; books, periodicals, movies, and tapes; religious books and tapes; chemicals and harmful materials; pharmaceutical products; wireless equipment; horses; products containing alcohol, e.g., perfume; natural asphalt; archaeological artifacts.”[1]

[1] www.the-saudi.net/business-center/economy

Foreign Direct InvestmentForeign Direct Investment

• “Saudi Arabia actively encourages foreign investment, especially if the projects have a lasting developmental effect on the country's economy and promote industrialization and technology transfer. Saudi law requires that any project involving foreign capital result in "economic development" and transfer needed technology. Moreover, foreign investors must find Saudi partners in order to benefit from Saudi investment incentives and practically speaking, to obtain authorization from the relevant Saudi authorities. The petroleum and mineral extraction industries are owned and controlled by the government, and are generally closed to foreign investment.”[1]

[1] www.saudinf.com

Financial IncentivesFinancial Incentives

• The Saudi Arabian government currently has some financial incentives in place to encourage people to invest in local industries and businesses.

• For government-approved projects with at least 25 percent Saudi participation, foreign investors in agricultural and industrial ventures are eligible for a 10-year exemption from income tax.

Infrastructure ImprovementsInfrastructure Improvements

• New International airports in the business centers of Riyadh, Jeddah, and Dammam/Al-Khobar/Dhahran

• Asphalt roads and highways which extend about 152,000 kilometers

• Improved seaports which are specialized for certain exports and imports

• Agreements to introduce Internet providers into Saudi Arabia

Market AnalysisMarket Analysis

• The Saudi Arabian market has seen enough growth over the past ten years to make it one of the largest markets in the Arab world.

• This growth has come as result of an increase in participation from companies in the stock market, along with some relative stability with the export/import market which fuels the economy.

Product BansProduct Bans

• “Importation of the following products are also prohibited by law: weapons, alcohol, narcotics, pork, pornographic materials, distillery equipment, and certain sculptures. Special approval is required for the import of seeds, food, livestock, books, periodicals, religious books, movies, chemicals, pharmaceuticals, wireless equipment, horses, perfumes, natural asphalt, and archaeological pieces. There are health and sanitation regulations on all imported foods. The Ministry of Commerce has issued a number of directives aimed at preventing outdated goods from entering the Kingdom and requiring Arabic and point of origin labeling.”[1] [1] www.the-saudi.net/business-center/economy.htm

Access to Access to Materials/Labor/FinancingMaterials/Labor/Financing

• “Geological surveys and mineral exploration have revealed that, in addition to vast oil reserves, the Kingdom of Saudi Arabia possesses large deposits of various minerals, including bauxite, copper, gold, iron, lead, silver, tin and a number of non-metallic minerals.”[1] [1] www.saudinf.com

Access to Access to Materials/Labor/FinancingMaterials/Labor/Financing

• “Saudi Arabia has just begun to feel the pressures of unemployment among Saudi males in recent years.  There is no available unemployment rate figure for Saudi Arabia, but published data suggest that employed Saudi males as a percent of the total maleworking age population are about 60 percent; the Embassy estimates that about 5 percent of Saudi women of working age are formally employed.  According to a report published by the Jeddah Chamber of Commerce, there are 240,000 working women Kingdomwide.”[1]  [1] www.saudinf.com

Quality of Quality of Workforce/Inputs/InfrastructureWorkforce/Inputs/Infrastructure

• While the general infrastructures of the country are steadily improving and they are constantly getting additional inputs from the items which are being imported into the country, the quality of workforce has been declining. Due to the increase in the amount of unemployment in the country over the past few years, many of the companies have to look for additional labor in the form of foreigners. This is making it difficult for the companies to produce quality products for sale or trade.

Mode of Entry into Saudi ArabiaMode of Entry into Saudi Arabia

• While the general infrastructures of the country are steadily improving and they are constantly getting additional inputs from the items which are being imported into the country, the quality of workforce has been declining. Due to the increase in the amount of unemployment in the country over the past few years, many of the companies have to look for additional labor in the form of foreigners. This is making it difficult for the companies to produce quality products for sale or trade.

Starting Business in Saudi ArabiaStarting Business in Saudi Arabia

• We will be starting a joint venture with one of the local businesses, Arabian Dress

• They have been operating there for several years and are accustomed to the many rules and regulations of Saudi Arabia

Rules and RegulationsRules and Regulations

• In order to enter into the country as a business each employee must be sponsored by a current business

• All companies, with which employ non-Saudi employees, must train Saudi workers to take the place of the non-Saudi employees in a time period specified by the Minister of Labor.

SalarySalary

• Workers must me paid in Saudi currency and payment must follow the following provisions per Article 116:

• Wages of daily-rated workmen shall be paid at least once a week.

• Wages of monthly-rated workmen shall be paid once a month.

• If the work is performed by piece and it needs a period exceeding two weeks, a payment proportionate to the work completed by the workman must be made to him every week, and the full balance of his wages shall be paid within the week immediately following the delivery of the work.

• In cases other than those mentioned above, wages shall be paid to workmen at least once a week.

Additions to WagesAdditions to Wages

•   There are also some additions to wages that employers are to consider. They are covered under Article 124 as follows:

• The commission given to peddlers, traveling salesmen, and commercial representatives.

• Percentages paid to employees of commercial establishments on the price of their sales, as well as the allowances paid to them on account of the high cost of living.

• Any grant made to the workman in addition to the salary, as well as any amount paid to him as a reward for his honesty, or for his increased family obligations and the like, if such amounts are stipulated in the labor contracts or in the basic works rules, or if such amounts are paid as a matter of generally accepted practice so that workmen have come to regard them as part of the wage, and not as a gratuity.

Deductions from SalaryDeductions from Salary• There are only a few specific deductions that are allowable from a workers wages.

They are covered by article 119 and are as follows:• To recover the advances or any amounts paid to him in excess of his rights, provided

no deduction shall, in this case, be made from the workman's wages in excess of 10% of such wages.

• Social insurance premiums due from the workman. • The workman's contributions to the Savings Fund and the advances due to this Fund. • Installments pertaining to any plan for the construction of houses for the purpose of

transferring ownership thereof to the workmen, or to any other benefits or services, if any, as decided by the Minister of Labor.

• Fines that are inflicted on the workman for offenses committed by him under the provision of Article 126, as well as any amount that is withheld from his pay in accordance with Article 81, for any damage he has caused.

• Any debt to be recovered in execution of a judiciary judgment, provided that the amount deducted in this respect shall not exceed one-fourth of the wages due to the workman and provided that an alimony debt and a debt for food, clothing, and lodging shall be satisfied in this order and before all other debts

Working HoursWorking Hours

• A workman shall not be employed for more than eight actual working hours in any one day, or forty-eight hours a week, in all months of the year, with the exception of the month of Ramadan when actual working hours shall not exceed six hours a day or thirty-six hours a week, exclusive of the intervals reserved for prayer, rest and meals.

Working HoursWorking Hours

• Working hours shall be scheduled that no workman shall work more than five consecutive hours without an interval of rest, prayer and meals which shall not be less than half an hour each time, or one and a half hours during the total working hours, and that the workman shall not remain in the place of work more than eleven hours in any one day.

Working HoursWorking Hours

• Friday, which the day observed as an official holiday, shall be a day of rest with full pay. The employer may, however, with the approval of the appropriate Labor Office, replace this day for some of his workmen by any other day of the week, provided that the number of working days per week shall not exceed six, and that the workmen shall in all cases be enabled to perform their religious duties.

Labor UnionsLabor Unions

• Labor unions do not exsit in Saudi Arbia, instead there in a Minister of Labor. The Minister of Labor is in charge the hiring of workers, of maintaning that all working enviroments are safe for workers, all companies follow the laws and keep track of who is working where.

CommunicationCommunication

• Arabic is the language to be used in all resolutions, records, registers, files, statements, and other documents provided for in this Law, or in any decision or order issued in application of the provisions hereof, as well as in any instructions or circulars issued by the employer to his workmen. In the event a foreign language is used by the employer along with the Arabic language, the Arabic text shall prevail at all times.

•  

BenefitsBenefits

• The workwoman shall be entitled to take as maternity leave the four weeks immediately preceding the expected date of delivery and six weeks following that date. The probable date of delivery shall be determined by the physician of the establishment or by a medical certificate approved by the Ministry of Health. No employer may employ any woman during the six weeks immediately following her delivery.

BenefitsBenefits

• During her absence on maternity leave, the workwoman shall been titled to half pay if she has been in the employer's service for one year or more, and to full pay if she has been in the employer's service for three years or more, as of the date of commencement of such leave.

• When the workwoman returns to work following her maternity leave, she shall be entitled to a period or periods of rest totaling not more than one hour daily for the purpose of feeding her newborn child, in addition to the rest periods granted to all workers.

•  The expenses of medical examination and the costs of treatment and delivery shall be borne by the employer.

BenefitsBenefits

• employers are required to provide first-aid services to it's employees and for those establishments with over 50 employees, they are required to have a nurse on site.

• employers with over 50 employees must, under Article 137, "set up for his workmen a savings and thrift plan to be approved by the Ministry of Labor, provided that the workman's participation in such a plan shall be voluntary

• Article 142, "every employer shall provide means of transportation to carry his workmen from their places of residence or from a given point of assembly to the places of work and to return them daily, if the places of work are reached by ordinary, regular means of transportation."