Doing Business in Saudi Arabia - International Franchise Association

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Conditions in Saudi Arabia Saudi Arabia has some, albeit limited, laws aimed at curbing corruption. The Tenders Law of Saudi Arabia, approved in 2004, has improved transparency within government procurement through publication of such tenders. Further, ministers and other senior government officials appointed by royal decree are forbidden from engaging in business activities with their ministry or government organization while employed there. There are few cases of prominent citizens or government officials being tried on corruption charges. Despite the fact that corruption has been identified by foreign firms as an obstacle to investment in Saudi Arabia, authorities have taken some recent steps toward combating it. In April 2007, the King established the National Authority for Combating Corruption that is to report directly to him. This commission embodies the government’s determination to implement a national strategy aimed at eliminating corruption of government employees. To what extent the Commission will be empowered to eradicate corruption remains to be seen on the ground.” The General Auditing Bureau is also charged with combating corruption. Anti-Corruption Resources Some useful resources for individuals and companies regarding combating corruption in global markets include the following: • Information about the U.S. Foreign Corrupt Practices Act (FCPA), including a “Lay- Person’s Guide to the FCPA” is available at the U.S. Department of Justice’s Website at: http://www.justice.gov/criminal/fraud/fcpa. • Information about the OECD Antibribery Convention, including links to national implementing legislation and country monitoring reports, is available at: www.oecd.org/department/0,3355,en_2649_34859_1_1_1_1_1,00.html. See also new Antibribery Recommendations and Good Practices Guidance Annex for companies at http://www.oecd.org/dataoecd/11/40/44176910.pdf • General information about anticorruption initiatives, such as the OECD Convention and the FCPA, including translations of the statute into several languages, is available at the Department of Commerce Office of the Chief Counsel for International Commerce Website: http://www.ogc.doc.gov/trans_anti_bribery.html. • Transparency International (TI) publishes an annual Corruption Perceptions Index (CPI). The CPI measures the perceived level of public-sector corruption in 180 countries and territories around the world. Transparency International publishes the CPI at www.transparency.org/policy_research/surveys_indices/cpi/2009. TI also publishes an annual Global Corruption Report which provides a systematic evaluation of the state of corruption around the world. It includes an in-depth analysis of a focal theme, a series of country reports that document major corruption related events and developments from all continents and an overview of the latest research findings on anti-corruption diagnostics and tools. For more details, please see www.transparency.org/publications/gcr.
• The World Bank Institute publishes Worldwide Governance Indicators (WGI). These indicators assess six dimensions of governance in 212 countries, including Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. For more information, please see info.worldbank.org/governance/wgi/sc_country.asp. The World Bank Business Environment and Enterprise Performance Surveys BEEPS) may also be of interest, and are available at go.worldbank.org/RQQXYJ6210. • The World Economic Forum publishes the Global Enabling Trade Report, which presents the rankings of the Enabling Trade Index, and includes an assessment of the transparency of border administration (focused on bribe payments and corruption) and a separate segment on corruption and the regulatory environment. Visit www.weforum.org/en/initiatives/gcp/GlobalEnablingTradeReport/index.htm for additional information. • Additional country information related to corruption can be found in the U.S. State Department’s annual Human Rights Report at www.state.gov/g/drl/rls/hrrpt/. • Global Integrity, a nonprofit organization, publishes its annual Global Integrity Report, which provides indicators for 92 countries with respect to governance and anticorruption. The report highlights the strengths and weaknesses of national level anticorruption systems. The report is available at report.globalintegrity.org/. Bilateral Investment Agreements Return to top There is no bilateral investment treaty in force between the United States and Saudi Arabia, although both sides have exchanged draft texts for review. GCC countries and their nationals receive favorable investment treatment derived from GCC agreements. OPIC and Other Investment Insurance Programs Return to top The Overseas Private Investment Corporation (OPIC) no longer provides coverage in Saudi Arabia. In 1995, OPIC removed Saudi Arabia from its list of countries approved for OPIC coverage because of Saudi Arabia’s failure to take steps to comply with internationally recognized labor standards. Details on OPIC programs and coverage can be obtained at www.opic.gov. Saudi Arabia is a member of the Multilateral Investment Guarantee Agency. Labor Return to top The Ministry of Labor and the Ministry of Interior regulate recruitment of expatriate labor. In general, the government encourages recruitment of Muslim workers, either from Muslim countries or from countries with sizable Muslim populations. The largest groups of foreign workers now come from Bangladesh, Egypt, India, Pakistan, the Philippines, and Yemen. Westerners compose less than two percent of the labor force, although this percentage is increasing as they seek to take advantage of the relatively stable Saudi economy during a time of global economic uncertainty.
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Doing Business in Saudi Arabia: 201
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• Intellectual Property Protectio
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Return to table of contents Chapter
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Since this is a common practice in
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Franchising Return to top Franchisi
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companies interested in operating i
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Other entities created by the CML i
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Pricing Return to top The governmen
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Al-Jazira Al-Watan Newspaper Arab N
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Engineering & Architectural Service
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units and 150,000 square metres of
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and has earmarked $8 billion for ne
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knowledge-based industries in Madin
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Medical Equipment - MED Overview Re
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Ministry of Health www.moh.gov.sa M
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as Marafiq. This company is respons
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• Anti-scaling chemicals • Oper
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traffic flow. Non-food franchises a
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Saudi Arabia’s Homeland Security
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Saudi Arabia’s education system i
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Education Trade Fairs in Saudi Arab
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$90 billion expected to be spent on
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Gulf where a major port will be con
Page 47 and 48: total of $109 billion on railway ex
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Page 51 and 52: Al-Qurayyat PP Ext. # 2 - 110 MW -
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Page 57 and 58: seems that Saudi Aramco has started
Page 59 and 60: In 2000, Saudi Arabia passed the Fo
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Page 71 and 72: educe its soybean import subsidy fr
Page 73 and 74: Tel.: (+971-4) 332-1000 Fax: (+971-
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