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Posted: Sat, May 7 2016 | 09:53 am
Best known to Indonesia as the hajj destination, Saudi Arabia is now developing its status as an export target.
Ardhi Setyo Putranto, an entrepreneur from Yogyakarta, is seeking a new market for his organic banana chips. His eyes are set on Saudi Arabia, home to more than 30 million people.
The 24-year-old has already successfully promoted his Banana Queen chips in Malaysia, the Netherlands, Pakistan and the US.
At present, sales of Banana Queen stand at Rp 200 million per month ( US$14,980 ), spurring optimism for Ardhi that he can expand the business beyond its current markets.
“I am curious about expanding to Saudi Arabia. Up until now, I have only tried exporting my chips to one Middle Eastern country, Pakistan,” he said at the recent “Saudi Arabia buying mission”, held by the Trade Ministry.
The mission aims at facilitating business deals between foreign importers and local entrepreneurs. Importers looking to join in are required to submit an application to an Indonesian embassy, which then verifies their business and credibility.
As many as 34 Saudi Arabian businesses and 100 Indonesian companies participated in the latest buying mission, with coverage ranging from construction to food.
Arlina Imbang Jaya, an expert staff member at the Trade Ministry, said that Saudi Arabia was playing a more and more important role in Indonesia’s trade with the Middle East.
“Saudi Arabia is a very important trade partner for us and we are committed to maintaining bilateral relations with them,” she said.
Export value between Indonesia and Saudi Arabia rose by almost 50 percent over the past five years. Exports stood at $1.43 billion in 2011 and had climbed to $2.06 billion by the end of last year.
Arlina urged Indonesian entrepreneurs to increase the quality of their products as Saudi implemented strict criteria for imported products, including some put in place by the Saudi Standards, Quality and Metrology Organization ( SASO ).
Maher Saleh Jamal, chairman of the Makkah Chamber of Commerce delegation, said that it was committed to increasing trade value between the countries by at least 15 percent annually.
It is planning to cooperate with the Indonesian government to create an Arabic language website and take other steps to make it easier for Saudi businesspeople to understand details of products being offered by their Indonesian counterparts.
“We have agreed to create a user friendly website for the benefit of businesspeople from both countries,” he said.
He added that the Saudi government had also promised to make it easier for Indonesian businesspeople to travel to Saudi Arabia and to increase visits to Indonesia by their own entrepreneurs.
Meanwhile, Ardhi is not the only local entrepreneur upbeat about reaching out to the Saudi Arabia market. Renowned cosmetics maker Mustika Ratu and restaurant Pak Ndut are gearing up to expand there as well.
Mustika Ratu assistant export manager Maria Fryda claimed that its new peel-off masks would best meet the needs of women in Saudi Arabia.
“The weather is hot in Mecca and many women wear the hijab. That’s why we think they need our products,” she said.
On the other hand, Indo PD Mandiri — owner of the Pak Ndut brand — is certain that its halal certificate would garner it new customers in Saudi Arabia, in both locals and foreigners.
Mar 30, 2016
JEDDAH — The Saudi Arabian General Authority (SAGIA) has introduced early 2016 several steps aimed to simplify licensing procedures for foreign companies planning to lay down roots in the Kingdom of Saudi Arabia. Dr. Ayedh Al Otaibi, Director of Investment Policy and Regulations, said the steps included reducing the number of documents submitted by applicants and thus making a major reduction in time to less than 5 days; options for contracting business; ability to extend licenses up to 15 years; and improvements to entrepreneur visas.
SAGIA revealed a number of reforms to make investing in the Kingdom easier, said Dr. Ayedh. Documentation requirements were significantly reduced to 3 simple documents; one is board resolution declaring intent of investment in Saudi Arabia, another outlining the investment plan including its economic impact, and a third showing the financial ability of the investor to carry out operations.
In addition, Dr. Ayedh added, all foreign investors now enjoy a fast track service to receive investment licenses within a maximum of 5 days; and investors would now have the option to extend their licenses for up to a 15-year period.
The short cyclical nature of the construction sector is viewed by many construction companies as challenging especially in a foreign country. To help reduce this risk we are adopting a series of measures and providing options for foreign investors in this sector to allow for a more sustainable investment. This includes having the option of a 3-year license to explore the market and gradually work towards building the organization capabilities. After this period, the investor has the right to procure a renewable license after establishing a sustainable entity with a minimum number of personnel, fixed assets and equipment. The investor also have the option of applying for a renewable permanent license, provided the applicant submits an undertaking to establish an entity with minimum level of assets and personnel within one year from the date of the license.
Another option involves a temporary license for the implementation of specific contracts for specific duration with government or quasi-government agencies where the nature of these projects are characterized as non-frequent. The fourth option is that of granting a temporary certificate, in lieu of a classification certificate, for the implementation of one single government project provided the applicant conforms to the prescribed regulations and standards.
Dr. Ayedh also noted that “we have worked with the Ministry of Labor and other government agencies to now refine and align “investor” and “general manager” visa requirements”
He added, SAGIA will issue a support letter to issue a visa for “Investor” and /or “General Manager”, in line with foreign investment and international agreements. This relates to the visa and does not affect the licensing or Investor ownership as the regulations deal only with investor/general manager visas.
More particularly, these regulatory measures are related to applying for investors or general manager visa (limited to sole proprietorship, a limited liability company owned wholly or partly by individuals, and the branch of a limited liability foreign company, which is owned in part or whole by individuals), will get support letter for entrepreneurs ”
investor” visa must conform to one of the following requirements:
1. The activities of the entity need to fall under “innovative activities” with a valid patent used as part of the enterprise products.
2. The entity needs to be an exporter of its products with the condition that the technical specifications of the export products and the method of production must conform to the approved Saudi, GCC, or international specifications.
3. The entity must have a minimum of 50 workers and adhere to Saudi Arabia’s WTO commitment to employ a maximum of 25% foreign labor as part of the total workers employed in foreign or joint-venture companies and of these, 10% are managers and professionals and 15% technicians and workers, or vice versa.
4. The entity’s paid-in capital must not be less than SR37.5 million.
The application of these requirements include existing and future licenses of the entities referred to above. Existing licenses will be granted a lead time of twenty-four months or the date before the second renewal of the license, whichever comes first, to adapt these conditions. Owners will also have the option to obtain business visit visas in accordance with regulations and international obligations of the Kingdom of Saudi Arabia.