Kingdom of Saudi Arabia’s (KSA) government authorities are working towards enhancing the investment environment, which was planned under the National Transformation Plan and Vision 2030. In this regard, the Saudi Arabian General Investment Authority (SAGIA), which is the governing authority dealing with foreign direct investments (FDIs) and has been working hard to develop the foreign investment regime targeting to simplify some of the restrictions put on global investments in the KSA.
According to this, all the shipping agents would be able to function independently with the support of the KSA’s privatization plans. Till some time back, the ship agency services were only allowed to be conducted by a 100 percent owned KSA company or any KSA national. However, after the recent reforms, foreign shipping companies or shipping agents are allowed to decide if they would work with a local investor or not and also have the right to function autonomously as ship agents at Saudi Arabian ports. After the recent letter that was issued in August 2018 by the Saudi Minister of Commerce and Investment, the Minister of Commerce confirmed that now the shipping agency operations would not fall under the purview of the Saudi Agency Law and thus it will not be a prohibited activity for any companies that are non-KSA owned. This has enabled giving foreign investors a shipping agency license.
SAGIA has also confirmed that they have started welcoming all global shipping companies and shipping agents, and there are no specific requirements to perform the shipping agency activities besides the usual requirements for establishing a company in the KSA. This is a positive step for the marine sector and also for the KSA economy as a whole.
The foreign investment license would be valid for a period of five years and could be renewed every year. Investors would also need to get a shipping agency license from the Saudi Ports Authority (Mawani) after the setting up of the company and prior to conducting the activities. Mawani and SAGIA are collaborating to execute this change and to apply the necessary process for regulating the investment of various shipping agencies.
Mawani confirmed that shipping agency the activities would mainly include vessel clearance and also related activities such as booking of cargos, as loading and unloading of cargos, paying port dues, representing the shipping line and also supplying various supplies to ships. However, foreign direct investment companies cannot perform the following services, that is, customs clearance and supplying fuel to ships.
