Opinion

What does the Saudi ‘green card’ mean for entrepreneurs?

What does the Saudi ‘green card’ mean for entrepreneurs?

Author

Call it the “Privileged Iqama” system or “Saudi green card,” the end result is still the same. This new residency scheme that has just been approved by the Saudi Cabinet will allow skilled foreigners, capital investors and entrepreneurs to live and work in Saudi Arabia without the need for a sponsor.

Having lived in the US, the UK and other countries in my youth and adulthood, I saw the impact of residency schemes that encourage people to migrate for opportunities, and experienced first-hand the growth that these schemes brought to these countries. I am very optimistic that this Saudi scheme will also bring more non-oil dependent economic growth and prosperity to our country, that will help us achieve our 2030 vision.

So what will this scheme mean for foreign entrepreneurs wanting to enter the Saudi market? Well, first and foremost, it will allow them to freely declare their actual status as “entrepreneurs,” and work full time on their startups without taking a full-time day job in order to have legal status in Saudi. That alone is a big burden lifted. Focusing on their startups is what will take entrepreneurs to the next level, and expand their businesses. Giving them the freedom to do what they need to expand their businesses and recruit who they see fit is essential.

Speaking to my American co-founder, Tim Abbott, at our company Upskillable about what this may mean to him as a part-time entrepreneur in Saudi, was revealing. Tim told me: “I think this scheme will bring a wave of innovation to the Kingdom, and encourage many bright minds to set up shop here. Additionally, some expats believe it will eliminate the exploitation they feel has happened in the past when trying to start businesses with local partners with no legal framework. Furthermore, it will allow entrepreneurs to build some of their innovative ideas in the Kingdom, instead of going to other jurisdictions when they don’t really want to do business in those places. The excitement around this new development is contagious and people are simply waiting for the details to be ironed out.”

This is going to be a big economic stimulus for Saudi Arabia.

• Dr. Taghreed Al-Saraj is a best-selling Saudi author, an international public speaker and an entrepreneurship mentor.

Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point-of-view

Expats welcome Saudi ‘green card’ but say questions need to be answered

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Qualified expatriates will be allowed to own businesses and property in the Kingdom under the new residency permit. (AFP)
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Updated 17 May 2019
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Expats welcome Saudi ‘green card’ but say questions need to be answered

  • Saudi Arabia’s government approved the scheme on Tuesday
  • The “green card” allows expatriates to live and work in the Kingdom without the need of a local sponsor

JEDDAH: The Saudi Cabinet has given formal approval to the Privileged Iqama residency scheme, widely known as the Saudi “green card.” 

The scheme will enable expatriates to permanently reside, own property and invest their assets in the Kingdom.

A special committee has been given 90 days to determine regulations governing the scheme, including fees for applicants, conditions and procedures, and a schedule of benefits.    

The scheme has been welcomed by expats in the Kingdom. 

Lia Cidalia Da Graca Espiguinha, a 38-year-old Portugese licenced child care provider, said that the decision was “good for the country.”

“A lot of people wish to be here working, and a lot of people want to know the country better and they want to come to Saudi Arabia; so I think it is good for all,” she said. “It is good for the people that want to come and good for the country because it will bring money.”

However, Yawar Hussein, a 27-year-old software technician based in Jeddah, believes qualifying candidates should not be grouped into a single category. 

“My parents came from India 35 years ago. They sacrificed a lot of their life for this country. My brothers and sisters were all born here. I can say that in many ways I feel more Saudi than Indian. I hope this ‘green card’ iqama will offer some exemptions or discounts for us expats that were born and have only ever lived in one country — the Kingdom of Saudi Arabia.”

Mohammed Abu Omar, a 47-year-old branding consultant from Yemen, believes that it is still too early to form a definite opinion, but nevertheless believes it is a step in the right direction.

“I believe it is still early, as we have no clue who will be eligible for this or not. Also, there is the question of the fees. Will this cater only to those who have large bank accounts? But overall, this is great news of course. This should have been done decades ago. God-willing, it benefits this wonderful country, because the (expat) people have a lot to offer, and the contribution will be massive. So, the way I see it, this opportunity should open up the market for hiring more local people as the demand will rise with everyone having the opportunity and right to own their own business. But these laborers are actually the majority of people who are sending money out of the Kingdom, and if this (green card) is catered to them, surely they will begin to reinvest back into the country instead.”

And while many expat workers have welcomed the news, some, such as Bangladeshi driver, Ameen Udeen, say they will be unaffected by the decision.

“This ‘Privileged Iqama’ means nothing to me as a Bangladeshi driver who makes SR2,000 a month (of which I send most back home). I haven’t heard what the fees will be but they say that it will be very costly. I’m sure that I will not be able to afford it. For me, this new iqama is not meant for us drivers, house-helpers and laborers. Surely we cannot afford the benefits given our salary,” he said.

The Saudi Shoura Council voted for a new residency permit for qualifying expatriates, the “Privileged Iqama,” giving them the right to permanently live, work and own their own business and property in the Kingdom.

The permit scheme will enable Saudi Arabia to attract investors, Commerce and Investment Minister Dr. Majid Al-Qassabi said.

Al-Qassabi noted that the scheme is similar to residential practices around the world, attracting quality residents to the Kingdom while protecting the interests of Saudi citizens. 

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Ibrahim Al-Omar, governor of the Saudi Arabian General Investment Authority (SAGIA), said: “Our aim is to attract innovators from across the world to live and work in Saudi Arabia — and this reform will play a significant role in doing so. These investors and entrepreneurs will help to drive private-sector growth.”

“It is important that stakeholders understand that Saudi Arabia offers significant long-term opportunities,” he said. “We want to attract people who will build a foundation and a network in Saudi Arabia, and who will play a role in the future development of the Saudi economy and benefit from the growth opportunities it presents.”


Saudi Arabia’s Cabinet approves new tobacco license regulation

Updated 44 min 51 sec ago
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Saudi Arabia’s Cabinet approves new tobacco license regulation

  • Annual license will cost more than $26,000
  • New measure could lead to more vaping, says expert

JEDDAH: Cafes and restaurants in Saudi Arabia will have to pay up to SR100,000 ($26,675) a year to sell tobacco products inside and outside their premises, after the Cabinet approved a new licensing regulation.

Saudi Arabia was one of the first countries to ratify the World Health Organization (WHO) Framework Convention on Tobacco Control in 2005, an ambitious plan to reduce smoking rates from 12.7 percent to 5 percent by 2030.

The Health Ministry has taken steps to curb smoking through awareness campaigns and cessation clinics. Taxes on cigarettes doubled in 2017, leading to a 213 percent increase in smokers seeking help to kick the habit in the months that followed.

Saudi restaurant owner Hassan Moriah supported the Cabinet decision, although he said customers would be hit the hardest.

“Every restaurant and café manager should be licensed to provide this service. I believe all restaurants and cafés will support this decision too, but I believe the only people who will be affected by this decision are the customers,” he told Arab News. “All outlets will raise the price of hookahs. The actual people who would be paying for it to reach SR100,000 are the customers and not the cafés. Yes, there will be people who cannot afford to pay the new prices and they may have to cut down on their hookah consumption.”

The new regulation would also affect places that were not so popular, he added.

Associate professor of history at Middle Tennessee State University Dr. Sean Foley, who is writing a book on smoking in Saudi Arabia and the wider Muslim world, said the new law was part of the Kingdom’s attempts to address a serious health crisis while also meeting a goal of the Vision 2030 reform plan to move away from non-oil revenues.

“While raising cigarette taxes is a proven strategy for reducing smoking, the new SR100,000 annual fee for Saudi restaurants to permit patrons to smoke may be even more important,” he told Arab News. “Many restaurants may not be able to afford to pay for such an expensive permit, so there is likely to be less smoking in restaurants. That would mean there will be fewer people exposed to second-hand smoke in restaurants, itself a serious problem, and existing smokers would have a powerful new incentive to quit. Studies have consistently shown that creating smoke-free areas is one of the most powerful tools to motivate and help existing tobacco users to quit while preventing new smokers from picking up the habit.”

"The academic, who has written "Changing Saudi Arabia: Art, Culture, and Society in the Kingdom" published this year, said the Kingdom had some of the highest smoking rates in the world.

He added that the problem was getting worse as the number of smokers in Saudi Arabia was expected to rise from six million to 10 million in the coming years.

He warned that while there was the danger of a rise in smuggling and other black-market activities — because of the higher costs associated with smoking — there were other challenges too.

“The real danger is not the rise in black-market activity but that Saudis will continue to switch in large numbers to a product that is currently legal to use — vaping. While purchasing any of the products associated with vaping is illegal in the Kingdom, it is legal to vape in public and many Saudis buy vape juice and vape modules online.”