About Saudi Arabia
The Kingdom of Saudi Arabia (hereinafter referred to as “KSA”) is a country located in Southwest Asia. It covers the bulk of the Arabian Peninsula, and has a land area of about 2150000 km2, making it the fifth-largest country in Asia, the second largest in the Arab world, and the largest in West Asia and the Middle East. KSA is bordered by the Arabian Gulf, United Arab Emirates and Qatar in the east; Red Sea in the west; Kuwait, Iraq and Jordan in the north; Yemen and Oman in the south. Riyadh, the economic powerhouse of KSA, is the capital of the country.
KSA occupies an exceptional geographical location in the world when it comes to logistics and international trade. It sits between three continents being Europe, Africa and Asia. This gives it a unique advantage when it comes to the Asia-Europe trade routes and distributing goods through the Arabian Peninsula.
The current population of KSA in 2023 is 36,947,025, recording a 1.48% increase from 2022.
KSA’s modern identity took shape in 1932 when Abdulaziz Ibn Saud unified the disparate regions into what we know as the Kingdom of Saudi Arabia. This marked the beginning of a transformative journey driven by the discovery of oil in the late 1930’s, this propelled the country's economic and infrastructural development, modernizing its society. Over time KSA has emerged as a significant player in global affairs and fostered strategic relationships with nations across the world.
Today KSA is witnessing an evolution across all its socioeconomic categories, and it is transitioning from an oil-centric economy to a diversified one, striving to expand into renewable energy, tourism, and manufacturing. The reforms are geared towards long-term economic stability, and at a societal level the Kingdom has made significant improvements in areas such as women’s rights and minority participation.
Politically, KSA is led by a monarchy, the Al Saud family, with King Salman bin Abdulaziz Al Saud at the helm since 2015. The Crown Prince, His Royal Highness Mohammad bin Salman has been the driving force behind the nations evolution and has been revered for the significant strides being made, underpinned by the KSA Vision 2030 that he announced in 2016.
The largest cities in KSA are (i) Riyadh as the capital and commercial center, (ii) Jeddah, (iii)Mecca, (iv) Medina, (v) Dammam, in addition to Al-Mubarraz, Taif, Tabuk, Buraydah and Jubail which are also some of the large cities in the region. Each of these cities has industrial strengths that go beyond hydrocarbons and tie in with the kingdom’s Vision 2030 strategy to reduce its dependence on oil and diversify its economy.
The official language is Arabic, therefore all documents are first required to be translated into Arabic by an official translator and thereafter submitted to the relevant government authority.
The Saudi culture both socially and commercially has a rich history with progressive aspirations, this results in a vibrant and dynamic present. KSA is unique in how it safeguards its heritage through several authorities that organise and promote cultural programs across Saudi. This includes empowering artists and providing a platform to showcase their work. The preservation of culture through society is vital to KSA.
Similarly, the business landscape is built on understanding the cultural nuances that are part of doing business in KSA. Building strong and trusting relationships is vital, particularly those that can harness a personal feel to them. This stems from effective communication and ensuring conversations are relevant. It is often said in KSA during the process of building relationships, it's crucial to offer compliments to hosts and their organizations and this is reciprocated.
The diversification of the Saudi economy, underpinned by Vision 2030, is expected to help to sustain the growth of the nation’s economy in the long term. The growth rate of the Saudi economy has been volatile in recent years, however, it has rebounded and the growth rate is expected to remain positive in the coming years.
Saudi Arabia's real estate market is poised to thrive, with $1 trillion designated for property and infrastructure projects. The tourism sector, integral to diversification, is set to attract private investment, with ambitious goals of attracting 100 million visitors per year by 2030. The energy sector is undergoing transformation, targeting 70% of energy needs from renewables by 2030. Additionally, the healthcare, retail, and aviation sectors are also positioned for expansion.
The GDP of Saudi Arabia is 1.1 trillion USD (2022). The GDP growth rate for KSA in 2022 was 8.7%, which was higher than the global average of 3.6%. The GDP growth rate has also been positive for the past 10 years, with an average growth rate of 2.58%.
According to the Basic Law of Governance, the Kingdom of Saudi Arabia is a fully sovereign Arab Islamic state. Its religion is Islam and its constitution is the Holy Qur'an and the Sunnah (traditions) of the Prophet Muhammad (PBUH). The Qur'an and the Sunnah form the Islamic Shari’ah, which is the primary foundation of all Saudi laws.
Saudi Arabia is a monarchy, governed by His Majesty King Salman bin Abdulaziz Al Saud, in consultation with an appointed consultative assembly called the Shoura Council. The King is both the Head of State and the Head of Government, and chairs the Council of Ministers, a cabinet made up of ministers responsible for the various governmental portfolios in the Kingdom.
Each region of Saudi Arabia is overseen by a Governor/Prince, who manages his region in consultation with a municipal council made up of a combination of government appointees and members elected through public elections.
A Saudi court has considerable discretion to apply the basic Shari’ah precepts to a particular set of circumstances. Saudi courts generally regard themselves as competent, consistent with general Shari’ah principles, to determine each particular case before them in order to achieve a fair result in all the circumstances of the case. The independence of the judiciary is a principle enshrined in the Basic Law of Governance and the Law of the Judiciary.
The formation and enforceability of contracts is governed by Shari’ah principles. Under Shari’ah, contracts which are not expressly prohibited are permitted. Contracts should be reviewed for compliance with Saudi law and Shari’ah before being entered into. If a local court accepts jurisdiction, it would not give effect to a provision providing for a foreign law to govern the contract.
In practice, parties are generally free to agree their commercial bargain, except and to the extent that it contravenes Shari’ah principles (as interpreted and applied in Saudi Arabia) or any secular law or other statutory or regulatory considerations. This is the basis on which, for example, obligations relating to the payment of interest (prohibited in Islam) are generally not enforceable in Saudi Arabia.
