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Exporting to Saudi Arabia from USA has become increasingly profitable. Slow inflation rates and falling public debts have given Saudi Arabia increased buying power. This is good news for exporters in several markets, but especially in agriculture and the food industry.
The Office of the U.S. Trade Representative (USTR) has recorded a positive trade balance with Saudi Arabia since 2019. Exporters from the U.S. must work with Zakat, Saudi Arabia’s tax and customs authority, to bring goods into the kingdom. A trade agreement in 2003 improved trade relations and tariff rates for exporting.
See what export products are in high demand and learn to navigate the customs system of Saudi Arabia’s import process.
The Kingdom of Saudi Arabia is home to vast amounts of natural resources, the number one being oil. Their economy revolves around oil and other petroleum products, making it their top export. It’s often seen as one of the wealthiest nations in the world because of how much money this valuable Arabian export can generate.
That wealth doesn’t mean everyone’s rich. The truth is that the majority of the population lives on what most U.S. citizens would consider an average salary. They are just average people with needs like everyone else.
Saudi Arabia’s exports, other than oil, are quite limited, so their economy isn’t overly complex. The kingdom must rely on a variety of goods from other nations to make up for this.
A large part of Saudi Arabia’s imports are from:
The majority of imported goods are ones necessary for everyday living. In fact, foodstuffs and agricultural items are among the most common products imported into the country.
There is also a significant expatriate community that, as of the last census in 2018, accounted for 37.7% of the total population. These individuals are often on short-term employment contracts, but they represent a variety of regions and seek products from abroad that are more familiar.
According to OEC reports from 2020, the Kingdom of Saudi Arabia actually imported $143 billion dollars worth of goods from around the world. Of that, $10.8 billion worth came from the United States.
It’s no secret that relationships between the United States and many middle eastern nations have been strained in recent decades. While there have been disagreements between the U.S. and Saudi Arabia, there are no laws on either side currently prohibiting U.S. exports in general.
In fact, U.S. exports have actually been increasing. As of May 2022, the year-over-year value of exports increased by 62.2%, or by $813 million.
That said, the U.S. and Saudi Arabian cultures are very different. If you are planning on exporting, you should prepare to deal with a few different challenges.
Some of the obvious challenges of exporting to Saudi Arabia are the same ones that face any exporter, such as language and writing systems.
The official language is Arabic and written communication uses the Arabic alphabet. In appearance, it’s very different from the Modern Latin Alphabet system used in English and other popular languages in the U.S. such as Spanish or French. This can make even basic translations challenging.
Thankfully, English is becoming more common and is now used in many daily business talks.
Once you’ve managed the language issues, you need to tackle cultural differences. Many of these stem from the nation’s Muslim heritage and use of Islamic law as the official law of the land.
U.S. exporters should be aware of some of the following common practices:
The good news is that in recent years the Saudi government has been working to improve its import and export trade practices. For starters, it joined the World Trade Organization (WTO) in 2005.
Membership requires countries to stick to certain standards and guidelines which make it more attractive to investors. In 2016, a new economic strategy was launched called Vision 2030. Its various goals include a push towards a more internationally competitive economy.
For its trading partners, this could mean greater opportunities for exports as well as imports. Higher standards of living create demand and increased opportunities for international trade.
The International Trade Administration (ITA) maintains a list of industries with export potential. Exporters who want active trade and investment opportunities for long-term business can check their site for basic information.
The latest official reports from the U.S. Department of Commerce (DOC) cover the 2020 export trade trends. It shows the commodity groups that make up the bulk of the trade value.
| Commodity Group | Percentage of Export Value |
| Transportation Equipment | 32.1% |
| Machinery & Mechanical Appliances | 21.4% |
| Chemicals, Plastics, Leather Products | 12.1% |
| Agriculture | 11.1% |
| Arms & Ammunition | 5.5% |
As far as specific products go, much is made up of consumer-ready items. We already mentioned that until recently most of the economy revolved around oil. The lack of manufacturing centers and factories makes most consumer goods a strong choice for exporters.
Common products represented by the top three commodity groups include
With such a wide variety of choices even in these products, there are plenty of opportunities for exporters of all experience levels. Among the steadiest investments for exporters would also be food.
Even though Saudi Arabia is the largest country, by landmass, in the Arabian peninsula, only 1.5% of its land is suitable for growing food. Even with some extreme efforts by the Saudi government to increase local agriculture, 80% of their food comes from outside the country.
U.S. food exports are a valuable commodity to Saudis and are seen as a high-quality import. Because of this view, U.S. products tend to command higher prices and margins compared to other food imports. The variety of foods produced in the U.S. provides more options for the expanding young generation of Saudis with more diverse tastes.
In-demand food products include:
A rising number of Western-style grocery stores and fast-food chains provide plenty of distribution avenues for all kinds of food products.
Of course, there are challenges in this market as well, particularly for those interested in exporting meat and poultry products. The Saudi Food and Drug Authority (SFDA) has strict regulations that ensure exports meet halal standards.
Halal, which is Arabic for permissible, is used to describe foods that meet processing and cooking standards that comply with Islamic law and the Qur’an. This means the SFDA requires significant amounts of information on all kinds of products.
SFDA information requests can include:
The importance placed on importing hygienic and halal foods means U.S. exporters need to get pre-approval from the SFDA. You have to register all products you plan to bring into the country, even if other exporters are bringing in the exact same product.
Every product registration must have the following information attached:
Changes to any of these require an exporter to re-register. Some of the SFDA’s requirements may seem extreme to those unfamiliar with them. However, providing good food services to Saudi Arabia is usually a pretty profitable venture. The size of the market and reasonable tariff rates are attractive.
Most food imports are only subject to a 5% import duty, sometimes rising to a 15% duty. Fresh red meat, tea, and coffee actually enter duty-free. Considering the size of the cattle industry in the U.S., exporting beef can be very profitable.
Products you may wish to avoid include sugary soft drinks or sugary drinks in general, which now have a 50% excise tax. In 2017, the kingdom also placed a 100% tax on energy drinks, cigarettes, and tobacco products.
While the U.S. isn’t known for its strict export licensing requirements, Saudi Arabia represents one of the nations that imports many goods that need one. Many of these are for products with military applications.
The Department of Commerce manages the Bureau of Industry and Security (BIS). BIS is the agency responsible for processing export licenses for individuals or companies working with products restricted by the Export Administration Regulations (EAR).
While all products that come from the U.S. fall under EAR, only a limited number need special permission to export. These are products that have an Export Control Classification Number (ECCN).
Saudi Arabia has built up much of its military and defense system with U.S. supplies, most of which need ECCNs. In 2020, $184.4 million worth of BIS-regulated goods were exported to Saudi Arabia. This represented 2.6% of all exports that year.
| Product Group | Number of Approved BIS Licenses |
| Chemical Manufacturing Facilities and Equip. | 192 |
| Military Aircraft and Related Parts | 62 |
| Protective and Detection Equip. | 40 |
| Ground Vehicles and Related Parts | 31 |
| Cameras | 31 |
| Military Electronics | 27 |
| Integrated Circuits for Information Security | 19 |
| Firearms | 19 |
| Military Gas Turbine Engines and Parts | 18 |
If you are seriously considering exporting products that fall into any of the above categories, or others that may require an ECCN, you have to register with BIS first. Even this process requires some preliminary steps, such as applying for a Company Identification Number.
These are highly regulated products that a company or individual shouldn’t attempt to export without professional guidance from cargo exporters and a few years of personal experience. While very profitable, a mistake at any point in the process can have severe financial and legal consequences.
For more information on this type of export, check out our article on aircraft part exports.
There are two types of banned exports to Saudi Arabia. First, any product denied a BIS license cannot be exported. In this case, you won’t know that a product is banned until you get the rejection notice from BIS.
The second type of banned exports are products that the Saudi government doesn’t legally allow within its borders. Most of these products are banned because they violate parts of Islamic Law.
Banned or restricted products to Saudi Arabia include:
If these products are found among imports, accidental or not, you don’t only get rejected – you get fined. Fines can vary from $14 to $200 per confiscated item for attempting to bring these into the kingdom.
Some of these items are denied as bulk imports but are allowed for personal use. If your purpose is to export products to Saudi Arabia for mass distribution, those allowances won’t do you any good.
To be safe, always check with Zakat. That is the Tax and Customs Authority of Saudi Arabia, under the authority of the Minister of Finance.
Saudi Arabia’s strict import controls mean plenty of documentation, and the occasional import license, are needed for smooth entry.
The most basic documents required for any import are:
Saudi customs state the certificate of origin get authenticated by a local chamber of commerce in the U.S. for validity. Marking the products themselves with the country of origin is also required. It should be a permanent label and not easily removed. The commercial invoice also needs to include specific sets of information.
All commercial invoices should have:
More regulated products require additional documentation. Many common electrical products require a Certificate of Conformity. To get one, your product needs to meet the requirements of the Saudi Standards, Metrology and Quality Organization (SASO). SASO bases its electrical standards on those of the International Electrotechnical Commission (IEC).
An IECEE Certificate shows a product’s compliance with SASO. There are three requirements for getting and keeping an IECEE certificate.
Always double-check with the local customs offices before exports leave the U.S. to make sure all shipping documents are completed. Before the goods actually arrive, you also need to take the time to settle customs declarations.
Clearing procedures, called Fasah, start 48 hours before goods arrive. Your shipping documents can go through a customs broker or you can submit them online to Fasah directly.
The U.S. Department of State does maintain an embassy in Saudi Arabia. Besides diplomatic help, they also provide some import/export aid through the U.S. Commercial Service.
During the inspection process, further regulations may become necessary. Again, it depends on the kind of product brought in. For all products, you will need to have a consignee present in Saudi Arabia when the goods arrive for the clearance process to begin. While the individual doesn’t have to physically be at the inspection site, they need to be within the kingdom.
Electronic devices and media are often inspected for content by the Saudi security office to make sure content is not indecent. A magazine with a cover of a woman in a bathing suit, for example, can be viewed as indecent.
Products often inspected include:
If it can store video or audio material – it’s fair game for inspection services. Saudi customs will confiscate entire shipments and you may never get them back or the money you invested in them.
There are also a number of strict packaging rules to make customs clearance and inspection a smoother process. Rules are specific to products and type of transport container. If your shipping or packing method is blamed for a delay in procedures, you are likely to face some kind of fine.
Examples of required packing include:
Make sure your U.S. distributor and your chosen shipping service are aware of the strict requirements. Labels, as an example, are more easily applied at the manufacturing or packing center in the U.S. rather than in a storage facility waiting to be loaded onboard a ship.
When it comes to taking on challenges, learning how to export to Saudi Arabia comes with some risks. Get help from Cargo Export USA to turn those risks into secure profits. Our team has been working in international logistics for decades and we know what it takes to move goods all over the world.
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