Amendment to Saudi Law: Business blessing for Bangladeshis
"Once they get their businesses registered, they will enjoy all sorts of support from the Saudi government and our foreign ministry. They will be able to run business peacefully and earn legally."
Saudi Arabia's recent amendment to a law allowing non-citizens to run businesses without local sponsors has opened up opportunities for Bangladeshi traders in the kingdom.
Bangladeshis running businesses with mandatory Saudi sponsors had long been subjected to exploitations, said manpower experts.
The sponsors often use the renewal of "Iqamah" (temporary residency permits) as leverage to extract huge sums from Bangladeshis and take a cut from the profits without any investment, they pointed out.
The amendment to the Anti-Commercial Concealment Law, which took effect in March, would enable Bangladeshis to do business independently and also allow them to send more remittance back home, the experts said.
As per the changes in the law, both Saudi and non-Saudis can get their businesses registered by August 23 this year. Besides, a provision was included in it through another amendment for stricter punishment for running illegal businesses.
The move is part of the Kingdom's Vision 2030, which seeks economic reforms by providing investment opportunities, stimulating local investment, and attracting foreigners by providing assistance to investors and incentive programmes, according to my.gov.sa.
Over two million Bangladeshi migrants live in Saudi Arabia, said Bangladesh embassy in Riyadh.
Sources at the embassy said many Bangladeshis expressed eagerness to get their businesses registered. However, it could not be known how many have applied for registration.
MA Rashid Shah Shamrat, former secretary general of Hajj Agencies Association of Bangladesh, said, "The Saudi sponsors, while renewing the Iqamah after three to four years, take a handsome amount of money from Bangladeshi businesspeople. They also take business profits without any investment."
Golam Moshi, a former Bangladesh ambassador to Saudi Arabia, said, "There are many instances where sponsors ousted Bangladeshis from businesses when they saw high profits. Bangladeshi businessmen could not fight back because of legal loopholes."
That had been the practice for over four decades and the changes in the law will enable Bangladeshis to be free from sponsors, he observed.
By getting their businesses registered, Bangladeshi migrants will now be able to operate those independently and legally, said a source at Bangladesh embassy.
"There are many Bangladeshis who have undertaken business ventures after working as unskilled workers for years. They are involved in hotel, catering, RMG, carpet, date and retail businesses in their Saudi sponsors' names. Now they will be able to run businesses independently," said the source.
In an urgent circular, the embassy asked all Bangladeshi investors, including migrants, to get their businesses registered by August 23.
Registration has to be completed through the website of the Saudi Arabia's Ministry of Commerce, the circular read.
"The Ministry of Commerce of Saudi Arabia took the initiative in order to give violators a chance to correct their business status," it added.
According to one of the amendments to the law, penalty for violations -- both KSA citizens and foreigners -- would be confiscation of business, a fine of 5 million Saudi riyals (approximately Tk 11.29 crore) or five years' imprisonment or both, the circular warned.
Earlier, violators were fined 50,000 riyals or sentenced to one year's imprisonment or both.
Detailing the opportunities, the circular said a non-Saudi owner of a registered company would get privileged residency, which would allow the owner to recruit workers and own property. He or she can also get permanent residency by making a one-time payment of 800,000 riyals in case of direct investment from Bangladesh.
The law also allows business partnership between Saudis and non-Saudis and transfer of companies to non-Saudis. Besides, non-Saudis can sell their businesses to Saudis and leave permanently.
Since it is a very important matter, all Bangladeshi businesspeople and investors have been asked to get their businesses registered on an emergency basis, said the circular.
The Daily Star talked to several Bangladeshi businesspeople in Saudi Arabia, who appeared to be in doubt about availing themselves of the new opportunity.
Omar Dewan, who runs a hotel in Makkah, told this correspondent over phone that they were still confused about the registration.
"We're not sure whether it will be beneficial for us. After the registration, we'll be under the supervision of the Saudi government. But considering the bitter experiences of the past, we are not sure if our grievances will be heard and solved," he said.
Abdullah Khyat, a caterer and hotel operator, said the Saudi government was not giving benefits and protection to businesspeople like the UAE was offering.
"We've already incurred huge losses due to the coronavirus pandemic. If we get our businesses registered, we will have to pay the government excessive tax which is not possible for us to bear.
"I'm not sure whether I'll register," said Khyat, who has been living in Saudi Arabia for 41 years.
Murtuza Zulkar Nain Noman, counsellor (economic) at Bangladesh embassy in Riyadh, said they sent the circular to the Ministry of Commerce, Industries, FBCCI and other stakeholders.
"At the same time, the Embassy is organising several webinars, and community consultations over telephonic conversation since April to make aware Bangladeshi community in Saudi Arabia of this new law and registration," he said.
"Bangladeshi investors can also apply for opening businesses here. The Saudi authorities will grant them permanent residency," he said.
Golam Moshi is of the opinion that the Saudi government has taken the initiative to emerge as a business giant in the Middle East.
"They have seen that the UAE is going ahead. So why won't they [Saudi Arabia]?"
Terming it a good move, Moshi said, "It will bring an end to that chapter [exploitation].
"Once they [Bangladeshis] get their businesses registered, they will enjoy all sorts of support from the Saudi government and our foreign ministry. They will be able to run business peacefully and earn legally."
Regarding the confusion among Bangladeshi migrants, he said, "Any new initiative creates doubts. But as time progresses, people get used to it."
These people went to Saudi Arabia as workers. They are afraid of paperwork, said Moshi, who served as ambassador to the kingdom from February 2015 to July 2020.
Sheikh Fazle Fahim, vice president of the Confederation of Asia Pacific Chambers of Commerce and Industry, said the changes in the Saudi law would help create jobs for more Bangladeshis and increase the flow of remittance.
"Earlier, Bangladeshis could only do business by sharing ownership with Saudi nationals. It was one kind of barrier for our businesspeople," said Fahim, also former president of the Federation of Bangladesh Chamber of Commerce and Industry.
"Besides, many of our businesspeople operate businesses abroad but are going through tough times due to the economic downturn. The move will give them the opportunity to invest in a diverse market and mitigate loss," he added.