25 March 2024

From April 1, 2024, Saudi Arabia will waive customs duties on raw materials, semi-finished goods and fully manufactured products, as well as packaging materials, machinery, equipment and spare parts,... and necessary materials for production.

Opportunities for Vietnamese industrial goods

According to the Foreign Market Portal, on March 7, 2024, the Saudi Ministry of Industry and Mineral Resources announced that it will exempt industrial customs duties for raw materials, semi-finished goods and finished manufactured products, as well as packaging materials, machinery, equipment and spare parts... and the necessary materials for production from April 1, 2024.

Accordingly, from March 14, 2024, enterprises importing and manufacturing in Saudi Arabia are allowed to submit requests for duty exemption on the web platform, tax application, service selection and attach necessary data and descriptions and explanations, (including average selling price, product name, etc  images, as well as suppliers, key customers, and other relevant details).

This new tax policy will be a good opportunity for Vietnam's export of machinery, equipment, components and spare parts of industrial goods to this market (annually we export to Saudi Arabia over 125 million USD of machinery, equipment, components and spare parts for industrial goods). With the new policy, we can promote exports with higher value in the future.

Saudi Arabia's industry is experiencing sustained growth, with manufacturing assets reaching $132 billion since the launch of its Vision 2030 economic diversification strategy in 2016.

Recommendations when exporting goods to Saudi Arabia

Also related to the Saudi market, previously the Import-Export Department (Ministry of Industry and Trade) issued recommendations to enterprises exporting to this market.

Specifically, information from the Vietnam Trade Office in Saudi Arabia informed internal information from the Saudi Food and Drug Administration (SFDA) to leaders of the Federation of Chambers of Commerce, Riyadh, Jeddah, Dammam Chambers of Commerce that some food products exported to Saudi Arabia have Halal certificates but the agency issuing these certificates does not is on a list approved or authorized by the SFDA.

This will result in the suspension of customs clearance or the return of goods to the port of export due to SFDA regulations under Royal Decree (M/1) dated 30/10/2014 and Food Safety Management Law No. 3-16-1439 dated 27/12/2017 issued by SFDA.

The Import-Export Department suggested that member enterprises exporting food to the Saudi Arabian market need to monitor, capture information and comply with regulations on Halal certification. In case the enterprise is exporting goods, the goods have been or are on the way to the ports of Riyadh, Jeddah, Dammam, please access the Halal certificate of the unit authorized by SFDA to avoid being detained or returned.

According to the Vietnam Trade Office in Saudi Arabia, the country has a great demand for agricultural products, food, Halal, organic, fresh vegetables and fruits. Imports from Vietnam reached 200 million USD/ year, of which agricultural and fishery products reached over 80 million USD. The country also has strict regulations when goods must be registered with the Saudi Food and Drug Authority and must be approved by the agency.

In addition, the agency enforces inspections and inspections very strictly, they have the right to formally inspect the operational processes of the competent authority in the exporting country to verify that the legal regulations and management system in that country comply with Saudi food laws.

However, to ensure successful trade, Vietnamese enterprises should go through reputable units to verify partners, better understand corporate culture, as well as contents in commercial contracts.

Source: vla.com.vn