Doing Business 2018 Saudi Arabia
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Doing Business 2018 Saudi Arabia
Page 1
Doing Business 2018 Saudi Arabia
Economy Profile of Saudi Arabia
Doing Business 2018 Indicators
(in order of appearance in the document)
Starting a business Procedures, time, cost and paid-in minimum capital to start a limited liability company
Dealing with construction permits Procedures, time and cost to complete all formalities to build a warehouse and the quality
control and safety mechanisms in the construction permitting system
Getting electricity Procedures, time and cost to get connected to the electrical grid, the reliability of the
electricity supply and the transparency of tariffs
Registering property Procedures, time and cost to transfer a property and the quality of the land administration
system
Getting credit Movable collateral laws and credit information systems
Protecting minority investors Minority shareholders’ rights in related-party transactions and in corporate governance
Paying taxes Payments, time and total tax rate for a firm to comply with all tax regulations as well as post-
filing processes
Trading across borders Time and cost to export the product of comparative advantage and import auto parts
Enforcing contracts Time and cost to resolve a commercial dispute and the quality of judicial processes
Resolving insolvency Time, cost, outcome and recovery rate for a commercial insolvency and the strength of the
legal framework for insolvency
Labor market regulation Flexibility in employment regulation and aspects of job quality
Page 2Doing Business 2018 Saudi Arabia
About Doing Business
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected
cities at the subnational and regional level.
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying
to them through their life cycle.
Doing Business captures several important dimensions of the regulatory environment as it applies to local firms. It provides quantitative
indicators on regulation for starting a business, dealing with construction permits, getting electricity, registering property, getting credit,
protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. Doing Business also
measures features of labor market regulation. Although Doing Business does not present rankings of economies on the labor market
regulation indicators or include the topic in the aggregate distance to frontier score or ranking on the ease of doing business, it does present
the data for these indicators.
By gathering and analyzing comprehensive quantitative data to compare business regulation environments across economies and over time,
Doing Business encourages economies to compete towards more efficient regulation; offers measurable benchmarks for reform; and serves
as a resource for academics, journalists, private sector researchers and others interested in the business climate of each economy.
In addition, Doing Business offers detailed subnational reports, which exhaustively cover business regulation and reform in different cities and
regions within a nation. These reports provide data on the ease of doing business, rank each location, and recommend reforms to improve
performance in each of the indicator areas. Selected cities can compare their business regulations with other cities in the economy or region
and with the 190 economies that Doing Business has ranked.
The first Doing Business report, published in 2003, covered 5 indicator sets and 133 economies. This year’s report covers 11 indicator sets
and 190 economies. Most indicator sets refer to a case scenario in the largest business city of each economy, except for 11 economies that
have a population of more than 100 million as of 2013 (Bangladesh, Brazil, China, India, Indonesia, Japan, Mexico, Nigeria, Pakistan, the
Russian Federation and the United States) where Doing Business, also collected data for the second largest business city. The data for these
11 economies are a population-weighted average for the 2 largest business cities. The project has benefited from feedback from
governments, academics, practitioners and reviewers. The initial goal remains: to provide an objective basis for understanding and improving
the regulatory environment for business around the world.
The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance
observed on each of the indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is
reflected on a scale from 0 to 100, where 0 represents the lowest performance and 100 represents the frontier. The ease of doing business
ranking ranges from 1 to 190. The ranking of 190 economies is determined by sorting the aggregate distance to frontier scores, rounded to
two decimals.
More about Doing Business (PDF, 5MB)
Page 3Doing Business 2018 Saudi Arabia
Ease of Doing Business in DB 2018 Rank
Region Middle East & North Africa
190 1
Saudi Arabia
Income Category High income 92
DB 2018 Distance to Frontier (DTF)
Population 32,275,687
0 100
City Covered Riyadh 62.50
DB 2018 Distance to Frontier (DTF)
0 100
78.73: United Arab Emirates (Rank: 21)
67.20: Oman (Rank: 71)
62.50: Saudi Arabia (Rank: 92)
60.58: Jordan (Rank: 103)
56.72: Regional Average (Middle East & North Africa)
56.22: Egypt, Arab Rep. (Rank: 128)
Note: The distance to frontier (DTF) measure shows the distance of each economy to the “frontier,” which represents the best performance observed on each of the
indicators across all economies in the Doing Business sample since 2005. An economy’s distance to frontier is reflected on a scale from 0 to 100, where 0 represents the
lowest performance and 100 represents the frontier. The ease of doing business ranking ranges from 1 to 190.
Rankings on Doing Business topics - Saudi Arabia
1 10
24
28 38
55 59
76
83
82 90
Rank
109
135
136
161
163 168
190
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Distance to Frontier (DTF) on Doing Business topics - Saudi Arabia
100
80.04 79.88 81.19
80 75.52 75.00 75.00
58.78
60
DTF
50.00 49.59
40
20
0.00
0
Starting Dealing Getting Registering Getting Protecting Paying Trading Enforcing Resolving
a with Electricity Property Credit Minority Taxes across Contracts Insolvency
Business Construction Investors Borders
Permits
Page 4Doing Business 2018 Saudi Arabia
Starting a Business
This topic measures the paid-in minimum capital requirement, number of procedures, time and cost for a small- to medium-sized limited
liability company to start up and formally operate in economy’s largest business city.
To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has
start-up capital equivalent to 10 times income per capita, engages in general industrial or commercial activities and employs between 10 and
50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of
local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5
married men. The distance to frontier score for each indicator is the average of the scores obtained for each of the component indicators.
The most recent round of data collection for the project was completed in June 2017. See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) business and the procedures are used. It is assumed that any required information is
readily available and that the entrepreneur will pay no bribes.
â— Submitting all relevant documents and obtaining
all necessary clearances, licenses, permits and
The business:
certificates
â— Submitting all required notifications and receiving - Is a limited liability company (or its legal equivalent). If there is more than one type
all necessary inspections of limited liability company in the economy, the most common among domestic firms
is chosen. Information on the most common form is obtained from incorporation
â— Obtaining utility connections for water and
lawyers or the statistical office.
sewerage
- Operates in the economy’s largest business city and the entire office space is
â— Registering and selling the warehouse after its approximately 929 square meters (10,000 square feet). For 11 economies the data
completion are also collected for the second largest business city.
- Is 100% domestically owned and has five owners, none of whom is a legal entity;
Time required to complete each procedure
and has a start-up capital of 10 times income per capita and has a turnover of at
(calendar days)
least 100 times income per capita.
â— Does not include time spent gathering information - Performs general industrial or commercial activities, such as the production or sale
â— Each procedure starts on a separate day (2 of goods or services to the public. The business does not perform foreign trade
procedures cannot start on the same day) activities and does not handle products subject to a special tax regime, for example,
liquor or tobacco. It does not use heavily polluting production processes.
â— Procedures fully completed online are recorded
- Leases the commercial plant or offices and is not a proprietor of real estate and the
as ½ day
amount of the annual lease for the office space is equivalent to 1 times income per
â— Procedure is considered completed once final capita.
document is received - Does not qualify for investment incentives or any special benefits.
â— No prior contact with officials - Has at least 10 and up to 50 employees one month after the commencement of
operations, all of whom are domestic nationals.
Cost required to complete each procedure (% of - Has a company deed 10 pages long.
income per capita)
The owners:
â— Official costs only, no bribes
â— No professional fees unless services required by - Have reached the legal age of majority. If there is no legal age of majority, they are
law or commonly used in practice assumed to be 30 years old.
- Are sane, competent, in good health and have no criminal record.
Paid-in minimum capital (% of income per capita - Are married and the marriage is monogamous and registered with the authorities.
â— Funds deposited in a bank or with third party - Where the answer differs according to the legal system applicable to the woman or
before registration or up to 3 months after man in question (as may be the case in economies where there is legal plurality), the
incorporation answer used will be the one that applies to the majority of the population.
Page 5Doing Business 2018 Saudi Arabia
Starting a Business - Saudi Arabia
Standardized Company
Legal form Limited Liability Company
Paid-in minimum capital requirement SAR 0
City Covered Riyadh
Indicator Saudi Arabia Middle East & OECD high Overall Best
North Africa income Performer
Procedure – Men (number) 10 7.7 4.9 1.00 (New Zealand)
Time – Men (days) 17 18.6 8.5 0.50 (New Zealand)
Cost – Men (% of income per capita) 6.8 18.7 3.1 0.00 (United Kingdom)
Procedure – Women (number) 12 8.4 4.9 1.00 (New Zealand)
Time – Women (days) 19 19.3 8.5 0.50 (New Zealand)
Cost – Women (% of income per capita) 6.8 18.7 3.1 0.00 (United Kingdom)
Paid-in min. capital (% of income per capita) 0.0 9.9 8.7 0.00 (113 Economies)
Figure – Starting a Business in Saudi Arabia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
92.85: Oman (Rank: 31)
91.16: United Arab Emirates (Rank: 51)
84.53: Egypt, Arab Rep. (Rank: 103)
84.40: Jordan (Rank: 105)
82.05: Regional Average (Middle East & North Africa)
80.04: Saudi Arabia (Rank: 135)
Note: The ranking of economies on the ease of starting a business is determined by sorting their distance to frontier scores for starting a
business. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 6Doing Business 2018 Saudi Arabia
Figure – Starting a Business in Saudi Arabia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
6
18
Cost (% of income per capita)
16 5
14
4
12
Time (days)
10
3
8
6 2
4
1
2
0 0
1 2 3 4 5 6 7 8 9 10 11 * 12
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 7Doing Business 2018 Saudi Arabia
Details – Starting a Business in Saudi Arabia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 APPLIES TO WOMEN ONLY: Obtain a stand alone ID card for a woman 1 day no charge
Agency : Home
When obtaining a stand alone ID, a Saudi woman has to be identified by one of her male
relatives like her father, brother, husband or son. This ID card is not just for opening a
business but for any activity a woman might have to do. For example, going to university,
staying alone at a hospital, etc.
2 APPLIES TO WOMEN ONLY: Obtain husband's permission to leave the 1 day no charge
house
Agency : Home
If a woman fails to obtain the permission/support of her husband in leaving the home (for
example, for entrepreneurial ventures) it is possible that she may suffer consequences
under the law; for example she may not be entitled to financial alimony as per Royal
Decree No. 53 of 2012, Art. 75
3 Reserve the company name and submit Articles of Association 5 days on average no charge
Agency : Unified Center (UC)/Companies Department
To initiate a company incorporation process, entrepreneurs or their third-party
representatives (commonly lawyers) need to go to https://com.er.sa and fill out the
necessary forms with information about the company. Through the same platform
entrepreneurs select a company name and submit Articles of Association. Within 5 days,
the Ministry of Commerce and Industry will complete the due diligence of all the
submitted documents. Once the due diligence process is completed an entrepreneur
receives an SMS stating that the Articles of Association are ready to be notarized. Also,
at the end of the registration the newly formed entry is assigned a company number.
4 Notarize the Articles of Association with the Notary Public 1 day no charge
Agency : First Notary Public
The notary public is located in the same building of the UC. After the articles of
association are submitted online to the Ministry of Commerce and Industry, it takes a few
days for MOCI to review electronically submitted AOA and for the person to come on-
site and get it stamped, as well as retrieve the letter of capital deposit from MOCI.
An appointment with the notary is then scheduled. The notary public reviews all the
documents to make sure that they are complete. Currently, the notary public reviews up to
15 companies per day. The notary’s office consists of about 5-6 employees.
5 Pay Company Registration Fees Less than one day SAR 1,200 for
Agency : Ministry of Commerce and Industry (online procedure) commercial
The fees are only paid after a notary signs the Articles of Association and a notary clerk registration + SAR
processes the information in the online system. Then, an entrepreneur or his 2,000 a fee to
representative receives an email and an SMS stating that the payment can now be made.
become member of
Most entrepreneurs make payments through SADAD (https://www.sadad.com/). All fees
Chamber of
are submitted at one.
Commerce + SAR
500 e-magazine
publication fee
6 Open an "under-formation" bank account 1 day no charge
Agency : Bank
The entrepreneur applies for opening an "under-formation" company bank account at a
bank of choice. After the certificate of registration is issued, the company founders go
back to the bank to unblock their capital deposit and activate their bank account.
7 Obtain a Business Location License from the Municipality 4 days SAR 1,000
Agency : Municipality of Riyadh
In order to obtain a business location license from the municipality an entrepreneur needs
to go to the Municipality and present the lease, commercial registration certificate as well
as a map indicating the exact location of the business. Then, the Municipality appoints an
investigator who goes and inspects the property and confirms the precise location.
Afterwards, the investigator submits the final report to the municipality and if everything
is in order, the Municipality issues a license and assigns to it a 10-digit identification
number.
8 Register with the Ministry of Labor 1 day no charge
Agency : Ministry of Labor
In order to register with the Ministry of Labor, the company must submit its certificate of
registration, articles of association, Chamber of Commerce attested signatories and the
business location license. Registration with the Ministry of Labor is needed to register
with the General Organization for Social Insurance. Registration can be made online or in
person. If the entrepreneur chooses to register online, they must then submit the original
documents in person as well.
Page 8Doing Business 2018 Saudi Arabia
9 Register with the Post Office “Wasel” Less than one day SAR 500
Agency : Post Office (online procedure)
Registering with the Post Office “Wasel” can be done in person, but a majority of
entrepreneurs prefer to compete the registration online through the following webportal:
https://balady.gov.sa. In order to complete the registration, an entrepreneur needs to create
an account, log in with the already existing information, such as geographic location,
address and zip code. Then, a payment is submitted through the same website. After
which, a registration certificate is issued electronically. A company must register with the
post office "Wasel" every year.
10 Make a company seal 1 day SAR 50
Agency : Seal maker
The seal must include the Certificate of Registration number and the name of the
company. It costs around SAR 40-50 to make. It is needed to attest signatories at the
Chamber of Commerce, register with the General Organization for Social Insurance and
for the companies’ invoices. It is commonly used in practice. The seal is always used on
the following documents:
1) Any contracts
2) Shareholder resolutions
3) Management resolutions
4) Official letters and notices
5) All Gvt agencies require documents to be put on official company letterheads and
stamped.
11 Register with the General Organization for Social Insurance (GOSI) 1 day no charge
Agency : General Organization for Social Insurance (GOSI)
To register for social security insurance, the employer must open a file with the General
Organization for Social Insurance (GOSI). This procedure can be done online as follows:
The employer visits GOSI’s website, completes an application and provides the
company's Ministry of Labor number. The application must be stamped with a company
seal. In addition, the location of the entity (business location license) and the designation
of the authorized person to represent the company before GOSI must be included.
The number that GOSI gives the employer is different from his/her Ministry of Labor
number. The employer enters username and password and registers the employees with
their IDs, wages, occupation, nationality, date of commencement and location.
Register with the Department of Zakat 3 days no charge
12 Agency : Zakat
Zakat, a religious wealth tax, is assessed based on taxable income and certain assets. To
register with DZIT, the employer will visit DZIT's website and complete an online
application, attaching the Certificate of Registration and the details of the authorized
person/signatory of the company. Then, the employer receives a unique ID number which
is different from the Company ID number. The Certificate of Zakat will be issued and
sent by mail and email within 2-3 days. This certificate is needed for the company to
participate in tender offers and government contracts, among others.
Applies to women only.
Takes place simultaneously with previous procedure.
Page 9Doing Business 2018 Saudi Arabia
Dealing with Construction Permits
This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all
required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with
Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of
quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of
data collection was completed in June 2017. See the methodology for more information
What the indicators measure Case study assumptions
Procedures to legally build a warehouse To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
â— Submitting all relevant documents and obtaining
The construction company (BuildCo):
all necessary clearances, licenses, permits and
certificates - Is a limited liability company (or its legal equivalent) and operates in the economy’s
â— Submitting all required notifications and receiving largest business city. For 11 economies the data are also collected for the second
all necessary inspections largest business city.
- Is 100% domestically and privately owned; has five owners, none of whom is a
â— Obtaining utility connections for water and
legal entity. Has a licensed architect and a licensed engineer, both registered with
sewerage
the local association of architects or engineers. BuildCo is not assumed to have any
â— Registering and selling the warehouse after its other employees who are technical or licensed experts, such as geological or
completion topographical experts.
- Owns the land on which the warehouse will be built and will sell the warehouse
Time required to complete each procedure
upon its completion.
(calendar days)
â— Does not include time spent gathering information The warehouse:
â— Each procedure starts on a separate day— - Will be used for general storage activities, such as storage of books or stationery.
though procedures that can be fully completed - Will have two stories, both above ground, with a total constructed area of
online are an exception to this rule approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
â— Procedure is considered completed once final meters (9 feet, 10 inches) high and will be located on a land plot of approximately
document is received 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
warehouse is valued at 50 times income per capita.
â— No prior contact with officials
- Will have complete architectural and technical plans prepared by a licensed
Cost required to complete each procedure (% of architect. If preparation of the plans requires such steps as obtaining further
income per capita) documentation or getting prior approvals from external agencies, these are counted
as procedures.
â— Official costs only, no bribes
- Will take 30 weeks to construct (excluding all delays due to administrative and
regulatory requirements).
Building quality control index (0-15)
â— Sum of the scores of six component indices: The water and sewerage connections:
â— Quality of building regulations (0-2) - Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â— Quality control before construction (0-1) is no water delivery infrastructure in the economy, a borehole will be dug. If there is
no sewerage infrastructure, a septic tank in the smallest size available will be
â— Quality control during construction (0-3)
installed or built.
â— Quality control after construction (0-3) - Will have an average water use of 662 liters (175 gallons) a day and an average
â— Liability and insurance regimes (0-2) wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â— Professional certifications (0-4) 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
the sewerage connection.
Page 10Doing Business 2018 Saudi Arabia
Dealing with Construction Permits - Saudi Arabia
Standardized Company
Estimated value of warehouse SAR 3,846,610.70
City Covered Riyadh
Indicator Saudi Arabia Middle East & OECD high Overall Best
North Africa income Performer
Procedures (number) 17 16.2 12.5 7.00 (Denmark)
Time (days) 89.5 132.1 154.6 27.5 (Korea, Rep.)
Cost (% of warehouse value) 2.3 4.3 1.6 0.10 (5 Economies)
Building quality control index (0-15) 12.0 11.8 11.4 15.00 (3 Economies)
Figure – Dealing with Construction Permits in Saudi Arabia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
86.38: United Arab Emirates (Rank: 2)
75.52: Saudi Arabia (Rank: 38)
72.15: Oman (Rank: 60)
71.43: Egypt, Arab Rep. (Rank: 66)
65.74: Jordan (Rank: 110)
59.84: Regional Average (Middle East & North Africa)
Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their distance to frontier scores for
dealing with construction permits. These scores are the simple average of the distance to frontier scores for each of the component
indicators.
Figure – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1.6
80 1.4
Cost (% of income per capita)
70
1.2
60
Time (days)
1
50
0.8
40
0.6
30
0.4
20
10 0.2
0 0
1 *2 *3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 11Doing Business 2018 Saudi Arabia
Figure – Dealing with Construction Permits in Saudi Arabia and comparator economies – Measure of Quality
15.0
15 14.0
12.0 11.8
11.0 11.0
Index score
10
5
0
Saudi Arabia Egypt, Arab Rep. Jordan Oman United Arab Emirates Middle East & North Africa
Details – Dealing with Construction Permits in Saudi Arabia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Obtain a geotechnical study / soil test 7 days SAR 4,000
Agency : Private firms
BuildCo will request a soil test for the structural calculations for the foundation.
2 Obtain surveyor's report from Riyadh Municipality 3 days no charge
Agency : Riyadh Municipality
BuildCo must obtain a surveyor's report from the Municipality prior to requesting the
building permit. The report outlines whether the intended project can be built on the
particular location. It also indicates the boundaries, leveling and area of the land. This
report is needed for the consultant to prepare the drawings.
3 Obtain a topographical study of the land 2 days SAR 1,500
Agency : Private firms
4 Apply for building approval and request inspection 7 days SAR 7,804
Agency : Riyadh Municipality
BuildCo submits the application file with all the supporting documentation through the
online portal located on the Riyadh Municipality website
(http://eservices.alriyadh.gov.sa).
Documents include:
• A cover page
• Legal documentation from the owner of the land (in this case BuildCo), and the design
engineer (in this case, an employee of BuildCo)
• A copy of the applicant’s identity card
• Surveyor's report from the branch municipality
• Draft of the building permit, which has been prepared in advance by BuildCo and
contains full information including the instrument number, street name, the name of the
neighborhood, rebounds and components of construction and the amount of construction
drawings and number and the date of receipt of payment, and the general location of all
data set forth in the license
• Building plans drawn to a 50/1 scale with all the annexes
• Two copies of the final plans on A3 paper for Municipal record and a CD containing the
complete project information
Incomplete files will not be accepted for further processing. Once all documents are
submitted, the system will generate the permit fees, which can also be paid online
through the Sadad Payment System. After this, BuildCo's engineer must be physically
present to submit hard copies of all the plans and sign a sworn affidavit of responsibility
before picking up the temporary permit.
5 Receive inspection from Riyadh Municipality 1 day no charge
Agency : Riyadh Municipality
The Municipality physically inspects the premise to ensure that it matches the drawings.
The customer must be physically present at the inspection.
6 Hire independent authorized engineer 1 day SAR 52,024
Agency : Private Company
The building standards set forth in the surveyor's report are given to the engineering firm
in order for the firm to begin drawing the building plans.
7 Apply for a civil defense approval from the Department of Civil Defense 7 days no charge
Agency : Civil Defense
Municipality will only issue a building permit after obtaining the approval document
from the Civil Defense Department. The document should be presented in paper and in
original. The Civil Defense needs to confirm that the design is done in compliance with
all the safety standards. If everything is in compliance with the existing standards, the
department of Civil Defense issues a non-objection certificate. The initial application can
be submitted online but an in-person visit is necessary to present all the original
documents and to pick-up the actual approval. The building firm needs to submit fire and
safety drawings as well as hydraulic calculations.
Page 12Doing Business 2018 Saudi Arabia
8 Obtain building permit 12 days SAR 7,804
Agency : Riyadh Municipality
BuildCo needs to fill out and attach all the required documentation through the
Municipality’s website:
http://eservices.alriyadh.gov.sa
However, original drawings and copies of all the documents (originals as well) need to be
presented in person. Examples of documents include land deed, land surveys, owners’
identity cards. During the in-person visit municipal clerks scan in all the documents for
archiving purposes. Once all the documents are presented, the Municipality initiates the
review process. The review process for small scale projects lasts 2-3 days. For big
buildings, such as sky scrapers, the review process is at least one week.
9 Receive inspection during construction 1 day no charge
Agency : Riyadh Municipality
The customer notifies the Branch Municipality in person that construction has begun and
the site is ready for inspection. Once the site has been inspected, the Municipality will
proceed with random inspections. However, the Municipality will likely only inspect
once since the supervising engineer is responsible for supervising the construction
throughout the project.
10 Request certificate of completion from the Riyadh Municipality 0.5 days no charge
Agency : Riyadh Municipality
The customer notifies the Branch Municipality electronically that construction has been
completed and the site is ready for inspection. Upon completion, the branch municipality
inspects the site to ensure that all work has been performed as stated in the building
permit.
As of February 2017, once the certificate of completion is issued, this information is
automatically sent to Sewage, Water, Power and Civil Defense.
11 Receive final inspection to issue certificate of completion 1 day no charge
Agency : Riyadh Municipality
Municipality appoints an inspector and this inspector comes to check that all the set backs
are in order. Inspectors also check the height of all floors and all the other standard
building parameters. Everything has to be built in accordance with previously submitted
plans. Inspectors also take multiple pictures of the constructed object for reporting and
filing purposes.
The final inspection report can be obtained electronically through the Municipality’s
website.
12 Obtain certificate of completion from the Riyadh Municipality 7 days no charge
Agency : Riyadh Municipality
13 Request letter of approval from Civil Defense 1 day no charge
Agency : Civil Defense
BuildCo must visit the Civil Defense agency in person to request the letter of approval.
The Civil Defense must then visit the site to approve that the warehouse is safe for
commercial use.
14 Receive final inspection by Civil Defense 1 day no charge
Agency : Civil Defense
15 Obtain letter of approval from Civil Defense 12 days no charge
Agency : Civil Defense
If the completed building complies with all the fire safety regulations, the Civil Defense
issues a letter of approval.
16 Obtain water and sewage connection 30 days SAR 16,250
Agency : National Water Company
17 Obtain occupancy certificate 1 day no charge
Agency : Riyadh Municipality
The occupancy certificate needs to be collected in person from the Municipality.
Takes place simultaneously with previous procedure.
Page 13Doing Business 2018 Saudi Arabia
Details – Dealing with Construction Permits in Saudi Arabia – Measure of Quality
Answer Score
Building quality control index (0-15) 12.0
Quality of building regulations index (0-2) 2.0
How accessible are building laws and regulations in your economy? (0-1) Available online; 1.0
Free of charge.
Which requirements for obtaining a building permit are clearly specified in the building List of required 1.0
regulations or on any accessible website, brochure or pamphlet? (0-1) documents; Fees
to be paid;
Required
preapprovals.
Quality control before construction index (0-1) 1.0
Which third-party entities are required by law to verify that the building plans are in Licensed 1.0
compliance with existing building regulations? (0-1) architect;
Licensed
engineer.
Quality control during construction index (0-3) 2.0
What types of inspections (if any) are required by law to be carried out during construction? Inspections by in- 1.0
(0-2) house engineer;
Unscheduled
inspections;
Inspections at
various phases.
Do legally mandated inspections occur in practice during construction? (0-1) Mandatory 1.0
inspections are
always done in
practice.
Quality control after construction index (0-3) 3.0
Is there a final inspection required by law to verify that the building was built in accordance Yes, final 2.0
with the approved plans and regulations? (0-2) inspection is
done by
government
agency.
Do legally mandated final inspections occur in practice? (0-1) Final inspection 1.0
always occurs in
practice.
Liability and insurance regimes index (0-2) 0.0
Which parties (if any) are held liable by law for structural flaws or problems in the building No party is held 0.0
once it is in use (Latent Defect Liability or Decennial Liability)? (0-1) liable under the
law.
Which parties (if any) are required by law to obtain an insurance policy to cover possible No party is 0.0
structural flaws or problems in the building once it is in use (Latent Defect Liability Insurance required by law
or Decennial Insurance)? (0-1) to obtain
insurance .
Professional certifications index (0-4) 4.0
What are the qualification requirements for the professional responsible for verifying that the Minimum number 2.0
architectural plans or drawings are in compliance with existing building regulations? (0-2) of years of
experience;
University degree
in architecture or
engineering;
Being a
registered
architect or
engineer;
Passing a
certification
exam.
Page 14Doing Business 2018 Saudi Arabia
What are the qualification requirements for the professional who supervises the construction Minimum number 2.0
on the ground? (0-2) of years of
experience;
University degree
in engineering,
construction or
construction
management;
Being a
registered
architect or
engineer.
Page 15Doing Business 2018 Saudi Arabia
Getting Electricity
This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly
constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of
tariffs and the price of electricity. The most recent round of data collection for the project was completed in June 2017. See the methodology
for more information.
What the indicators measure Case study assumptions
Procedures to obtain an electricity connection To make the data comparable across economies, several assumptions about the
(number) construction company, the warehouse project and the utility connections are used.
â— Submitting all relevant documents and obtaining
The construction company (BuildCo):
all necessary clearances and permits
â— Completing all required notifications and - Is a limited liability company (or its legal equivalent) and operates in the economy’s
receiving all necessary inspections largest business city. For 11 economies the data are also collected for the second
largest business city.
â— Obtaining external installation works and possibly
- Is 100% domestically and privately owned; has five owners, none of whom is a
purchasing material for these works
legal entity. Has a licensed architect and a licensed engineer, both registered with
â— Concluding any necessary supply contract and the local association of architects or engineers. BuildCo is not assumed to have any
obtaining final supply other employees who are technical or licensed experts, such as geological or
topographical experts.
Time required to complete each procedure
- Owns the land on which the warehouse will be built and will sell the warehouse
(calendar days)
upon its completion.
â— Is at least 1 calendar day
The warehouse:
â— Each procedure starts on a separate day
â— Does not include time spent gathering information - Will be used for general storage activities, such as storage of books or stationery.
- Will have two stories, both above ground, with a total constructed area of
â— Reflects the time spent in practice, with little
approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3
follow-up and no prior contact with officials
meters (9 feet, 10 inches) high and will be located on a land plot of approximately
Cost required to complete each procedure (% of 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the
warehouse is valued at 50 times income per capita.
income per capita)
- Will have complete architectural and technical plans prepared by a licensed
â— Official costs only, no bribes architect. If preparation of the plans requires such steps as obtaining further
â— Value added tax excluded documentation or getting prior approvals from external agencies, these are counted
as procedures.
The reliability of supply and transparency of - Will take 30 weeks to construct (excluding all delays due to administrative and
tariffs index (0-8) regulatory requirements).
â— Duration and frequency of power outages (0–3)
The water and sewerage connections:
â— Tools to monitor power outages (0–1)
- Will be 150 meters (492 feet) from the existing water source and sewer tap. If there
â— Tools to restore power supply (0–1)
is no water delivery infrastructure in the economy, a borehole will be dug. If there is
â— Regulatory monitoring of utilities’ performance no sewerage infrastructure, a septic tank in the smallest size available will be
(0–1) installed or built.
â— Financial deterrents limiting outages (0–1) - Will have an average water use of 662 liters (175 gallons) a day and an average
wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of
â— Transparency and accessibility of tariffs (0–1)
1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300
Price of electricity (cents per kilowatt-hour)* gallons) a day.
- Will have a constant level of water demand and wastewater flow throughout the
â— Price based on monthly bill for commercial
year; will be 1 inch in diameter for the water connection and 4 inches in diameter for
warehouse in case study
the sewerage connection.
*Note: Doing Business measures the price of
electricity, but it is not included in the distance to
frontier score nor the ranking on the ease of getting
electricity.
Page 16Doing Business 2018 Saudi Arabia
Getting Electricity - Saudi Arabia
Standardized Company
Price of electricity (US cents per kWh) 8.5
Name of utility Saudi Electricity Company (SEC)
City Covered Riyadh
Indicator Saudi Arabia Middle East & OECD high Overall Best
North Africa income Performer
Procedures (number) 5 4.8 4.7 2 (United Arab
Emirates)
Time (days) 68 81.4 79.1 10 (United Arab
Emirates)
Cost (% of income per capita) 32.1 780.3 63.0 0.00 (Japan)
Reliability of supply and transparency of tariff 6 4.2 7.4 8.00 (28 Economies)
index (0-8)
Figure – Getting Electricity in Saudi Arabia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
99.92: United Arab Emirates (Rank: 1)
83.33: Jordan (Rank: 40)
79.88: Saudi Arabia (Rank: 59)
79.35: Oman (Rank: 61)
71.24: Egypt, Arab Rep. (Rank: 89)
67.21: Regional Average (Middle East & North Africa)
Note: The ranking of economies on the ease of getting electricity is determined by sorting their distance to frontier scores for getting
electricity. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Page 17Doing Business 2018 Saudi Arabia
Figure – Getting Electricity in Saudi Arabia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
35
60
30
Cost (% of income per capita)
50
25
Time (days)
40 20
30 15
20 10
10 5
0 0
1 *2 3 4 5
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Figure – Getting Electricity in Saudi Arabia and comparator economies – Measure of Quality
8
8
7 7
7
6
6
Index score
5
4.2
4
3
3
2
1
0
Saudi Arabia Egypt, Arab Rep. Jordan Oman United Arab Emirates Middle East & North Africa
Page 18Doing Business 2018 Saudi Arabia
Details – Getting Electricity in Saudi Arabia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 Submit application to utility and await estimate 14 calendar days SAR 0
Agency : Saudi Electricity Company (SEC)
The online application system is now operational in Riyadh. The connection fees can also
be paid online through the SADAD system.
The documents required are commercial license, industrial license, and building permit.
SEC receives subscribers' applications in principle after obtaining a building license and
starting construction. The subscriber can file an application by phone, fax or online
(SADAD system) where the SEC informs customer on the requirement. The locations
specified for the stations and electric meters will be checked and confirmed by utility and
then an estimate is delivered.
2 Obtain external inspection by utility 4 calendar days SAR 0
Agency : Saudi Electricity Company (SEC)
The utility conducts a site inspection to determine the details of the connection and
prepare an estimate of the connection fees. The inspection is generally scheduled within 1
week. There are 5 SEC offices in Riyadh. Each office is divided into 5 zones. The
surveyor visits each zone 1-2 times per week.
The utility will then prepare an estimate of the connection fees. SEC sends a text to the
customer saying the file is ready for payment. The customer goes to the bank and pays
the fees or he can pay online via the SADAT system.
No inspection of the entire internal wiring, however, is carried out during the process.
Upon the completion of the inspection, the customer receives an inspection report, which
needs to be picked up in-person.
3 Obtain external works from utility 40 calendar days SAR 24,500
Agency : Saudi Electricity Company (SEC)
The external works consist of laying out cables from the warehouse to the closest supply
on the LV network. The material is all provided by the utility.
If the building is located within grid coverage or at a distance less than 1,000 meters
outside of coverage the client pays only the connection fees and does not pay for the
actual works.
Connection fees were increased, as part of a recent change in low-voltage standards from
127/220 V to 230/400 V. As such, a new "administrative decision" ruled that connection
fees be changed in January 2012 from fixed per range of capacities to a fee per kVA
specified by capacity range. The decision was issued by the Saudi Arabia Electricity and
Cogeneration Regulatory Authority based on article (9) of the electricity regulations, as
well as Ministerial decisions 169 and 324.
4 Obtain meter installation from the utility 7 calendar days SAR 203.24
Agency : Saudi Electricity Company (SEC)
The client needs to submit a separate application for meter installation and final supply.
5 Obtain Electricity Release Certificate 7 calendar days SAR 0
Agency : Municipality
The Municipality reviews the Certificate of Completion from the Department of Civil
Defense (obtained during the Dealing with Construction Permit indicator).
The Municipality also requires a document from SEC proving that the wiring and
installation follows the electricity regulations (received in the Procedure 2 from Utility as
a result of inspection) to issue the the Certificate. The municipality authorizes the release
of electricity, and the warehouse is energized.
Takes place simultaneously with previous procedure.
Page 19Doing Business 2018 Saudi Arabia
Details – Getting Electricity in Saudi Arabia – Measure of Quality
Answer
Reliability of supply and transparency of tariff index (0-8) 6
Total duration and frequency of outages per customer a year (0-3) 2
System average interruption duration index (SAIDI) 1.9
System average interruption frequency index (SAIFI) 1.2
What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 5.0
Mechanisms for monitoring outages (0-1) 1
Does the distribution utility use automated tools to monitor outages? Yes
Mechanisms for restoring service (0-1) 1
Does the distribution utility use automated tools to restore service? Yes
Regulatory monitoring (0-1) 1
Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of Yes
supply?
Financial deterrents aimed at limiting outages (0-1) 0
Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages No
exceed a certain cap?
Communication of tariffs and tariff changes (0-1) 1
Are effective tariffs available online? Yes
Link to the website, if available online https://www.se.com.s
a/en-
us/Customers/Pages
/TariffRates.aspx
Are customers notified of a change in tariff ahead of the billing cycle? Yes
Note:
If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff
index.
If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.
If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.
Page 20Doing Business 2018 Saudi Arabia
Registering Property
This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to
purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land
administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency
of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for
the project was completed in June 2017.See the methodology for more information.
What the indicators measure Case study assumptions
Procedures to legally transfer title on To make the data comparable across economies, several assumptions about the
immovable property (number) parties to the transaction, the property and the procedures are used.
â— Preregistration procedures (for example,
The parties (buyer and seller):
checking for liens, notarizing sales agreement,
paying property transfer taxes) - Are limited liability companies (or the legal equivalent).
â— Registration procedures in the economy's largest - Are located in the periurban area of the economy’s largest business city. For 11
business citya. economies the data are also collected for the second largest business city.
- Are 100% domestically and privately owned.
â— Postregistration procedures (for example, filling
- Have 50 employees each, all of whom are nationals.
title with municipality)
- Perform general commercial activities.
Time required to complete each procedure
The property (fully owned by the seller):
(calendar days)
- Has a value of 50 times income per capita, which equals the sale price.
â— Does not include time spent gathering information
- Is fully owned by the seller.
â— Each procedure starts on a separate day - though - Has no mortgages attached and has been under the same ownership for the past
procedures that can be fully completed online are 10 years.
an exception to this rule
- Is registered in the land registry or cadastre, or both, and is free of title disputes.
â— Procedure is considered completed once final - Is located in a periurban commercial zone, and no rezoning is required.
document is received - Consists of land and a building. The land area is 557.4 square meters (6,000
â— No prior contact with officials square feet). A two-story warehouse of 929 square meters (10,000 square feet) is
located on the land. The warehouse is 10 years old, is in good condition, has no
Cost required to complete each procedure (% of heating system and complies with all safety standards, building codes and legal
property value) requirements. The property, consisting of land and building, will be transferred in its
â— Official costs only (such as administrative fees, entirety.
duties and taxes). - Will not be subject to renovations or additional construction following the purchase.
- Has no trees, natural water sources, natural reserves or historical monuments of
â— Value Added Tax, Capital Gains Tax and illicit
any kind.
payments are excluded
- Will not be used for special purposes, and no special permits, such as for
Quality of land administration index (0-30) residential use, industrial plants, waste storage or certain types of agricultural
activities, are required.
â— Reliability of infrastructure index (0-8) - Has no occupants, and no other party holds a legal interest in it.
â— Transparency of information index (0–6)
â— Geographic coverage index (0–8)
â— Land dispute resolution index (0–8)
â— Equal access to property rights index (-2–0)
Page 21Doing Business 2018 Saudi Arabia
Registering Property - Saudi Arabia
Standardized Company
Property value SAR 3,846,610.70
City Covered Riyadh
Indicator Saudi Arabia Middle East & OECD high Overall Best
North Africa income Performer
Procedures (number) 2 5.7 4.6 1.00 (4 Economies)
Time (days) 1.5 30.3 22.3 1.00 (3 Economies)
Cost (% of property value) 0.0 6.0 4.2 0.00 (5 Economies)
Quality of the land administration index (0-30) 10.0 13.4 22.7 29.00 (Singapore)
Figure – Registering Property in Saudi Arabia and comparator economies – Ranking and DTF
DB 2018 Distance to Frontier (DTF)
0 100
90.02: United Arab Emirates (Rank: 10)
81.19: Saudi Arabia (Rank: 24)
73.62: Oman (Rank: 54)
66.40: Jordan (Rank: 72)
60.91: Regional Average (Middle East & North Africa)
55.50: Egypt, Arab Rep. (Rank: 119)
Note: The ranking of economies on the ease of registering property is determined by sorting their distance to frontier scores for registering
property. These scores are the simple average of the distance to frontier scores for each of the component indicators.
Figure – Registering Property in Saudi Arabia – Procedure, Time and Cost
Time (days) Cost (% of income per capita)
1.2
1.4
1 Cost (% of income per capita)
1.2
1 0.8
Time (days)
0.8
0.6
0.6
0.4
0.4
0.2
0.2
0 0
1 2
Procedures (number)
* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.
Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and
women, the graph shows the time for women. For more information on methodology, see the Doing Business website
(http://doingbusiness.org/en/methodology ). For details on the procedures reflected here, see the summary below.
Page 22Doing Business 2018 Saudi Arabia
Figure – Registering Property in Saudi Arabia and comparator economies – Measure of Quality
30
25 22.5
21.0
Index score
20
15 13.0 13.4
10.0
10
7.0
5
0
Saudi Arabia Egypt, Arab Rep. Jordan Oman United Arab Emirates Middle East & North Africa
Details – Registering Property in Saudi Arabia – Procedure, Time and Cost
No. Procedures Time to Complete Associated Costs
1 The buyer conducts a title search on the property Less than a day no cost
Agency : First Notary Public Department (online procedure)
The procedure is conducted by the buyer to verify that (i) the details in the deed provided
by the seller match those in the records of the agency; (ii) to get an official detailed
description of the property and (iii) check if any encumbrances are registered on the
property. In order to have access to the information, the buyer needs to be authorized by
the seller.
Since April 2017, it is possible to access all this information online through the website
of the Ministry of Justice. The buyer would obtain a printout with the assigned deed
number, which is validated electronically through an official digital stamp.
2 Notary drafts the deed and parties sign before the notary 1 day no cost
Agency : First Notary Public Department
Customers first check in the front desk and are given a room number where the transfer
will happen. The customer proceeds to the Notary’s office (after having waited a bit in
the assistant’s room). Notary clerks will retrieve all the necessary documents and checks
them. Then the clerk will input manually all the relevant information in the electronic
Notary system which is linked with the Ministry of Justice’s online portal. and approves
the transaction and the change of name. Then the parties meet with the Notary to sign the
deed. Both parties or their representatives need to be present for the transfer to take place.
The check is handed to the Seller by the Buyer and a new deed is issued: One copy is
given to the buyer, with the Notary’s signature; the other one is archived with the parties’
signatures.
Takes place simultaneously with previous procedure.
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