Saudi Arabia approves rules for operating Duty Free markets


Saudi finance minister Mohammed Al-Jadaan has formalised rules regarding the expansion of Duty Free shopping at ports of entry.

Conditions, controls and procedures related to the acquisition of operating licences and other requirements were published in the state’s official gazette Umm Al-Qura on Friday.

According to the report, the kingdom has given green light duty free zones at airport arrival zones, seaports and land border crossings.

In a ministerial resolution seen by TRBusiness, the new rules allow (subject to restrictions)imports to and exports from duty free markets of any foreign goods exempt from customs duties. The exception concerns goods that violate the regulations related to the protection of commercial, industrial, literary and artistic property rights, goods that originate in a country that has been under economic sanctions, and goods that are prohibited in the country.

The rules specify the particulars for storing goods in customs warehouses and necessary shop controls, including sales and inventory management, information storage and mandatory reporting protocols to Zakat, Tax and Customs Authority.

Duty-free shops can operate round the clock.

An application to obtain a licence for Duty Free must be made through the authority’s official channels and should contain all the relevant documentation.

The rules come into effect 30 days past their publication in the Saudi official gazette following a decision by the Minister of Finance His Excellence Mohammed bin Abdullah Al-Jadaan.

“Free market locations and their establishment free markets may be established at the air, sea and land ports, and sales are permitted in them for travellers arriving and departing from the Kingdom,” the resolution noted.

An industry source in Saudi Arabia told TRBusiness: “The confirmation of the regulations completes the circle. However, the implementing regulations for arrivals and borders have not yet been released so the operation of arrivals duty free shops cannot yet be applied.

“It is expected that these regulations will be released during Q1 and that will then give clarity for how the operations will have to be managed, and what can be sold and any tax implications (e.g VAT) that may apply.

“The developments will be welcome news to the KSA’s high-growth duty free and travel retail sector.

“There is no doubt that the Saudi duty free market is one that will grow dramatically in the coming years and as a consequence, attract significant international interest. The addition of arrivals and borders will increase the size of the pie and make the economy more compelling. This in turn will draw more operators seeking to benefit and create a more dynamic environment which can only be a good thing.”