A seven-fold hike in visa fees to do business in Saudi Arabia risks deterring the foreign investment needed to transform its oil-dependent economy, diplomats and other sources say.
But a senior Saudi business leader has dismissed such concerns, insisting the country's most sought-after business partners could easily afford the new charges.
"It's incredibly short-sighted," a Riyadh-based diplomat said of the changes which took effect this month.
"They're obviously bleeding and they want to put the cost on foreigners as much as they can," he said, asking for anonymity. "It'll end up costing them a lot more than what they gain in visa payments."
Higher visa fees are one of many moves adopted by the kingdom to cover a loss in oil revenue which has slumped by 68 per cent over the past five years, according to official data cited by Bloomberg News.
But the higher cost of entry permits has left people "scratching their heads", a second diplomat said.
"We are expecting to see business reconsider Saudi as a market," said the Western envoy. "It's certainly happening already," though not in a major way.
Starting in October, a six-month business or work-visit visa allowing multiple entries costs 3,000 riyals ($800), compared with 400 riyals before, said Ala Siyam, general manager of Gulf Consulting House.
The consultancy, in Khobar on the Gulf coast, assists clients from more than 40 countries in securing visas to Saudi Arabia, which requires all foreigners to have a local sponsor, whether to visit on holiday or business.
Siyam told AFP the changes do not apply to the European Union or United States, while fees for British nationals have only slightly increased.
Most other countries face the higher charges but also have a new option of applying for one or two-year visas. Those cost 5,000 riyals and 8,000 riyals each.
Single-entry business visas are now priced at 2,000 riyals, several times higher than before.
An oil industry source called the new tariffs "crazy" and a "complete mistake" if Saudi Arabia was seeking foreign partnerships.
Since 2014, global oil prices have collapsed by about half, accelerating Saudi efforts to move away from petroleum which still accounts for the bulk of government income.
In April, Deputy Crown Prince Mohammed bin Salman, 31, announced a "Vision 2030" reform programme to transform the world's biggest oil exporter into a private-sector powerhouse with diverse industrial interests and major international investments.
Looking elsewhere
To promote job creation among Saudis and boost exports, Vision 2030 aims to foster small and medium-sized enterprises (SMEs) partly through "international partnerships".
"This will be achieved by attracting both regional and international retail investors", the Vision says.
But higher visa fees will be a "particular disincentive for SMEs", including those wanting to assess the market or meet potential partners, the first diplomat said.
He and the Western diplomat agreed that foreign companies will now be more likely to consider doing business, and even meeting, elsewhere.
Abdulrahman al-Zamil, former chairman of the Council of Saudi Chambers, says the impact of the hike in visa fees is being exaggerated.
"Most of those who are interested in our market.. can afford it. These are giant companies," said the head of Zamil Group, which employs 21,000 people in a range of sectors including steel fabrication and shipbuilding.
"The Saudi market is not really attractive to small and medium" enterprises from abroad, Zamil added.
Siyam, whose company secured about 5,000 visas last year, predicted a small fall in the number of business visitors, with only non-essential staff left out of delegations.
"This country, it's a very important country, so I think those who want to come, they will still come," he said.
AFP
Fri Oct 21 2016
Higher visa fees are one of many moves adopted by the kingdom to cover a loss in oil revenue which has slumped by 68 per cent over the past five years,
Who is Prabowo Subianto, incoming president of Indonesia?
A wealthy ex-general with ties to Indonesia's popular outgoing president and its dictatorial past, looks set to be its next leader.
Iran's supreme leader says Hamas leader's death will not halt 'Axis of Resistance'
The "Axis of Resistance", built up with years of Iranian support, includes Hamas, the Lebanese Hezbollah group, the Houthi movement in Yemen, and various Shi'ite groups in Iraq and Syria.
Putin says Russia willing to seek compromises between Iran and Israel
Russia is ready to help seek compromises between arch-foes Israel and Iran, President Vladimir Putin said on Friday, saying these would be difficult but possible.
What proposals will Russia push at the BRICS summit?
The proposal is also to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members.
Indonesia's free meals plan in the spotlight as Prabowo readies for office
Prabowo calls the programme one of the main drivers of economic growth, eventually set to add an estimated 2.5 million jobs.
Astro AWANI's revamped English news website, AWANI International, launches on Oct 21
Astro AWANI's revamped English platform delivers in-depth global news and expert analysis to keep you informed on key developments.
Israeli strikes kill 33 people in Jabalia refugee camp in Gaza, medics say
Residents of Jabalia said Israeli tanks had reached the heart of the camp after pushing through suburbs and residential districts.
Liam Payne's ex-partner calls for media restraint after 'painful' death
Cheryl Tweedy used her statement to urge the media to remember they had a seven-year-old son, Bear, who could read the reports.
Analysts: Indonesia's strong MoF leadership team to boost investor confidence
Sri Mulyani Indrawati as head of Indonesia's Ministry of Finance is expected to instil confidence among investors.
Biden offers both a carrot and a stick to Israel as his term nears an end
Israel has frequently resisted US advice and has caused political difficulties for the Biden administration.
Putin says BRICS will generate most of global economic growth
Russian President Vladimir Putin will host a summit of the group in the city of Kazan on Oct. 22-24.
ISIS Malaysia's perspective of Budget 2025
An excellent rakyat-centric budget under the overarching principle of a caring and humane economy.
Budget 2025: Record increase in STR, SARA aid initiatives
The government will provide a significant boost to the Sumbangan Tunai Rahmah (STR) and Sumbangan Asas Rahmah (SARA) initiatives next year.
Budget 2025: EPF contributions to be made mandatory for foreign workers – PM Anwar
The government plans to make it compulsory for all non-citizen workers to contribute to the Employees Provident Fund (EPF).
What policies to expect from Indonesia's new President Prabowo
Prabowo will be open to foreign investment, his aide has said, such as by offering investors management of airports and sea ports.
Budget 2025: Govt allocates RM470 mil to empower women's participation in PMKS
The Women's Leadership Apprenticeship Program will be intensified as an effort to produce more female corporate personalities.
Israel sends more troops into north Gaza, deepens raid
Residents of Jabalia in northern Gaza said Israeli tanks had reached the heart of the camp, using heavy air and ground fire.
Indonesia ramps up security ahead of Prabowo's inauguration
Prabowo Subianto will be sworn in as Indonesia's president on Sunday with Vice President-elect, Gibran Rakabuming Raka, also taking office.
Immediate allocation of RM150 mil for local authorities, DID to tackle flash floods
Datuk Seri Anwar Ibrahim said this allocation is intended to address the recent flash floods that hit the capital and several major towns.
Budget 2025: Sabah, Sarawak to continue receiving among highest allocations - PM
Sabah and Sarawak continues to be prioritised under Budget 2025, with allocations of RM6.7 billion and RM5.9 billion respectively.