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Stock Market Investment Overview

Income tax rates apply only to non-residents. The corporate income tax on foreign corporations is
assessed on a progressive rate ranging from 25 percent to 45 percent. Rates are lower if profits are less
than SR one million.

Saudi citizens, as well as residents of Gulf Cooperation Council (GCC) countries are subject to a reli-
gious levy, called a zakat, imposed on property and income, at a rate of 2.5 percent.

In cases of companies owned by both Saudi and non-Saudi interests, the portion of taxable income
attributable to the non-Saudi interest is subject to income tax, while the Saudi share is subject to the
zakat.

Capital gains on assets in Saudi Arabia are taxed as part of the normal profits, and there are no special
tax rates applied to capital gains. There is no value-added tax system in Saudi Arabia and there are no
formal withholding taxes either.

Tax incentives include five to ten year tax holidays for projects approved by the Foreign Capital
Investment Committee, in cases where there is at least 25 percent Saudi participation. There are also
exemptions from customs duties on materials and equipment required for approved projects. In addi-
tion, there are tariff protections for local products.

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Stock Market

The Saudi Stock Exchange is supervised by the Saudi Arabian Monetary Agency in Riyadh. By the
end of the 1990's, Saudi Stock Exchange had 74 listed companies. The levels of the NCFEI Index are
shown in the following table.

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please email editor@countrywatch.com. For the full CountryWatch offering, please visit www.coun-
trywatch.com.

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