The entry of Gulf companies into the Saudi market is expected to result in a drop in prices and consumers will definitely heave a sigh of relief. The Council of Ministers on Monday gave the go-ahead to companies in the Gulf Cooperation Council (GCC) countries to open their branches in the Kingdom subject to some conditions. The 31st GCC summit meeting in Abu Dhabi in December agreed to treat these branches like national companies. Under the rules all companies opening branches in GCC countries will be entitled to the same treatment as indigenous businesses. However, under business trading rules a company must be registered in the GCC and its business must be permitted under GCC rules. It must be completely owned by GCC citizens, registered for three years and its branch manager must be a GCC citizen. The last of these two clauses can be changed by the home country. However the state can revoke the license if the company has a foreign partner or has violated any of the key conditions. Meanwhile Dr. Nasser Al-Oqod, Deputy Assistant Secretary General for Economic Affairs in the GCC, was quoted by Al-Watan Arabic newspaper as saying that the Saudi market is very large and all of the Gulf companies are excited to work in it. Economists say that this will improve competition and quality and see a drop in prices. “The rest of the GCC countries will approve the proposal before December,” Dr. Al-Oqod said. “This step will improve the nature of the private sector and make the operation of companies much easier,” he said. It is expected that all the applications will be finalized by the end of this year as the activation requires legislative action that differs from one country to another. Economist Fathel Alboaenen says combining GCC markets will ease profit exchange and increase Gulf economic power. “If any country implements the agreement positively, unhindered by bureaucracy, it will entice foreign investment and provide consumers with a wide range of choices,” he said. Increasing competition, he said, through many different national companies will increase quality and decrease prices in the local market.
