Saudi Arabia

Banking & Cash Management in Saudi Arabia and the United Arab Emirates

Report date: 
18 Jun 2025

Commentary

Saudi Arabia and the United Arab Emirates. These two countries draw a lively and enthusiastic participation every time we discuss them: they are important markets, due to their wealth, but they have historically been quite challenging. Despite their strong financial position and stable currencies, their regulations can be difficult to manage – and their position at the heart of a region of massive geopolitical tension adds to the complexities.

Saudi Arabia, while sitting on massive oil reserves, has always been very conservative. It only began allowing 100% foreign ownership of companies in many sectors in 2019: most MNCs worked via distributors, joint ventures and representative offices. So the economy is relatively open, but MNCs often have a weaker presence than would normally be expected. With recent political changes, many rules have been relaxed. Tourism and inward investment are encouraged and there are some truly massive infrastructure investments. As companies establish their onshore presence in the country, they are even required to establish a regional headquarters.

The UAE has always been more open, though this varies amongst the seven emirates which compose it. The two main ones are Dubai, which has always been a major port and trading centre, especially between India and East Africa, and Abu Dhabi. Dubai is the most open, and has traditionally welcomed foreigners and foreign investment: it is where most of our peers have operations – often managing the region - and where it is easiest for them to work.

Corporate Treasury & Banking in Saudi Arabia

Most of our corporate treasury peers are setting up RHQs in Saudi, as required by the legislation. Many of the challenges they face are part of the process of transitioning from an offshore mode of operations using distributors and representative offices, to being fully onshore. To some extent, the same can be said of the international banks.

Though the currency is pegged to the US dollar, and freely convertible, there are challenges:

  • Cash pooling is only allowed with official....
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Topics covered in this report: 
Bank Accounts, Bank Relationships, Cash - deposits, Cash Pooling - cross border, Cash Pooling - domestic, Cash Repatriation, Local ownership
Service providers discussed in this report: 
JP Morgan, BNP Paribas, HSBC, Standard Chartered, Bank of America

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Banking & Treasury in Saudi Arabia

Report date: 
17 Apr 2023

Commentary

Saudi Arabia occupies a pivotal, and highly unusual, place in global politics and the world economy. As the world’s largest exporter of oil, and the holder of the second largest reserves of oil and gas, it is an essential part of the global economy – and has traditionally been relatively aligned with western and capitalistic countries. At the same time, it is a profoundly religious absolute monarchy, which practices a particularly conservative brand of Islam. This has always placed limits on its co-operation with western countries – limits which are being tested even more than usual in the current environment.

The current situation is particularly complex, as was clear in the call. Saudi Arabia has always imposed severe restrictions on foreign companies and banks, requiring local partners, and imposing local signatories and approvers for most, if not all, transactions. Limitations on where foreigners could live, and what they could do, have meant that many expatriate employees preferred to live with their families in Dubai, and commute to Saudi for the work week. However, the country has recently launched “Vision 2030”, which aims to open up the country and prepare it for a post oil future. This ranges from promoting tourism, allowing women to drive cars, and potentially allowing alcohol sales in specific places, to mega projects such as building a new city in the desert. It also includes pushing MNCs to transfer their regional headquarters to the kingdom. At the same time, foreign ownership is now allowed, either using a Saudi sponsor (with fees), or by paying 20% taxes. 

These developments are viewed positively by the participants – though several cautioned that there are many conflicting undercurrents in Saudi society, and the situation can always change at short notice. In all cases, Saudi Arabia is a large, and profitable, market, to which all our participants are fully committed, irrespective of the operational challenges.

Treasury practicalities:

  • Nearly all participants sell into Saudi from an offshore location, usually in USD. The currency is pegged to the USD, and there are no exchange controls, so things generally work well.
  • Several participants have opened local branches or subsidiaries, either to provide services or to act as sales offices, or technical offices to manage regulatory issues.
  • To participate in the mega projects being run by the government, it is a requirement to transfer any regional headquarters operation to the kingdom. There is direct competition with other countries in the region for this, particularly the UAE.
  • Saudi regulations state that the bank signatories and transactions mus
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Topics covered in this report: 
Bank Relationships, Banking, Funding, Intercompany loans, Payments - domestic, Payments - cross border
Service providers discussed in this report: 
JP Morgan, BNP Paribas, Citi, HSBC, SABB, National Commercial Bank

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