Saudization drive exposes tasattur operations

30% of retail stores shut down in six months

March 16, 2019

Commerce Ministry officials close down a retail store run by expatriates during an inspection campaign.
Commerce Ministry officials close down a retail store run by expatriates during an inspection campaign.

Saudi Gazette report

The ongoing Saudization campaign carried out by the Ministry of Labor and Social Development in the retail sector has exposed may tasattur (coverup) operations where expatriates run businesses on their own in the name of Saudis after paying them a fixed amount.

Around 30 percent of retail shops in sectors where Saudization became mandatory were forced to shut down in the past six months because of this, Al-Madina Arabic newspaper reported.

However, market analysts told the newspaper that the closure of so many shops were not going to affect the business sector in any manner. In fact, this will keep the door wide open for Saudi nationals to invest and run their own shops. They explained that Saudizing the retail sector would eliminate up to 70 percent of all tasattur operations.

Wasif Kabli, deputy chairman of the commercial committee at the Saudi Council of Chambers of Commerce who also a member of its food committee, said Saudizing 12 job categories, in addition to forcing shops to employ Saudi cashiers and open bank accounts for transactions, helped a lot in curbing tasattur. He said this forced 30 percent of such businesses to shut down and exit the market.

However, there is a sharp shortage of trained Saudis to take over these shops. Kabli urged related authorities to train young Saudis to work in the retail sector to help revive the market. He also called for providing young investors with loans so they could open their own stores and work in them.

Ziad Al-Lohaidan, board member of Sunbulah Group, said Saudizing shops and giving the opportunity for young Saudi males and females to run their own businesses will evict illegal foreign traders from the market.

“It will help eliminate tasattur operations by 50 to 60 percent. Young Saudis should be trained and supported financially to run their own businesses,” he added.

Abdullah Filali, a member of the young businessmen›s committee at the Makkah Chamber of Commerce and Industry, said many business establishments that were operating under tasattur now left the market. Saudis were finally able to open their own shops and increase their investment in small- and middle-scale ventures.

Emad Al-Shater, a Saudi lawyer, said people caught running or abetting tasattur operations would be punished as per the discretion of the judge presiding over the case. He said the punishment stipulated by the law was a prison sentence of up to two years, a fine not exceeding SR1 million, or both penalties together.

The Saudi accomplice will be banned from running the same business for five years and he will be defamed by publishing the court verdict against him in newspapers. As for the expatriate partner, he will be blacklisted and deported from the country with no permission to return.

March 16, 2019
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