Saudi Gazette report
RIYADH — The Communications and Info Know-how Committee on the Riyadh Chamber has warned that native IT corporations are going through unfair competitors from international corporations working in Saudi Arabia from overseas with out business registrations, licenses, or headquarters.
These corporations provide low costs that give them an illegal benefit and hurt licensed companies.
The committee additionally cautioned concerning the safety dangers of coping with such corporations, together with the potential for knowledge leaks.
Suleiman Al-Ajlan, chairman of the committee, stated these corporations don’t bear the monetary obligations that licensed corporations — Saudi or international — should meet, reminiscent of taxes, zakat, authorities charges, and Saudization necessities.
He famous that this has negatively impacted gross sales for native corporations that can’t compete with artificially low costs, leading to financial drawbacks reminiscent of capital outflow, weakened help for small and medium enterprises, and setbacks in Saudization and the hiring of nationwide expertise.
Al-Ajlan burdened that Saudi Arabia’s massive and open market is a sexy atmosphere for these corporations. “Some could also be unaware of the authorized mechanisms out there to enter the market formally, whereas others intentionally exploit loopholes, reminiscent of contacting purchasers by social media, sending representatives on go to, vacationer, or Umrah visas for enterprise functions, or selling their corporations at commerce festivals by posing as guests.”
He added that whereas authorities entities don’t immediately cope with these corporations, some licensed corporations subcontract tasks to unlicensed international operators, which constitutes a transparent violation of laws.
He warned that working with such corporations exposes knowledge to dangers of leakage, sale, or misuse in unauthorized business actions and even for extra harmful functions.