Kingdom is fighting commercial concealment
Commercial concealment is defined as any illegal business practice that enables non-Saudi individuals or businesses to invest or engage in business activities they are prohibited from.
The negative consequences are numerous, including the loss of business confidence due to a lack of equal opportunities. Such unfairness encourages corruption, raises the cost of running businesses in the country, encourages money laundering operations and commercial fraud. Additionally, it causes social problems such as theft and drug trafficking. In this context, commercial concealment is one of the main reasons for violation of residence and work regulations by expats who are seeking jobs illegally.
In addition, one of the main negative consequences of commercial concealment is the illegal practice of foreigners who come to the Kingdom pretending to be pilgrims, with the real intention of seeking work.
Unfortunately, the help of Saudi citizens has exacerbated the situation. Saudis hiring foreigners to work in their homes illegally contributes significantly to the increase of commercial concealment and to the unemployment rate among native Saudis in the Kingdom.
The government is targeting this through the implementation of the National Program to Combat Commercial Concealment. The program aims to stimulate electronic commerce, encourage the use of technical solutions, regulate financial transactions to reduce the exit of funds, promote growth in the private sector, generate jobs and encourage Saudis to invest and find solutions to the problem of irregular ownership by foreigners in the private sector.
The program will be a potential vehicle for citizens to own and do business in various commercial and investment sectors, and provide support and financing programs.
It is one of the initiatives of the trade and investment system of the National Transformation Program 2020, aimed at eliminating commercial concealment through the development of regulations and legislation, intensifying censorship and promoting awareness of the cover-up of crimes in all sectors.
Commercial banks in Saudi Arabia are also combating illegal transactions including proceeds generated from unauthorized businesses, such as commercial concealment, by applying the “Know Your Customer” (KYC) rule to all transactions.
Commercial concealment is a serious economic and financial disease that destroys the business environment of any country. The Saudi government is committed to combat it in order to ensure the existence of a healthy and fair business environment.
Talat Zaki Hafiz is an economist and financial analyst.