A senior Saudi academic has presented a series of proposals, including easing foreign investment regulations, to combat illegal cover-up businesses in Saudi Arabia, which are estimated to be worth around SR236 billion.

Such businesses, which are run by expats with the support of Saudi nationals, should be given enough time to legalize their status, said Ayman Fadil, dean of the Faculty of Economics and Administration at King Abdulaziz University.

He also proposed the formation of a special agency to target businesses run by expatriates in the name of citizens and take legal action against them.

“We should also simplify measures related to foreign investment in sectors that show high rates of such illegal business to give a chance to those who are serious about rectifying their status,” he told a trade forum at the Asharqia Chamber in Dammam.

Eastern Province Gov. Prince Saud bin Naif launched the event, which called for measures to improve the Kingdom’s investment climate and increase domestic investment in the trade sector.

Abdul Rahman Al-Rashid, president of the Asharqia Chamber, said Saudi Arabia suffers an annual loss of SR16 billion as a result of imitation products and services.

“The Prince Mishaal bin Majed Chair for Conducting Studies on Cover-up Businesses aims at finding effective solutions to the problem,” said the dean, while presenting a paper at the forum.

According to a law issued in 2004, foreigners are not allowed to engage in any business activity without a license. GCC citizens are exempt from the law and will be treated like Saudi nationals.

“A total of 291 cover-up business cases were reported in 2011 and 64 of them were handed over to the public prosecutor for action,” Fadl said.

Around 37 percent of illegal businesses were in the contracting and construction sector, 13.2 percent in food and consumer goods, 3.5 percent in general trade and 14.3 in other trades and professions.

V.P. Mohammed Ali, managing director of Jeddah National Hospital, urged authorities to allow foreigners to invest in SMEs in partnership with citizens.

“It will help solve unemployment among Saudis and strengthen relations between Saudis and foreigners,” he told Arab News.