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Saudi Arabia’s new visa regime comes into effect

The country’s new visa regime, which comes into effect on Sunday, does not affect pilgrims for Haj or Umrah travelling to the country for the first time.

Oct 02

00:00
2016

The country’s new visa regime, which comes into effect on Sunday, does not affect pilgrims for Haj or Umrah travelling to the country for the first time. But, as part of its effort to diversify non-oil income, subsequent religious visits and business travel will cost 2,000 Saudi riyals (Dh1,957) for a single-entry visa. Religious tourists were previously exempt from all visa fees. For all other travellers, entry visas will also cost more. For example, a multiple-entry visa now costs 3,000 Saudi riyals for six months, 5,000 Saudi riyals for a year and 8,000 Saudi riyals for two years. This compares with the 515 Saudi riyal multiple-entry visa previously charged to travellers from the UAE. The new visa regime was announced in August.

GCC nationals are excluded from all visa fees. The new visa regime could bring in millions of riyals from the religious travellers alone. "The recent visa fee hikes announced by Saudi Arabia will substantially increase the cost of travel to the kingdom for both pilgrims and other types of tourists such as business visitors and those visiting friends and relatives," said Rashid Aboobacker, the associate director at TRI Consulting, a consultancy in Dubai, on Saturday.

Mr Aboobacker said the new fee structure will not dent religious tourism as first-time Haj and Umrah visitors are still exempt from charges. "For most of the repeating Haj and Umrah pilgrims, particularly from within the region, a hike in visa fees may not be a major deterrent," he said.

"The substantial hike in the cost of entry visas may have a negative impact on business and [those visiting friends and relatives] as both companies and individual sponsors might now try to contain costs by limiting the number of trips and avoiding non-essential trips."

The new visa regulations come as Saudi Arabia’s revenues have been hit by the low oil price. Saudi banks continue to face liquidity pressures due to deposit outflows, a consequence of lower oil prices, according to credit rating agency Moody’s. Along with Fitch, it has downgraded ratings for Saudi Arabia. Last week, the country’s central bank, the Saudi Arabian Monetary Agency, said it will make about 20 billion Saudi riyals of time deposits in Saudi banks. Since the beginning of the year, the government has deposited 12bn Saudi riyals.

"Government deposits as of July were down 4.4 per cent from a year earlier because funds were needed to help finance its large fiscal deficit, which we estimate at around 12 per cent for 2016," Moody’s said in a report on Thursday. "Private-sector deposits also declined and were down 2.6 per cent year on year as of July, adversely affected by government spending cuts and weakening economic growth."

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