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Volatile Laws Cost Entrepreneur Millions - Saudi Arabia

A Saudi citizen who wanted to start a car hire business after taking advice from the Transport Department lost millions of riyals after he fell foul of "frequently changing" Saudi laws.

Naif Hamdan, wanting to start a new car rental business, visited the Transport Department to obtain a license and was told that he needed to have a minimum of 50 cars and that the cars could be purchased on lease with an option to buy.

Hamdan leased the cars and then returned to the Transport Department in Jeddah, which told him that the law had recently changed and that he needed to be the sole owner of the cars in order to be issued a license. "I consulted the Transport Department in Jeddah and Makkah and bought 50 cars in Jeddah and another 15 in Makkah on lease. After all that, they told me that I couldn't start the business with cars that were purchased on instalments," said Hamdan.

"They previously gave me an OK. However, they are now preventing me from starting the business because according to new bylaws I must be the sole owner of the cars," he added.

Hamdan is calling on the Transport Ministry to find a solution to his problem. He said it took him a lot of time and effort to get documents of approval from various government departments, including the Traffic Department and police.

He added that he has registered his car renting company in the Shomous Security Program that oversees the car rental business in the Kingdom, provided the Transport Ministry with his commercial register at the Jeddah Chamber of Commerce and Industry and managed to get a license from the municipality to start his business. However, all of these documents are useless since he does not own the cars.

"Many people started business according to the law before it was changed. A few are now prevented from getting a license although we have previously been given the go-ahead," said Hamdan.

He has spent over SR2.2 million to lease cars. "This is in addition to other expenses. I wonder why the ministry gave me permission to start the business in the first place. This has caused me a lot of problems," said via ARABNEWS

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