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Cost of

Doing

Business

Logistics December 2016

Contents

1 Introduction 4

2 Company Formation 6

3 Land Rental and Construction 7

4 Utilities 8

5 Manpower 10

6 Visa and Labor 12

7 Ports and Customs 14

8 Storage, Handling & Transportation 17

9 Taxes in the GCC 20

10 Office Rentals 20

11 Overall Cost of Doing Business 25

12 Cost of Living Indicators 29

Appendix 34

3

Disclaimer

The information contained herein is of a general nature and is not intended to address the

circumstances of any particular individual or entity. Although we endeavor to provide accurate and

timely information, there can be no guarantee that such information is accurate as of the date it is

received or that it will continue to be accurate in the future. No one should act on such information

without appropriate professional advice after a thorough examination of the particular situation. KPMG

does not guarantee that the use of the guidance in the report will lead to any particular outcome or

result. KPMG shall not be liable to anyone in respect of any business losses including, without limitation,

loss of or damage to profits, income, revenue, use, production, anticipated savings, business, contracts,

commercial opportunities or goodwill.

4

1 Introduction

The report discusses and compares a wide range of typical costs involved in setting up and operating a logistics business across specific jurisdictions within each of the Gulf Cooperation Council (GCC) countries. The cost items include one-time costs related to the setting up of the business and supporting infrastructure, as well as annual recurring costs pertaining to the operations and recurring regulatory requirements.

The key information presented and analyzed in this report pertain to:

Charges and fees for company formation and to procure the necessary licenses

Office rental costs (including costs for temporary renting of serviced offices)

Land rental, construction cost benchmarks for warehouses and costs of renting pre-built warehouse facility

Utility charges

Visa costs and eligibility of on-arrival and e-visas to various nationalities

Costs for obtaining residency permits

Manpower costs including salaries and benefits across a comprehensive list of standardized designations

Blue collared labor accommodation costs

Various applicable operating fees and taxes

Ports and customs duties and fees, including airport charges

Storage, handling and transportation

Guidelines on the mandatory recruitment of national workforce in the logistics sector

Costs of expatriate living, including residential rental cost, cost of education, utilities, telecommunication, etc.

Additionally, the report also presents key aspects of conducting business in the region, including:

Summary of the US Free Trade Agreements present in the GCC region (currently, only applicable for Bahrain and Oman)

Overview of the various operational incentives

The above information has been benchmarked across specific locations that permit logistics activity, within each GCC country – and are primarily in the form of Investment Parks / Cities or Free Trade Zones (FTZs). The benchmarked locations include:

Investment Parks / Cities:

– Bahrain Logistics Zone, Hidd, Bahrain (BLZ)

– King Abdullah Economic City, Jeddah, KSA (KAEC)

Free Trade Zones:

– Jebel Ali Free Zone, Dubai, UAE (JAFZA)

– Khalifa Industrial Zone, Abu Dhabi, UAE (KIZAD)

– Sharjah Airport International Free Zone, Sharjah, UAE (SAIF Zone)

5

– Ras Al Khaimah Free Trade Zone, Ras Al Khaimah, UAE (RAKFTZ)

– Sohar Port and Free Zone, Sohar, Oman (Sohar FTZ)

– Kuwait Free Trade Zone, Kuwait City, Kuwait (KWTFTZ)

Upon comparison, Bahrain exhibits the lowest values for the majority of the cost components, thereby presenting an optimal case for establishing logistics businesses. At an overall level, the cost for operating a logistics business in the GCC is lowest in Bahrain (BLZ), being 50% lower than the most expensive location, KAEC in Saudi Arabia.

Figure 1: Estimated total cost of business set-up1

Figure 2: Estimated annual operating cost2

1Cost estimates have been based on assumptions, as detailed in chapter 11 of the report

2As above

2.352.51 2.48 2.49 2.48

2.89 2.792.66

2.412.59 2.56 2.56 2.56

2.95 2.862.74

BLZ JAFZA KIZAD SAIF Zone RAK FTZ Sohar FTZ KAEC Kuwait FTZ

Minimum costs Maximum costs

1.48

2.762.56 2.65 2.61

1.69

3.11

2.34

1.71

3.092.88 2.97 2.94

1.95

3.42

2.64



6

2 Company Formation

Businesses undertaking logistics activities in the Free Trade Zones (FTZs) in countries such as the UAE, Oman and Kuwait, are regulated by the respective FTZ authorities. Businesses not operating within the FTZs (in countries such as Bahrain and Saudi Arabia) are regulated by the countries’ specific Industry and Commerce Ministries.

Company formation requirements typically comprise of three key components:

Application / registration fees to form the company, usually non-refundable

Annual license renewal fees, depending on the type of license held

Minimum capital requirement represents the mandatory paid up capital for starting the

business; however, this is not required by some FTZs and Investment Parks / Cities. Moreover, there is usually no restriction on the usage of the capital once the company has been legally established.

BLZ and KWTFTZ have significantly lower Registration Fees and Annual License Renewal Fees compared to the rest of the FTZs and Investment Parks / Cities.

The figure below includes the costs for registering a limited liability company with multiple corporate shareholders, and the corresponding annual license renewal fees.

Figure 3: Licensing and Registration Requirements

Annual Fees & Application Fees (USD)

Cost Head BLZ JAFZA DLC3 KIZAD SAIF Zone

RAKFTZ Sohar FTZ

KAEC KWTFTZ

Application Fee (One-time fee) Nil Nil Nil 1,360 Nil 95 Nil Nil Nil

Business Registration (One-time fee)

133 4,080 Nil 2,040 2,720 1,904 2,727 6,675 330

License/Registration Renewal Fee (Annual)

133 8,160 2,720 1,360 2,720 993 1,000 1,335 165

Minimum Capital Requirements Nil Nil 81,600 40,800 40,800 27,200 51,940 Nil

3,298 for LLC and

32,980 for PLC4

Other Charges Nil Nil Nil Nil Nil 326 Nil Nil Nil

Source: FTZ Authorities, Investment Park/City Authorities, Bahrain Investor Center, World Bank Doing Business Report, Qatar Ministry of Energy and Industry

In certain cases, additional fees may be included to the requirements stated above. Although JAFZA, for example, has no requirement for minimum capital, JAFZA mandates an Industrial License fee varying between USD 1,500 to USD 2,500 (based on the number of products) and an additional annual payment of 2% of rent (up to a maximum of USD 27,200) as Public Health Levy (PHL) fees. JAFZA additionally charges USD 130 as immigration card fees annually.

3Dubai Logistics City

4Limited Liability Company (LLC) and Public Limited Company (PLC)

7

3 Land Rental and Construction

All the FTZs and Investment Parks / Cities considered in this report provide land plots on mid to long-term lease, for constructing a warehousing unit.

The significant variation in costs can be attributed to the supply and demand characteristics in each country, maturity level of the individual FTZs and Investment Parks / Cities, as well as location of the particular land plot.

In terms of land rentals for warehousing, KWTFTZ and JAFZA are among the most expensive, while KAEC offers the most competitive rates.

Figure 4: Warehousing Land Rental Rates

Land Rental & Construction (USD)

Cost Head BLZ JAFZA DLC KIZAD SAIF Zone

RAKFTZ Sohar FTZ

KAEC KWTFTZ

Land Rental for a Warehouse Facility (per m2 per year)

9.5 12 – 145 10.3 – 12.0

8.2 9.52 9.5 7.0 4.4 10 - 11

Service charge (per m2 per year)

1.4 3% of annual

rent 0.7 0.8 1,088.0 Nil Nil 1.0 Nil

Pre-built warehouse with office space rental (per m2 per year)

82.8 – 111.4

95.2 – 163.2

190.4 117.0 93.0 66.6 85.701.0 –

93.5 66.7

158.3 – 257.2

Service charge (per m2 per year)

12.5 – 16.7

2% of annual

rent Nil Nil Nil Nil Nil 20% Nil

Construction Cost for warehouse

620 - 651 630 - 662 630 - 662 630 - 662 630 - 662 630 - 662 780 - 819 740 - 777 690 - 725

Source: FTZ Authorities and Investment Park/City Authorities, KPMG Research & Analysis

Warehouse units are available for rental through private developers or directly from FTZs and Investment Parks / Cities.

Construction costs vary significantly between the GCC countries, and the same trend continues for these costs within the respective FTZs and Investment Parks / Cities. Bahrain offers the lowest construction costs for a warehouse, with Oman being the most expensive.

5Prevalent land rates applicable for a logistics unit

8

4 Utilities

Electricity and water are key utilities in the logistics sector. Electricity and water tariffs for industrial consumption can vary based on multiple factors including total number of units consumed, as well as peak, off-peak and seasonal rates. Bahrain commands the lowest rates for water, while Kuwait offers the lowest rates for electricity. In contrast, the UAE charges the highest industrial tariffs for the utilization of both electricity and water. At an overall level, utility charges in Bahrain are less than half of those in the UAE.

Cost of utilities across the GCC has seen a steady rise in the last couple of years as governments look to reduce strain on fiscal budgets due to the low oil prices by gradually reducing subsidies on utilities.

For a typical warehousing facility, the utility cost at BLZ is around 61% lower than SAIF Zone, which is the most expensive location.

Figure 5: Cost of Utilities

Cost of Utilities (USD)

Utility BLZ JAFZA6 KIZAD SAIF Zone RAKFTZ Sohar FTZ7

KAEC SMSIA KWTFTZ

Electricity (per kWh)

0.04 – 0.08

0.08 - 0.12 0.04 – 0.08

0.13 0.12 0.05 – 0.06

0.05 0.04 0.03

Water

(per m3) 1.06 -1.99

2.45 – 3.11

1.09 3.35 3.30 2.40 2.14 1.49 1.81

Source: Respective electricity and water authorities, KPMG Research & Analysis

Industrial utility tariff in Bahrain is structured as tariff slabs based on the total monthly consumption of water and electricity. No seasonal or peak rates are applicable under the country’s current tariff structure. The below figures indicate the cost per unit for electricity and water in the GCC across the multiple slabs of consumption.

Figure 6: Electricity and Water Tariff Structure in Bahrain

Electricity Tariff (USD/kWh)

Electricity Consumption (kWh) Tariff

0 – 5,000 0.04

5,000 – 250,000 0.05

250,000 – 500,000 0.06

> 500,000 0.08

Figure 7: Electricity & Water Tariffs for Saudi Arabia



Any Quantity 0.05

Water Tariff (USD/m³)

Water Consumption (m³) Tariff

Any Quantity 2.14



0 – 450 1.06

451 – 1,000 1.33

> 1,000 1.99

6Tariff for the UAE includes a surcharge of between USD 0.01 and 0.02 as per FEWA / DEWA / SEWA tariff structures. Applies

to JAFZA, SAIF Zone and RAKFTZ

7Sohar FTZ electricity tariff is calculated as a weighted average of seasonal tariffs

9

Figure 8: Electricity & Water Tariffs for Dubai, UAE



0 – 10,000 0.08

> 10,000 0.12



0 – 10,000 2.45

10,001-20,000 2.75

> 20,000 3.11

Figure 9: Electricity & Water Tariffs for Abu Dhabi, UAE



0 – 100,000 0.044

> 100,000 (Off Peak) 0.044

> 100,000 (Peak) 0.082



Any Quantity 1.088

Figure 10: Electricity & Water Tariffs for Oman



Any Quantity (Sep – Apr) 0.052

Any Quantity (May – Aug) 0.062



Any Quantity 2.402

Figure 11: Electricity & Water Tariffs for Kuwait



Any Quantity 0.033



Any Quantity 1.814

Figure 12: Electricity & Water Tariffs for Qatar



Any Quantity 0.036



Any Quantity 1.485

10

5 Manpower

For a comparison of the manpower costs, employees across different categories have been considered, ranging from blue collared staff to the senior management.

When comparing the average salary earned by employees working in the logistics sector in the GCC, Bahrain exhibits the lowest manpower cost for blue collar staff. It is also the lowest in terms of the cost incurred for the managerial positions.

Figures quoted below indicate gross annual salaries, which include housing allowance, transport allowance, schooling allowance and medical insurance. The allowances account for 25% to 50% of the total salary.

Figure 13: Manpower Costs

Manpower Costs (‘000 USD per annum)

Designation Bahrain Saudi Arabia Qatar Kuwait UAE Oman

CEO 106 - 132 135 - 167 148 - 183 141 - 175 152 - 188 121 - 150

PA 25 - 31 28 - 35 33 - 41 27 - 33 34 - 42 25 - 31

Operations Manager 48 - 59 55 - 68 58 - 72 56 - 70 56 - 70 49 - 61

Operations Coordinator 28 - 36 30 - 39 33 - 43 30 - 39 35 - 46 27 - 36

Logistics Manager 38 - 38 45 - 46 48 - 49 45 - 46 48 - 49 40 - 40

Logistics Officer 17 - 21 20 - 24 21 - 26 20 - 24 21 - 26 17 - 21

Machine Operator 14 - 18 14 - 18 15 - 19 14 - 18 15 - 19 13 - 16

Warehouse In-charge 16 - 22 16 - 21 18 - 24 17 - 23 19 - 25 14 - 19

Driver 10 - 13 14 - 18 15 - 19 14 - 18 17 - 21 13 - 16

Forklift Operator 14 - 17 15 - 19 16 - 20 15 - 19 17 - 20 13 - 16

Customs Clearance Manager

46 - 65 55 - 77 57 - 81 55 - 77 58 - 82 50 - 70

Customs Clearance Agent

18 - 22 20 - 26 22 - 27 20 - 26 22 - 28 18 - 22

Maintenance Coordinator

13 - 34 15 - 40 16 - 42 15 - 40 16 - 43 13 - 34

Sales Manager 56 - 69 55 - 68 63 - 78 54 - 67 61 - 75 50 - 62

Sales Executive 18 - 23 20 - 25 22 - 28 20 - 25 23 - 29 18 - 22

Finance Manager 78 - 96 95 - 117 97 - 120 95 - 117 104 - 128 86 - 106

Accountant 20 - 33 23 - 38 24 - 41 23 - 38 25 - 42 20 - 33

Source: GulfTalent, KPMG Research & Analysis

11

Analyzing for a typical range of manpower costs necessary for the operations of a logistics business in the respective FTZs and Industrial Parks / Cities, Bahrain along with Oman, come out as the lowest cost centers. A comparison of the minimum and maximum total costs for manpower is presented in the figure below.

Figure 14: Total Annual Manpower Cost8 for a Logistics Company (USD ‘000)

Figure 15: Localization requirement

Localization requirement at FTZs

BLZ JAFZA KIZAD SAIF Zone RAKFTZ Sohar FTZ KAEC

Localization requirement (%)

25% Nil Nil Nil Nil 15% 10% to 35%

Source: FTZ Authorities, LMRA

Figure 16: Blue Collared Labor Accommodation

Cost of accommodation per year9 (USD)

BLZ / BIW JAFZA KIZAD SAIF Zone RAKFTZ Sohar FTZ KAEC KWTFTZ

Blue Collared Accommodation Rent (Per Labor Per Year)

1,167 3,354 1,306 1,034 816 2,935 2,286

– 2,938

1,187 –

1,583

The blue collared accommodation cost reflects the cost of accommodating a blue collared staff at a facility either located within the free zones or at a designated facility within the respective city. RAKFTZ offers the most competitive rates for labor accommodation, at USD 816, per labor per year, followed by the SAIF Zone in Sharjah and the BLZ in Bahrain. JAFZA in Dubai is the most expensive to accommodate blue collared staff, costing USD 3,354 per labor per year. For companies operating at the BLZ, labor accommodation is available at Bahrain Investment Wharf (BIW), located adjacent to the investment park. JAFZA, SAIF Zone, RAKFTZ and KAEC offer labor accommodation facilities within the free zone. While for the other free zones, labor accommodation is available in areas in close proximity to the zones.

8Reflects the average annual manpower costs for 16 employees consisting of 7 semi-skilled workers, 4 skilled workers, 2

administrative staff, and 3 senior management members

9Includes cost for room rent and utilities only and excludes all other costs such as food and laundry.

819

1,153 1,153 1,153 1,153

9271,023 1,0301,049

1,475 1,475 1,475 1,475

1,185

1,308 1,317



12

6 Visa and Labor

Visa and labor charges represent the costs associated with employing foreign workers, and typically include the following key components:

One-time entry visa

Work / Residency permit

Medical fees

ID card creation

While all the four components mentioned above are required for employing a foreign worker in the GCC, in Bahrain, a separate one-time entry visa and medical test are not required as the work permit includes these components.

The annual residency permit renewal constitutes the larger portion of visa and labor related costs, and varies significantly across the GCC, with Saudi Arabia being the most expensive. In the UAE, the renewal process also requires the medical test and ID card issuance to be repeated, thereby increasing the overall work permit renewal cost substantially.

Figure 17: Visa and Labor Costs

Visa and Labor Costs (USD per employee)

Cost Head Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Entry Visa 77 112 99 540 55 33

Work Permit10 (per year) 265 20511 391 67512 335.5 198

Medical Fees13 (per year) 191 150 780 675 27.5 165

ID Card Nil 100 29 230 Nil 17

Total first year cost 533 567 1,299 2,120 418 413

Source: Respective foreign affairs and manpower ministries, KPMG Research & Analysis

10All reported work permit figures are annual and are calculated by dividing the renewal fees by the duration of visa in years and

include stamping fees for passports

11The reported figure is the calculated annual cost for a 3 year visa available at the FTZs

12A work permit in Saudi Arabia is called a labour card and does not imply residency status which is only applicable after being

issued an ID card (Iqama). The reported figure can be lower if localization targets are met.

13Cost for medical insurance to access government hospitals and health centres. In Oman and Saudi Arabia, government

hospitals cannot be accessed by expatriates. Hence, cost of private health insurance has been taken.

13

Figure 18: Visa on Arrival and e-Visa

Nationalities eligible for visa on arrival and e-visa

Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Number of nationalities eligible for visa on arrival

67 47 68 None 33 52

Number of nationalities eligible for e-visa

114 47 68 None 33 52

Source: Respective foreign affairs and manpower ministries, KPMG Research & Analysis

Oman and Bahrain offer visa on arrival to the largest number of nationalities, compared to the other

GCC countries. Also, Bahrain offers e-visa to the largest number of nationalities. Saudi Arabia, on the

other hand, does not offer visit visas or e-visas to nationals of non-GCC countries – business, religious

and family visas, however, are offered on specific needs basis. The full lists of nationalities currently

offered visas on arrival and e-visas in each of the GCC countries are presented in Appendix A.

Figure 19: Cost of entry visa

Cost of entry visa (USD)

Visa Type Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Single entry visa 13 68 52 534 28 10

Multiple entry visa 66 150 130 801 330 N/A

Source: Government websites, KPMG Research & Analysis

Bahrain and Kuwait offer the most competitive visit visa costs compared to the other GCC countries.

Visa cost for visiting Saudi Arabia is several times higher than the other countries.

14

7 Ports and Customs

Sea Port charges are indicative costs of handling, clearing, documentation and last mile transportation charges for standard items. The table below represents the sea port charges applicable in GCC countries. Comparatively, Bahrain offers the best rates in the region.

Figure 20: Sea Port related Costs and Time

Sea Port Costs and Time

Location Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Port

Khalifa bin

Salman Port

Jebel Ali Port, Dubai

Port Khalid, Sharjah

Saqr Port, RAK

Khalifa Port, Abu

Dhabi

Sohar Port

King Abdullah

Port, Jeddah

King Abdulaziz

Port Dammam

Doha Port

Shuwaikh Port

Charges applicable for 20-foot containers (USD)

Terminal handling

93 250 250 250 120 105 100 100 125 400

Clearing, documentation and transportation

290 310 310 350 310 320 330 400 390 350

Charges applicable for 40-foot containers (USD)

Terminal handling charges

153 360 340 375 320 145 180 180 175 550

Clearing, documentation and transportation charges

350 500 475 550 525 450 750 750 450 450

Source: 3PL service providers, KPMG Research & Analysis

Port Storage Charge is the cost associated with storing containers at container terminals. The tariff

structure for container storage at the ports includes a ‘free time allowance’ during which no charge is

levied. Following the expiry of the free time allowance, storage charges are levied on a per container

per day basis, with progressive increase in tariff as per the applicable slab. Typically, importers limit

storage at ports to the free time period to avoid the tariff.

15

Illustrated below are the storage charges for container imports applicable to the relevant sea ports for each of the benchmarked FTZs and Investment Parks / Cities:

Figure 21: Port Storage Charges

Port storage charges for container imports (USD)

Storage costs (per day per container)

BLZ JAFZA SAIF Zone

RAKFTZ KIZAD Sohar FTZ KAEC Dammam SMSIA KWTFTZ

Khalifa Bin

Salman Port

Jebel Ali Port

Port Khalid

Saqr Port Khalifa

Port Sohar Port

King Abdullah

Port

King Abdulaziz

Port

Port of Doha

Shuwaikh Port

Free Time 11 days 10 days 10 days 7 days 14 days 10 days 7 days 7 days 3 days 10 days

20-foot container

4.0 (Day 12 to 21)

22.3 (Day 11 to 15)

20.4 (Day 11 to 15)

4.1 (Day 8 to 14)

21.8 (Day 15 to 19)

3.2 (Day 11 to 20)

80.1 (Day 8

onwards)

80.1 (Day 8

onwards)

16.5 (Day 4 to 6)

9.9 (Day 11 to 20)

5.3 (Day 22 to 31)

4.5 (Day 21 to 30)

16.5 (Day 21 to 30)

8.0 (Day 32 to 41)

41.6 (Day 16

onwards)

38.1 (Day 16

onwards)

8.2 (Day 15

onwards)

40.8 (Day 20

onwards)

33.0 (Day 7

onwards) 13.3 (Day 42

onwards)

6.5 (Day 31 onwards)

23.1 (Day 31

onwards)

40-foot container

8.0 (Day 12 to 21)

44.6 (Day 11 to 15)

40.8 (Day 11 to 15)

6.8 (Day 8 to 14)

43.6 (Day 15 to 19)

6.5 (Day 11 to 20)

80.1 (Day 8

onwards)

80.1 (Day 8

onwards)

33.0 (Day 4 to 6)

16.5 (Day 11 to 20)

10.6 (Day 22 to 31)

9.1 (Day 21 to 30)

26.4 (Day 21 to 30)

16.0 (Day 32 to 41)

83.2 (Day 16

onwards)

76.2 (Day 16

onwards)

13.6 (Day 15

onwards)

81.6 (Day 20

onwards)

66.0 (Day 7

onwards) 26.6 (Day 42

onwards)

13.0 (Day 31

onwards)

36.3 (Day 31

onwards)

Source: Port authorities, KPMG Research & Analysis

The Khalifa Port in Abu Dhabi offers the highest free time of 14 days for storage of import container at the port with Bahrain being the next most lucrative, offering 11 days of free time.

Port storage charges are the highest for ports in Saudi Arabia as the charges are levied per ton rather than per container. The Sohar Port in Oman offers the most competitive port storage charges while Bahrain’s Khalifa Bin Salman Port offers the next most competitive tariff rate.

16

Figure 22: Airport Terminal Charges

Airport terminal handling charges14 for cargo imports (USD)

Airport

BLZ JAFZA SAIF Zone RAKFTZ KIZAD Sohar FTZ KAEC Dammam KWTFTZ

Bahrain Int’l.

Airport

Dubai Int’l. Airport

Sharjah Int’l.

Airport

Ras Al Khaimah

Int’l. Airport

Abu Dhabi Int’l.

Airport

Muscat Int’l.

Airport

King Abdulaziz

Int’l. Airport

King Fahad Int’l.

Airport

Kuwait Int’l.

Airport

Airport cargo handling charges (per kg)

0.06 1.65 1.65 1.65 1.88 0.06 2.1 2.0 0.89

Source: KPMG Research & Analysis

The airport cargo handling charges are lowest at the Bahrain and Muscat international airports, at USD 0.06 per kg of imported cargo.

Figure 23: Customs Fees

Customs fee (USD per container)

Type of declaration Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Import 85 75 65 75 90 85

Export 85 65 65 80 130 85

Re-export 85 55 65 100 130 85

Temporary import and export

85 65 65 100 130 120

Transit 80 125 125 135 100 130

Certificate of origin 135 175 165 145 200 50


While the customs fees varies across the region at an aggregate level, Oman offers the most competitive rates with Bahrain and Kuwait marginally behind. Qatar had the highest overall customs-related fee.

14 Charges as levied by the respective airport authority.

17

8 Storage, Handling & Transportation

Bahrain has the lowest storage and handling costs across the GCC. Storage and handling costs are highest in the UAE and Saudi Arabia at roughly 20% higher than in Bahrain while Oman was the next most competitive market for warehousing with storage and handling costs about 10% higher than in Bahrain.

Figure 24: Storage and handling costs

Storage and handling costs for pallets (USD)

Pallet type Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Ambient pallet storage cost (per pallet per day)

0.58 0.70 0.64 0.70 0.67 0.68

Ambient pallet storage cost (per pallet per week)

3.50 4.20 3.85 4.20 4.03 4.10

Cold pallet storage cost (per pallet per day)

0.84 1.01 0.92 1.01 0.97 0.98

Cold pallet storage cost (per pallet per week)

5.10 6.12 5.61 6.12 5.87 5.97

Handling out cost (per pallet)

2.90 3.48 3.19 3.48 3.34 3.39

Source: 3PL service provider, KPMG Research & Analysis

When exporting goods into the Saudi market, Bahrain (Khalifa bin Salman Port) and Dubai (Jebel Ali Port) are the most competitive in terms of cost, while it takes the lowest number of days to export from Bahrain to Dammam by sea.

Figure 25: Sea freight cost and duration to Dammam

Sea freight cost and duration for exporting from GCC seaports to Dammam, Saudi Arabia

Location Bahrain Dubai, UAE Sharjah,

UAE

Ras Al Khaimah,

UAE

Abu Dhabi, UAE

Sohar, Oman

Jeddah, Saudi Arabia

Doha, Qatar Shuwaikh,

Kuwait

Port

Khalifa bin

Salman Port

Jebel Ali Port

Port Khalid Saqr Port Khalifa Port Sohar Port King

Abdullah Port

Doha Port Shuwaikh

Port

Sea freight cost (USD per 20' container)

350 350 N/A 500 500 500 475 500 600

Sea number of days

1 to 2 3 to 4 N/A 9 to 17 6 to 9 7 to 10 8 8 to 15 9 to 16


600 600 N/A 900 900 900 650 900 1000


18

When exporting goods into the Saudi market by road, Bahrain is the most competitive in terms of cost due to its geographical proximity to Dammam.

Figure 26: Trucking cost

Trucking cost from GCC entry point (seaports) to Dammam, Saudi Arabia (USD per container)

Location Bahrain Dubai, UAE Sohar, Oman Dammam, Saudi

Arabia Doha, Qatar

Shuwaikh, Kuwait

Freight type Khalifa bin

Salman Port Jebel Ali Port Sohar Port

King Abdulaziz Port Dammam

Doha Port Shuwaikh Port

Trucking cost (USD per 20' ambient container)

530 1450 3500 350 2000 600

Trucking cost (USD per 20' refrigerated container)

650 1600 4000 450 2200 740

Trucking cost (USD per 40' ambient container)

820 2250 5400 540 3100 950

Trucking cost (USD per 40' refrigerated container)

1000 2500 6150 700 3400 1170


Figures 25 and 26 provide an overview of the freight cost when exporting from Bahrain to the rest of the GCC by air and road respectively.

Figure 27: Air freight cost and duration

Air freight cost and duration for exporting from Bahrain to other GCC countries

Location UAE Oman Saudi Arabia Qatar Kuwait

Air freight cost (USD per kg)

3.2 4 3.2 3.2 3.2


Figure 28: Road freight cost and duration

Road freight cost and duration for exporting from Bahrain to other GCC countries


Road freight cost (USD per kg for loose truck load)

0.28 0.67 0.56 0.94 0.94


19

Figure 29: Sea freight cost and duration from Bahrain

Sea freight cost and duration for exporting from Bahrain to other GCC countries


Port Jebel Ali

Port, Dubai

Port Khalid, Sharjah

Saqr Port, RAK

Khalifa Port, Abu

Dhabi Sohar Port

King Abdullah

Port, Jeddah

King Abdulaziz

Port Dammam

Doha Port Shuwaikh

Port


150 500 650 450 538 580 400 488 513


205 650 700 550 700 700 600 650 650


20

9 Taxes in the GCC

Bahrain and the UAE – with no levy of corporate taxes – offer the most attractive tax regimes among the GCC countries. On the other hand, Qatar and Saudi Arabia provide this exemption only to companies owned by GCC nationals. Zakat is applicable only in Saudi Arabia and Kuwait.

Figure 30: List of taxes

List of taxes across GCC

Tax category Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Corporate income tax

None None

No tax on profits up to OMR

30,000. 12% tax on profits above

OMR 30,000

No tax on companies

owned by GCC nationals.

20% tax on profits under

foreign shareholding

No tax on companies

owned by GCC nationals. 10%

tax on non-GCC share of profits

1% tax on Kuwaiti shareholding

company. 15% tax on non-GCC share

of profits

Employer’s social security contribution

12% for nationals 15% for nationals 10.5% for nationals

9% for nationals 10% for nationals 11.5% for nationals

3% for expatriates

None for expatriates


2% for expatriates



Municipal tax

10% of commercial and residential rent for expatriates

5% of the specified rental

index

3% on property rents

None None None

Withholding tax

None None

10% for foreign companies that do not have a

permanent establishment in

Oman

5% to 15% on the foreign

shareholding component

5% on royalties and technical

services and 7% on any other payments for

services carried out wholly or

partly in Qatar

None

Other taxes Summary

None None None

Zakat of 2.5% is levied on

companies owned by GCC

nationals, on the company's Zakat

base

None

Zakat of 1% is levied on all

publicly traded and closed Kuwaiti

shareholding companies on the

profit

Companies with a workforce of less than 50%

Saudi nationals have to pay

SAR 200 per expatriate

employee per month

National Labor Support Tax -

companies listed in the KSE are

required to pay an employment tax of

2.5% of annual profits

Source: IMF, KPMG Research & Analysis

Bahrain and UAE offer the most lucrative tax regimes in the region. The highest liability for tax exists in Oman, largely due to its requirement of 12% taxation on any annual income above OMR 30,000 (USD 78,020).

The tax regimes discussed here highlight the overall taxation at the country-level. However, FTZs in these countries often offer tax exemptions in order to incentivize investment.

In Saudi Arabia, Zakat is levied on Saudi and GCC nationals, and on companies that are wholly owned by those individuals or have their equity interests in companies. There are certain rules that apply to the method of calculating the Zakat liability. In general, Zakat is levied at a fixed rate of 2.5% on the

21

higher of the adjusted taxable profits or the Zakat base. Zakat base is calculated as follows:

Figure 31: Additions and deductions to arrive at the Zakat Base

Additions and deductibles to arrive at Zakat base

Additions Deductibles

Current year adjusted profits Current year adjusted losses

Share capital Net book value of fixed assets

Retained earnings Approved accumulated losses brought forward

Reserves / provisions Long term investments in Saudi companies

Loans, current accounts credit balances Dividends paid during the year

Incentives offered by the Free Trade Zones

The following table provides an overview of the different incentives offered by the benchmarked FTZs and Investment Parks / Cities.

Figure 32: Incentives Offered by FTZs and Investment Parks / Cities

Incentives

Incentive Type BLZ JAFZA KIZAD SAIF Zone RAKFTZ Sohar FTZ KAEC KWTFTZ

Exemption from tax15,16

100% foreign ownership

100% repatriation of capital/profits

Duty Free Imports of raw materials and equipment17

Subject to approval

Duty Free access to GCC markets

Source: FTZ Authorities, Investment Park/City Authorities and KPMG Research & Analysis

15Tax exemptions are only guaranteed at BLZ and Sohar FTZ for a period of 10 years and 25 years respectively

16FTZs in the countries offer tax exemption as part of their incentive package.

17Exemption on import duties do not apply in Qatar; however, transit importation is permissible whereby imported

material/equipment is exempt from import duties if they are deposited in a free trade zone or exported within six months

22

10 Office Rentals

Cost effective and conducive office spaces are a key requirement towards undertaking successful business operations. While regular offices are required during the operational phases of a business, during the initial phases, serviced offices often provide the necessary support in quickly setting up of a business presence in a particular geography. This chapter assesses the cost for renting office spaces either within, or in close vicinity of, the FTZs and Industrial Parks / Cities within each country. The costs for renting serviced offices is also discussed in this chapter.

An overview of the prevalent rental rates across the office locations in the GCC (situated in proximity to the FTZs and Industrial Parks / Cities) shows Bahrain and Oman to have the lowest effective rental rates. On the other hand, Qatar and JAFZA have the most expensive rental rates for offices.

23

Figure 33: Office Rentals

Annual Rental of Offices (USD)

Cost component

Bahrain UAE18 Saudi Arabia Qatar Oman Kuwait

Bahrain Financial Harbor

World Trade Centre

Seef Area

Dubai Inv. Park

DAFZA Dubai Log. City

Dubai Science

Park

Dubai Internet

City JAFZA

Dubai Silicon Oasis

JLT DIFC Al

Khobar Riyadh Jeddah Doha Muscat

Kuwait City

Office Rental (per m2 per year)

250 192 192 205 – 349

503 – 530

440 322 468 544 – 707

435 176 – 410

792 200 – 254

320 – 454

267 – 401

720 276 435

Service Charge (per m2 per year)

Nil 96 10% of annual

rent 58 – 73

12.5% of annual

rent 82 58 88 Nil

Included in rent

Included in rent

10% of annual

rent

10% of annual

rent

10% of annual

rent

10% of annual

rent

10% of annual

rent Nil 20

Effective rent paid (per m2 per year)

250 288 211 263 – 422

566 – 596

522 380 556 544 – 707

435 176 – 410

871 220 – 279

352 – 499

294 – 441

792 276 455

Rent Deposit 3

months’ rent

3 months’

rent Nil

1 month rent

Nil 10% of annual

rent Nil Nil

10% of first year contract




10% of annual

rent

10% of annual

rent

10% of annual

rent

1 month rent

1 month rent

1 month rent

Agency Fee19 10% of first

year contract Nil

1 month rent

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% to 10% of

first year contract

5% of first

contract

5% of first

contract

5% of first

contract

Two weeks rent

Nil Nil

Municipal Property Tax20

10% of rent

10% of rent

10% of rent

10% of rent

Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil 5% of rent

Nil

Source: Primary Research, KPMG Analysis

18The common practice in the UAE is to pay 12 months’ rent in advance.

19Agency fee is only payable in case the tenant leases a property through an agent.

20Municipal property tax is not levied in free zones in Dubai. For commercial properties outside the free zone, a municipal property tax of 10% of the annual rent is levied.

24

The cost for serviced offices have been assessed considering the cost for renting an area suitable to accommodate two individuals (the most prevalent practice in renting similar properties). Rental rates for serviced offices vary significantly across the major cities in the GCC. Bahrain offers the most competitive serviced office market in the GCC costing about USD 1,430 per month. Dammam and Muscat are the next most competitive cities with serviced offices typically costing over USD 1,600 per month. Serviced offices are most expensive in Doha costing USD 4,390 per month.

Figure 34: Cost of renting serviced office across major cities in the GCC21

Rental rates for serviced offices (USD per month)

Country Bahrain UAE Oman Saudi Arabia Qatar Kuwait

Manama Abu Dhabi Dubai Muscat Dammam Jeddah Riyadh Doha Kuwait

City

Monthly rent

1,430 3,460 3,320 1,660 1,630 2,110 2,070 4,390 3,390

Source: Primary Research, KPMG analysis

Serviced offices are typically managed by professional serviced office management companies which lease office spaces to businesses or individuals. A serviced office is equipped with furniture, shared meeting rooms, shared receptionists and pantry, and provides access to internet, and shared printer, scanner and photocopier. Charges for using meeting rooms, kitchen consumables, phone calls and photocopies are often billed separately, based on usage.

21 Serviced office suitable to accommodate two individuals

25

11 Overall Cost of Doing Business

11.1 Overall Cost of Setting up

The following tables outline the overall set-up costs and cost of operating a logistics business within the various countries of the GCC. In order to compare, we have considered an illustrative example with the following assumptions:

Size of land: 5,000m²

Built-up area: 3,000m²

Number of employees in the set-up phase: 3

Number of employees in the operating phase: 45

Overall, cost of set-up at BLZ is around 19% lower than the most expensive location Sohar FTZ.

Figure 35: Cost of setting up22

Average Cost of Setting up (USD)

Cost Head BLZ JAFZA KIZAD SAIF Zone

RAKFTZ Sohar FTZ

KAEC KWTFTZ

Company Formation 265 12,240 4,760 5,440 3,318 3,727 6,675 495

Land Rental23 54,917 63,036 – 70,040

44,880 48,688 47,600 35,060 27,074 49,470 – 54,417

Construction Cost for Warehouse / Light Duty Factory24

2,046,000 2,079,000 2,079,000 2,079,000 2,079,000 2,574,000 2,442,000 2,277,000

Manpower25 231,450 –286,400

311,940 –385,900

311,940 –385,900

311,940 –385,900

311,940 –385,900

256,050 –316,800

285,000 –352,600

292,170 –361,500

Visa Cost25 1,599 1,701 1,701 1,701 1,701 3,897 6,360 1,239

Serviced Office Rental26 17,160 39,818 41,551 39,818 39,818 19,914 25,308 40,724

Total Cost 2,351,391

– 2,406,341

2,507,735 –

2,588,699

2,483,832 –

2,557,792

2,486,587 –

2,560,547

2,483,377 –

2,557,337

2,892,647 –

2,953,397

2,792,417 –

2,860,017

2,661,097 –

2,735,374

22The period of setup has been assumed to be one year

23Total land rental has been assumed for a land parcel of 5,000 m2

24Total construction cost has been assumed for a factory unit with a built-up area of 3,000 m2

25Manpower and visa costs have been calculated for 3 senior management staff for a period of one year

26Serviced office rental has been assumed for the rental of office space for two employees for the period of one year

26

11.2 Overall Cost of Annual Operations

The following table outlines the overall cost of operating a logistics business within the various countries of the GCC. As above, a standard warehousing unit of 3,000 m² built-up area, situated on a land of 5,000 m² area, and a manpower strength of 45 has been considered. Overall, annual operating cost at BLZ is around 50% lower than the most expensive location KAEC.

Figure 36: Comparison of operating costs

Average Annual Operating Costs (USD)

Cost Head BLZ JAFZA KIZAD SAIF Zone

RAKFTZ Sohar FTZ

KAEC KWTFTZ

Annual License Renewal Fees27

133 8,160 1,360 2,720 1,319 1,000 1,335 165

Land Rental28 54,917 63,036 – 70,040

44,880 48,688 47,600 35,060 27,074 49,470 – 54,417

Manpower29 819,150 – 1,049,300

1,153,440 –

1,475,200

1,153,440 –

1,475,200

1,153,440 –

1,475,200

1,153,440 –

1,475,200

926,700 – 1,185,441

1,022,600 –

1,307,800

1,029,770 –

1,316,800

Visa Cost26 23,985 25,515 25,515 25,515 25,515 58,455 95,400 18,585

Utility Cost30 9,775 19,741 10,160 25,844 25,293 11,604 10,233 7,539

Blue Collar Accommodation31

40,856 117,382 45,696 36,176 28,560 102,711 79,993 – 102,842

41,555 – 55,406

Ports & Customs 476,820 1,309,134 1,214,256 1,292,112 1,270,036 496,080 1,816,622 1,131,930

Storage and Handling 51,235 61,482 61,482 61,482 61,482 56,359 61,482 59,945

Total Cost 1,476,871

– 1,707,021

2,757,890 –

3,086,654

2,556,789 –

2,878,549

2,645,977 –

2,967,737

2,613,245 –

2,935,005

1,687,969 –

1,946,709

3,114,740 –

3,422,788

2,338,959 –

2,644,788


27Reflects the annual cost associated with renewing a license for logistics activity

28Reflects the average annual cost of renting a 5000 m2 plot of warehousing land (including service charge) within each FTZ and

Investment Park / City

29Manpower and visa costs have been calculated for 45 employees across a range of key designations

30Reflects the annual utilities cost based on a 3,000 m2 built-up area consuming 65.64 kWh per m2 per year and 30m3 of water

per month

31Blue collar accommodation cost is for a total of 35 blue collar staff

27

11.3 US Free Trade Agreement

Among the GCC countries, only Bahrain and Oman have signed a Free Trade Agreements (FTA) with the USA. The FTA has resulted in the reciprocal elimination of duties on virtually all current bilateral trade in consumer goods, agricultural goods and industrial products. The FTA also contains provisions that are expected to expedite the movement of goods and the provision of services between the countries and further improve the regulatory climate for bilateral trade and investment.

Figure 37: US-Bahrain Free Trade Agreement

US-Bahrain FTA

Key highlights

• The US-Bahrain Free Trade Agreement (FTA) was signed on 14th September, 2004 and came into force on 1st August, 2006. The FTA made Bahrain the first country in the GCC and third among the Arab countries (other being Jordan and Israel) to have an FTA with the US.

• The FTA was established with the intention to boost trade flows between the two countries through the elimination of trade tariffs on imports and exports of goods and services. It further aims to bilateral investments.

• A vital objective of the FTA for Bahrain is to increase trade flows, stimulate inward flow of investment, expand major manufacturing and services sectors, and encourage the exchange of expertise to create employment opportunities in Bahrain.

• Another aspect of the FTA is that the administrative fees (e.g., for such consular transactions as document verification) have been either eliminated or reduced.

• The FTA also provided a preferential tariff treatment, through a transition period of ten years following entry into force of the FTA, for textile and apparel goods that do not meet the rules of origin requirement. This was to provide time to the US and Bahrain textile producers to develop and expand business contacts. The transition period ended in 2015.

• The specific rules of origin of the FTA ensure that only Bahrain and the US goods benefit from the preferential duty treatment. As such, goods originating in Bahrain or USA and goods that underwent a substantial transformation with at least 35% value added in Bahrain or USA qualify for the preferential duty treatment.

• Some of the other areas of commitment as part of the FTA are related to intellectual property rights (IPR), local labor laws, environmental protection through sustainable development and transparency in business regulations.

Source: MoICT Bahrain; Office of the United States Trade Representative

28

Figure 38: US-Oman Free Trade Agreement

US-Oman FTA

Key highlights

• Oman and the US signed a free trade agreement which came into effect on 1st January 2009. The agreement made Oman the second country in the GCC (after Bahrain) and one of the 20 countries in the world to have an FTA with the US.

• While most of the text in the US-Oman FTA is similar to that in the US-Bahrain FTA in terms of the extent of tariff concessions and rules of origin, some FTA obligations deal with the specific aspects of the bilateral trade relations between US and Oman.

• Like Bahrain’s FTA with the US, the US-Oman FTA also involves commitment in areas of intellectual property rights, local labor laws, environmental protection and transparency in business regulations.


Figure 39: Comparison between Bahrain and Oman’s FTA with the USA

FTA details US-Bahrain FTA US-Oman FTA

Agreement name US-Bahrain Free Trade Agreement US-Oman Free Trade Agreement

Implementation date 1st August, 2006 1st January, 2009

Sectors covered • Agriculture

• Consumer goods

• Industrial goods

• Financial services

• Textiles and apparels

• Telecommunications

• Computer and related services

• Healthcare

• Education

• Advertising

• Tourism

• Transportation

• Engineering

• Construction

• Audiovisual

• Express delivery services

• Agriculture

• Consumer goods

• Industrial goods

• Financial services

• Textiles and apparels

• Telecommunications

• Computer and related services

• Healthcare

• Energy services

• Construction

• Environment and Information Technologies

• Audiovisual

• Express delivery services


29

12 Cost of Living Indicators

12.1 Cost of Schooling

Costs for schooling and education are the lowest, overall, in Bahrain and Kuwait. An analysis of the relevant costs are presented below, considering typical expenditure for a school with a British curriculum. At an overall level, Bahrain and Kuwait are the most cost effective education destinations. Bahrain is also around 25% less expensive than Doha and 30% less expensive than Dubai, the most expensive destination in terms of schooling.

Figure 40: Cost of Schooling across Major Cities in the GCC32

Typical annual fees for a British Curriculum school (USD)

Stage of schooling Bahrain UAE Oman Saudi Arabia Kuwait Qatar

Manama Abu Dhabi Dubai Muscat Dammam Jeddah Riyadh Kuwait City Doha

Pre-School 7,940 - 10,380

13,030 - 13,030

11,170 - 14,070

9,040 - 10,990

7,860 - 11,130

7,930 - 13,220

9,900 - 13,880

6,120 - 9,570

9,630 - 13,200

Primary (Years 1 to 6) 10,380 - 11,430

15,260 - 15,260

14,070 - 14,070

11,840 - 12,430

11,130 - 11,600

13,220 - 13,220

13,880 - 14,850

9,810 - 11,240

14,520 - 14,520

Secondary (Years 7 to 13)

13,810 - 19,120

15,610 - 17,190

19,400 - 24,310

16,560 - 22,010

16,220 - 22,390

16,500 - 20,510

16,220 - 22,390

13,610 - 16,810

16,830 - 18,160


12.2 Cost of Accommodation

Cost for accommodation has been assessed across various residential types in the major cities in the GCC. Bahrain and Saudi Arabia are comparatively the most cost effective locations in the region. The UAE, Qatar and Kuwait are the most expensive locations, with property rents typically being between 40% and 80% more than Bahrain.

Figure 41: Cost of Accommodation

Typical monthly cost of accommodation (USD)

Accommodation type Bahrain UAE Oman Saudi Arabia Kuwait Qatar

Manama Abu Dhabi Dubai Muscat Dammam Jeddah Riyadh Kuwait City Doha

Apartment - 1 BR 1,060 - 1,460

2,450 - 2,720

2,180 - 2,580

1,690 - 1,950

610 - 670 670 - 930 890 - 1,470 1,980 - 2,140

2,060 - 2,340

Apartment - 2 BR 1,590 - 2,120

3,400 - 3,670

2,720 - 2,990

1,950 - 2,860

850 - 850 1,090 - 1,200

1,560 - 1,890

2,310 - 2,800

2,340 - 2,610

Apartment - 3 BR 1,720 - 2,390

4,220 - 4,620

4,080 - 4,350

2,080 - 3,900

890 - 1,130 1,340 - 1,520

2,000 - 3,070

2,800 - 2,970

2,890 - 3,440

Villa - 3 BR 1,990 - 3,980

4,620 - 5,030

4,620 - 5,030

3,380 - 4,160

1,340 - 1,740

1,600 - 1,740

3,340 - 3,940

3,300 - 5,280

3,550 - 4,210

Villa - 4 BR 2,520 - 3,980

5,300 - 5,580

5,030 - 5,580

4,540 - 6,490

1,870 - 2,270

1,870 - 2,400

4,270 - 4,810

4,290 - 8,250

4,370 - 5,340


32 Considering schools with British curriculum

30

12.3 Vehicle Cost

Cost of purchasing vehicles is fairly comparable across the GCC countries, with minor price variations. Overall, Bahrain and Oman offer vehicles at the cheapest prices, and the prices in Kuwait and Qatar are the highest.

Figure 42: Car Purchase Price

Car make & model (in USD)

Bahrain Saudi Arabia UAE Oman Kuwait Qatar

BMW 3-Series 2017 35,005 35,195 35,938 34,286 36,341 36,250

Ford Fusion 2017 21,215 21,330 21,781 20,779 22,135 21,970

Toyota Camry 2017 22,541 21,197 22,843 22,338 23,456 23,618


12.4 Residential Electricity & Water Tariffs in the GCC

This section presents the residential tariffs for electricity and water in the respective GCC countries. Unlike in the case of industrial tariff, all the GCC countries have implemented a stratified tariff structure, whereby the rates are consistently increased with the increase in consumption.

For a typical household, the utility costs in Bahrain are around 79% lower than Dubai, which has the highest tariffs.

Figure 43: Residential Electricity & Water Tariff in Bahrain



0 - 3000 0.016

3001 - 5000 0.034

> 5000 0.050



0 - 60 0.212

61 - 100 0.531

> 100 0.796

Figure 44: Residential Electricity & Water Tariffs in Saudi Arabia



0-2000 0.013

2001-4000 0.027

4001-6000 0.053

6001-8000 0.08

>8000 0.08



<15 0.027

16-30 0.267

31-45 0.801

46-60 1.07

>60 1.60

31

Figure 45: Residential Electricity & Water Tariffs in Dubai, UAE



0-2000 0.08

2001-4000 0.094

4001-6000 0.105

>6000 0.121



0-6000 2.45

6001-12000 2.75

>12000 3.11

Figure 46: Residential Electricity & Water Tariffs in Abu Dhabi, UAE



Up to 600 0.057

> 600 0.087



Up to 21 1.62

> 21 2.87

Figure 47: Residential Electricity & Water Tariffs in Oman



0-3000 0.026

3001-5000 0.039

5001-7000 0.052

7001-10000 0.065

> 10000 0.078



< 5000 1.371

> 5000 1.714

Figure 48: Residential Electricity & Water Tariffs in Kuwait



0-1000 0.017

1001 - 2000 0.033

> 2000 0.049



0 – 10000 0.725

10001 – 20000 1.451

20001 – 30000 2.177

> 30000 2.902

32

Figure 49: Residential Electricity & Water Tariffs in Qatar



0 – 2000 0.022

2001 – 4000 0.025

4001 - 6000 0.028

6001 – 8000 0.033

8001 – 15000 0.049

> 15000 0.061



0 – 20 1.21

21 – 70 1.49

71 – 150 1.76

151 - 250 2.04

> 250 2.59

12.5 Telecommunication Costs

At a consolidated level, telecommunications costs are the cheapest in Bahrain and Qatar. Comparatively, mobile and landline costs are the most expensive in Saudi Arabia and the UAE, where the effective costs could be more than double than that in Bahrain.

Figure 50: Cost of Telecommunications

Cost for purchasing ‘basket’ of telecommunications services (USD per month)

Country Bahrain Saudi Arabia UAE Oman Kuwait Qatar

Residential PSTN33 (fixed voice)

16.86 28.44 15.02 22.29 Not available34 18.54

Mobile calls35 45.77 101.30 133.82 104.88 43.80 56.44

Source: Strategy Analytics. Telecommunications Retail Price Benchmarking for Arab Countries 2015. December 2015. KPMG Research & Analysis

12.6 Fees for Domestic Help Visa

Oman is the most expensive country for securing visa for housemaids, while Saudi Arabia, followed by Kuwait, is the cheapest. Qatar, Bahrain and the UAE offer visas for domestic help for a price range of around USD 85 to USD 100. However, while Bahrain, the UAE and Oman provide visas with a two-year validity, Saudi Arabia, Kuwait and Qatar only provide visas with a validity period of one year.

Figure 51: Domestic Help Visa Fees

Cost for Domestic Help Visa Fees (USD)


Visa fees 90a 15 109a 366a 33 83

Source: Nationality, Passports & Residence Affairs Bahrain, Ministry of Interior Qatar, Ministry of Interior UAE, Ministry of Foreign Affairs Saudi Arabia, Primary Research, KPMG Analysis Note a: Visa provided for two years

33For a typical usage of 60 calls per month per user

34In Kuwait, fixed line charges are heavily subsidised, costing USD 198 for installation, USD 17 for service charge and just an

annual USD 99 for subscription renewal

35For a typical usage of 900 calls and 2GB data per month per user

33

12.7 Salary for Domestic Help

Prevalent salary ranges for domestic helps are fairly comparable across the GCC, with salaries varying from USD 400 to USD 450 in all the countries.

Figure 52: Domestic Help Salary

Salary for Domestic Help (USD per month)


Monthly salary 400 430 430 415 390 430


12.8 Fitness Club Membership

Membership at fitness clubs is an important lifestyle component, especially among the white collared employees. Annual fitness clubs membership fees, even for clubs providing standardized and comparable services, vary significantly in the region – with Saudi Arabia on the cheapest, and Qatar, the UAE and Kuwait on the most expensive ends of the spectrum. Prices in Bahrain are largely midway, being around 35% cheaper than Kuwait, where prices are the highest. Since major global fitness club chains are yet to be established in Oman, it has not been included in the table below.

Figure 53: Fitness Club Annual Membership Fees

Cost for Fitness Club membership

Bahrain Saudi Arabia UAE Kuwait Qatar

Annual fees 1,110 930 1,360 1,490 1,350


34

Appendix

A. Eligibility for e-Visa and Visa on Arrival

All countries, apart from Saudi Arabia offer e-visas and visas on arrival to certain selected foreign nationalities. Among the GCC countries, Bahrain has by far the highest number of nationalities eligible for either e-visa (114 nationalities) or visa on arrival (67). Following Bahrain, Oman offers e-visa / visa on arrival to members of 68 nationalities.

Figure A.1: Nationalities offered e-Visa and Visa on Arrival to Bahrain

Nationalities offered e-Visa and Visa on Arrival – Bahrain

Nationalities offered e-Visa (114) Nationalities offered Visa on Arrival (67)

Andorra Dominican Republic

Kazakhstan Saint Martin Andorra South Korea Chile

Anguilla Ecuador Kenya Saint Vincent and the Grenadines

Australia Spain Columbia

Antigua and Barbuda

Egypt Latvia San Marino Austria Sweden Ecuador

Argentina Estonia Liechtenstein Senegal Belgium Switzerland Paraguay

Aruba Falkland Islands Lithuania Seychelles Brunei Thailand Peru

Australia Finland Luxembourg Singapore Canada The Netherlands Suriname

Austria France Macau Saint Maarten China Turkey Uruguay

Bahamas French Guyana Malaysia Slovakia Denmark UK Falkland Islands

Barbados Gabon Malta Slovenia Finland US Venezuela

Belgium Germany Martinique South Africa France Vatican City

Bolivia Ghana Mauritius South Korea Germany Bulgaria

Brazil Greece Mexico Spain Greece Croatia

British Virgin Islands

Grenada Monaco Suriname Hong Kong Cyprus

Brunei Guadeloupe Montserrat Sweden Iceland Czech Republic

Bulgaria Guyana Morocco Switzerland Ireland Estonia

Cameroon Haiti Mozambique Taiwan Italy Hungary

Canada Hong Kong New Zealand Thailand Japan Latvia

Caribbean Netherlands

Hungary Norway The Netherlands Kazakhstan Lithuania

Cayman Islands Iceland Pakistan Trinidad and

Tobago Lichtenstein Malta

Chile India Paraguay Turkey Luxembourg Poland

China Indonesia Peru Turks and Caicos

Islands Macau Romania

Columbia Ireland Poland UK Malaysia Slovakia

Croatia Isle of Man Portugal U.S. Virgin Islands Monaco Slovenia

Cuba Isle of Wright Puerto Rico Uruguay New Zealand Mexico

Curacao Italy Romania US Norway Argentina

Cyprus Ivory Coast Russia Vatican City Portugal French Guyana

35

Nationalities offered e-Visa and Visa on Arrival – Bahrain


Czech Republic Jamaica St. Barthelemy Venezuela Russia Bolivia

Denmark Japan St. Kitts and

Nevis San Marino Guyana

Dominica Jordan Saint Lucia Singapore Brazil

Figure A.2: Nationalities offered e-Visa and Visa on Arrival to the UAE

Nationalities offered e-Visa and Visa on Arrival – UAE


Andorra Hungary Portugal Andorra Hungary Portugal

Australia Iceland Romania Australia Iceland Romania

Austria Ireland San Marino Austria Ireland San Marino

Belgium Italy Seychelles Belgium Italy Seychelles

Brunei Japan Singapore Brunei Japan Singapore

Bulgaria Latvia Slovakia Bulgaria Latvia Slovakia

Canada Liechtenstein Slovenia Canada Liechtenstein Slovenia

Croatia Lithuania Spain Croatia Lithuania Spain

Cyprus Luxembourg Sweden Cyprus Luxembourg Sweden

Czech Republic Malaysia Switzerland Czech Republic Malaysia Switzerland

Denmark Malta The Netherlands Denmark Malta The Netherlands

Estonia Malta United Kingdom Estonia Malta United Kingdom

Finland Monaco United States Finland Monaco United States

France New Zealand Vatican France New Zealand Vatican

Germany Norway Germany Norway

Greece Poland Greece Poland

Figure A.3: Nationalities offered e-Visa and Visa on Arrival to Saudi Arabia

Nationalities offered e-Visa and Visa on Arrival – Saudi Arabia


None None

36

Figure A.4: Nationalities offered e-Visa and Visa on Arrival to Oman

Nationalities offered e-Visa and Visa on Arrival – Oman


Andorra Germany Paraguay Andorra Germany Paraguay

Argentina Greece Poland Argentina Greece Poland

Australia Hong Kong Portugal Australia Hong Kong Portugal

Austria Hungary Rumania Austria Hungary Rumania

Belgium Iceland San Marino Belgium Iceland San Marino

Bolivia Indonesia Seychelles Bolivia Indonesia Seychelles

Brazil Ireland Singapore Brazil Ireland Singapore

Britain Italy Slovakia Britain Italy Slovakia

Brunei Japan Slovenia Brunei Japan Slovenia

Bulgaria Latvia South Africa Bulgaria Latvia South Africa

Canada Lebanon South Korea Canada Lebanon South Korea

Chile Liechtenstein Spain Chile Liechtenstein Spain

Colombia Lithuania Suriname Colombia Lithuania Suriname

Croatia Luxembourg Sweden Croatia Luxembourg Sweden

Cyprus Macao, SAR of

China Switzerland Cyprus Macao, SAR of

China Switzerland

Czech Rep. Macedon Taiwan Czech Rep. Macedon Taiwan

Dar al-Salam Malaysia Thailand Dar al-Salam Malaysia Thailand

Denmark Malta Turkey Denmark Malta Turkey

Ecuador Moldova United States Ecuador Moldova United States

Estonia Monaco Uruguay Estonia Monaco Uruguay

Finland Netherlands Vatican Finland Netherlands Vatican

France New Zealand Venezuela France New Zealand Venezuela

French Guiana Norway French Guiana Norway

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Figure A.5: Nationalities offered e-Visa and Visa on Arrival to Qatar

Nationalities offered e-Visa and Visa on Arrival – Qatar


Andorra Hong Kong Norway Andorra Hong Kong Norway

Australia Iceland Portugal Australia Iceland Portugal

Austria Ireland San Marino Austria Ireland San Marino

Belgium Italy Singapore Belgium Italy Singapore

Brunei Japan South Korea Brunei Japan South Korea

Canada Liechtenstein Spain Canada Liechtenstein Spain

Denmark Luxembourg Sweden Denmark Luxembourg Sweden

Finland Malaysia Switzerland Finland Malaysia Switzerland

France Monaco UK France Monaco UK

Germany Netherlands USA Germany Netherlands USA

Greece New Zealand Vatican Greece New Zealand Vatican

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Figure A.6: Nationalities offered e-Visa and Visa on Arrival to Kuwait

Nationalities offered e-Visa and Visa on Arrival – Kuwait


Andorra Hong Kong Portugal Andorra Hong Kong Portugal

Australia Hungary Romania Australia Hungary Romania

Austria Iceland San Marino Austria Iceland San Marino

Belgium Ireland Singapore Belgium Ireland Singapore

Bhutan Italy Slovakia Bhutan Italy Slovakia

Brunei Japan Slovenia Brunei Japan Slovenia

Bulgaria Laos South Korea Bulgaria Laos South Korea

Cambodia Latvia Spain Cambodia Latvia Spain

Canada Liechtenstein Swaziland Canada Liechtenstein Swaziland

Cyprus Lithuania Sweden Cyprus Lithuania Sweden

Czech Luxembourg Switzerland Czech Luxembourg Switzerland

Denmark Malaysia Turkey Denmark Malaysia Turkey

Estonia Malta UK Estonia Malta UK

Finland Monaco USA Finland Monaco USA

France Netherlands Vatican France Netherlands Vatican

Georgia New Zealand Vietnam Georgia New Zealand Vietnam

Germany Norway Germany Norway

Greece Poland Greece Poland

39

©2016 KPMG Fakhro, a Bahrain partnership registered with the Ministry of Industry, Commerce and Tourism (MOICT), Kingdom of Bahrain and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Printed in the Kingdom of Bahrain.

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