It is estimated that the Kingdom has 200,000 illegal tasattur businesses – small retail companies where Saudis allow foreigners to use their names in exchange for some of the profits. These companies have total assets in the region of SR4.1 trillion and employ 4.8 million people. These statistics from a 2009 study commissioned by the Riyadh Chamber of Commerce and Industry (RCCI) is the reason why the Ministry of Labor is cracking down on this practice. As part of the Nitaqat, or Saudization program, government is trying to transform and regulate the labor market to create more jobs for Saudis. The study showed that Riyadh, Jeddah and Dammam have more than 85 percent of these “coverup” businesses. There are no other reliable studies, but a source at the Jeddah Chamber of Commerce and Industry (JCCI), requesting anonymity, told the Saudi Gazette that “tasattur behavior is more pervasive in Jeddah than in other cities in the Kingdom”. He added that in other cities this activity is “relatively static”. In Jeddah it is worse because of the increasing number of Haj and Umrah overstayers. The source added that in his 20-year tenure with the JCCI, he estimates there are 10,000 to 12,000 such small businesses. This includes tailoring, home and office electric appliances, photo shops, barber shops, furniture stores and popular food restaurants. These are all sandwiched between large stores and various workshops across the city. This is out of the total JCCI membership of a little over 120,000 firms, of which 85,000 pay regular annual subscriptions. “If any business has operational capital of less than SR1 million, I bet it is a cover-up,” said the source. A three-day survey in Jeddah by a research team from the Saudi Gazette and the Prince Sultan College for Tourism and Business (PSCJ), of the 10 most populated Jeddah districts, according to Jeddah mayoralty data, found what appeared to be a number of tasattur businesses. These enterprises, mostly in low-income areas, are run by non-Saudis but have framed certificates to trade signed by Saudis. Probably the most obvious cover-up businesses were found along Sitteen Street, Madina Road North/South, Palestine Street, K2 and K5 Makkah Road and in residential districts including Alajwaad, Ammariya, Arrowais, Mushrifa, Anna'eem, Al-Safa, Prince Fawaz and Assamer. The Ministry of Labor is now asking various chambers of commerce to carry out the dual functions of investigating and verifying the current status of commercial establishments. All businesses with announced capital of less than SR3 million would be required to subscribe to the chamber in their region. Municipal permits would outline certain trade criteria, including in which areas businesses can operate. The expected revenue from the business fees would be split accordingly: 45 percent to the relevant chamber to set up in-house independent departments to enforce the no-tasattur policy; 45 percent to the chamber as additional no-mark revenue; and the remaining 10 percent to the Council of Saudi Chambers of Commerce and Industry (CSCCI). __
