Another important aspect of Saudi Arabia is that it has a modern infrastructure and has been a secure and stable market for the last 15 years. (U.S. Saudi Arabian Business Council 3).
In order to accomplish this task with approved Saudi Arabian government support, a joint venture with Aramex was inevitably the best avenue. Saudi government tends to favorably look upon a joint venture with Saudi companies because it creates jobs and lures additional foreign investment. Some of the incentives include: tax holidays for ten years, custom tax exemption, low price electricity and natural resources, duty free capital equipment and most importantly government assistance in obtaining information and statistical data needed for this project (Dept. of Commerce 1-8). In addition to preferential treatment, Saudi government under a joint .
Saudi Arabia 2.
Venture readily supports a no tariff policy and low cost financing. Another key aspect was there were no personal income tax or restrictions on movement of funds, which is crucial in converting payment currencies to US dollars (Dept. of Commerce 1-4). Although Wilson Corporation gave up 25% share interest in the Myraj project it gains the support of the Saudi Government and incentives that are crucial for a swift beginning.
In researching which corporation to establish a joint venture, Wilson Corp. decided that Aramex Distribution Co. was the ideal choice because of its established reputation for superior distribution. It also was the first Arabian Corporation to be on the NASDAQ and has been established for 18 years. Aramex distribution Co. has a solid management staff, which helped generate over $100 million in sales in 2000. A joint venture is critical for Wilson Corporation because it not only alleviates the burden of distribution cost and concerns but also gains the knowledge and expertise in host country business practices. The knowledge and expertise shall prove invaluable in developing and maintaining market shares.
