Saudi Arabia free zones

Saudi Arabia free zonesIn order to diversify Saudi Arabia’s economy, the kingdom has implemented two type of free zones that have as main objective attract foreign companies to develop industrial activities in the country: i) the industrial cities and ii) the economic cities.

The industrial cities were established in the 1980s and are now important economic centers in the kingdom. The economic cities project was launched in the years 2000 and are still under development.

The greatest advantage of both the industrial cities and the economic cities is that they allow 100% foreign owned companies.

Industrial cities

Currently the Kingdom counts with 28 industrial cities, all under the administration of the Saudi Industrial Property Authority (MODON).

Advantages include i) low land lease ii) availability of loans of up to 75% of the capital, with an extended repayment period of 20 years and iii) custom duty exemption for raw material and equipment.

The most famous industrial cities are: i) Jubail and ii) Yanbu. Both are major center for production of petrochemicals, chemic fertilizer, industrial gases, steel, iron and oil.

Economic cities

Tax incentives have yet to be announced, however it will include i) tax deductibility for training and salary costs and ii) tax exemption from customs duties on machinery and raw materials. Furthermore, projects with more than SAR 1 million capital and more than 5 Saudi national employees will be granted further deductions.

King Abdullah Economic City

  • The biggest of all of the economic cities, will cover an area of 168km2;
  • Main industries: port and logistics, light industry and services;
  • It expected to create 1 million jobs and to hold 2 million people;
  • It is being developed by Emaar the Economic City.

Knowledge Economic City

  • Located near the Holy Mosque of the Prophet in Medinah, it will cater to companies with a focus on Islamic education and services;
  • It will create 20,000 jobs and hold a population of 200,000 people.

Prince Abdulaziz Bin Mousaed Economic City

  • Will cover an area of 156km2;
  • It will create half a million jobs and hold 80,000 people;
  • The main industries are logistics, agribusiness, minerals and construction materials.

Jazan Economic City

  • It will focus on energy and labor intensive industries;
  • It will create 500,000 new jobs and will accommodate 250,000 people;
  • The main part of this Economic City is the Industrial park, which will occupy 2/3 of the space.

Contact us

For additional information on our free zone company registration services in Saudi Arabia, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
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