Saudi Arabia free zones in 2024

Saudi Arabia free zones

Manufacturing will be the greatest driver of the Saudi economy over the coming decade. The kingdom’s core oil and petroleum sector will become less important. We expect further large-scale investments in logistics infrastructure to support and stimulate manufacturing and industrial growth, as well as access to low-cost utilities and labour.

We expect Saudi Arabia’s network of i) industrial cities and ii) economic cities to attract new foreign investments. Companies established in these ‘free zones’ can be 100% foreign owned.

  • 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.
  • Comparison table

    KSA Economic Industrial Zones King Abdullah Economic City Jubail Industrial City Yanbu Industrial City Ras Al-Khair Minerals City Jazan Economic City (JEC)
    Summary at a glance
    Total year 1 engagement set up costs? (USD) 87,627 87,627 87,627 87,627 87,627
    Total subsequent yearly costs (incl. audit and tax)? 19,420 19,420 19,420 19,420 19,420
    Minimum paid-up share capital required (USD)? 134,000 134,000 134,000 134,000 134,000
    Free zone mostly popular in which industry? Logistics
    Light industry
    Power and water
    Oil refining
    Steel & Plastics
    Oil refining
    Conversion industries
    Oil refining
    Food processing
    Total engagement period? 7 months 7 months 7 months 7 months 7 months
    Exempt from corporation tax and GST? No Yes Yes No Yes
    Exempt from customs duties on machinery & raw materials? No Yes Yes No Yes
    100% foreign owned? Yes Yes Yes Yes Yes
    Average monthly warehouse rental (per sq. m.)? US$11 US$7 US$8 US$8 US$12
    Manufacturing allowed in the free zone? Yes Yes Yes Yes Yes
    Legal considerations
    Local or national shareholder required? No No No No No
    Minimum number of shareholders 1 1 1 1 1
    Minimum number of directors 1 1 1 1 1
    Resident director required No No No No No
    Resident company secretary required No No No No No
    Public register of shareholders and directors Yes Yes Yes Yes Yes
    Minimum paid-up capital required? (US$) 134,000 134,000 134,000 134,000 134,000
    Global sales exempt from corporate tax? No No No No No
    Must register for GST/VAT? Yes Yes Yes Yes Yes
    Global sales exempt from GST/VAT? Yes Yes Yes Yes Yes
    Social security on employees’ remuneration? 12% 12% 12% 12% 12%
    Corporation tax payable on local sales? 20% 20% 20% 20% 20%
    Annual audited financial statements? Yes Yes Yes Yes Yes
    Government grants for manufacturing? Yes Yes Yes Yes Yes
    Access to how many double tax treaties? 52 52 52 52 52
    Average customs tax on imports? 0.5% to 15% 0.5% to 15% 0.5% to 15% 0.5% to 15% 0.5% to 15%
    Can rent premises outside free zones? Yes Yes Yes Yes Yes
    Can make sales to overseas Clients? Yes Yes Yes Yes Yes
    Allowed to make sales to local Clients? No No No No No
    Government approval required? Yes Yes Yes Yes Yes
    Average skilled labour monthly salary US$2,500 US$2,500 US$2,500 US$2,500 US$2,500
    Average unskilled labour monthly salary? US$900 US$900 US$900 US$900 US$900
    Can the entity hire expatriate staff? Yes Yes Yes Yes Yes
    How long to get work permit approved? 2 months 2 months 2 months 2 months 2 months
    Monthly office rental (per sq. m.)? US$15 US$17 US$15 US$20 US$15
    Average annual Industrial space rent per 1000 sq ft US$130,000 US$90,000 US$100,000 US$95,000 US$90,000
    Allowed to import raw materials? Yes Yes Yes Yes Yes
    Allowed to export goods? Yes Yes Yes Yes Yes
    Nearest large port? King Abdullah Port Jubail Commercial Port Yanbu Commercial Port Ras Al-Khair Port Jazan Port
    Nearest to which international airport? King Abdulaziz International Airport King Fahd International Airport Prince Abdulmohsin Bin Abdulaziz Airport King Fahd International Airport King Abdullah bin Abdulaziz Airport
    Proximity to train network? Rabigh Station 101.8 km 500km 750km 660km
    Time to obtain corporate bank account 7 weeks 7 weeks 7 weeks 7 weeks 7 weeks
    Recommended bank? SABB Samba QNB Bank Al Jazira ANB
    Travel required for bank account opening? Yes Yes Yes Yes Yes
    Multi-currency bank accounts available? Yes Yes Yes Yes Yes
    Overseas remittance currency controls? No No No No No
    Other considerations
    OPEC member? Yes Yes Yes Yes Yes
    OECD member? No No No No No
    FATCA reporting? Yes Yes Yes Yes Yes
    CRS reporting? No No No No No
    Is the jurisdiction blacklisted? No No No No No

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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