Saudi Arabia is making bold moves to transform its economic landscape, and the newly launched Special Economic Zones (SEZs) are setting classic examples on this front. Introduced in April 2023, these zones are designed to facilitate quality investments, foster innovation, and create a competitive business environment.
For businesses looking to expand in the region, SEZs provide several business benefits, from tax incentives and relaxed regulations to world-class infrastructure and seamless trade facilitation. Whether you’re in logistics, manufacturing, cloud computing, or advanced industries, Saudi Arabia’s SEZs are built to support long-term business growth.
In this post, we look at the key SEZs and their features and also look at the reasons that make these zones suitable for long-term success.
Special Economic Zones: The Game-Changing Benefits for Investors
The Special Economic Zones are a huge part of Saudi Arabia’s Vision 2030 and marked one of the most prominent ventures under the NIS (National Investment Strategy). The SEZs soon became crucial for the overall development of strategic sectors by:
– Offering unrestricted capital repatriation for foreign investors.
– Providing customs and VAT exemptions for goods moving within and between zones.
– Ensuring world-class infrastructure and logistics to streamline operations.
– Creating a pro-business regulatory environment with flexible labor laws.
Since their launch, several multinational corporations and publicly listed companies have already established their presence in these zones, taking advantage of the lucrative incentives.
Who Oversees the SEZs?
The Economic Cities and Special Zones Authority (ECZA) is the primary regulatory body overseeing the SEZs. Originally founded in 2010 to manage Saudi Arabia’s Economic Cities, its role expanded in 2019 to supervise the SEZs and attract investment.
Each SEZ is designed with a unique focus to cater to specific industries, ensuring tailored support for businesses. We will now have a look at the key economic zones and their main features.
Saudi Arabia’s Five Key Special Economic Zones
1. Ras Al-Khair SEZ: The Maritime and Shipbuilding Powerhouse
– Location: Eastern Province, near Ras Al-Khair Port
–Focus Industries: Shipbuilding & repair (MRO) and rig platform services
What makes it special?
– Home to MENA’s largest shipyard (12 million sq. meters).
– Serves 100+ manufacturing projects.
– Key part of the USD 162 billion global maritime market.
– Consists of four (4) new offshore rigs and can handle forty-three vessels.
2. King Abdullah Economic City (KAEC) SEZ: The Future of Industry & Logistics
– Location: Between Makkah and Madinah, near King Abdullah Port
– Focus Industries:
- Electric Vehicle & Automotive Supply Chain
- Pharmaceuticals & MedTech
- ICT & FMCG
- Logistics
What makes it special?
– World-class commercial hub covering 168-180 sq. km.
– Strategically positioned on China’s Belt & Road Initiative (BRI) trade route.
– Set to tap into a doubling ecosystem of USD 869 billion EV and automotive market by 2027.
– Allows investors to be a part of the MedTech cluster that has a projected growth of USD 769 billion by 2027.
3. Jazan SEZ: The Industrial Hub for Metal & Food Processing
– Location: Jazan Province, inside the Jazan City for Primary and Downstream Industries (JCPDI)
– Focus Industries:
- Metal Conversion
- Food Processing
- Logistics
What makes it special?
– Sits on the Red Sea shipping route, which handles 13% of global trade including chemicals and construction
– Set to have its own desalination and power plant covering an area of 100 square kilometres
– Part of the USD 1.3 trillion metal conversion market (by 2026).
4. Special Integrated Logistics Zone (SILZ): The Ultimate Logistics Hub
– Location: Near Riyadh International Airport
– Focus Industries:
- Luxury Goods & Precious Metals
- Aerospace & Space Parts
- Pharmaceuticals & Medical Supplies
- Consumer Electronics
What makes it special?
– Plans to double cargo capacity to 4.5M+ tons per year.
– Set to boost non-oil revenues to SAR 45 billion annually by 2030.
– Offers a 50-year tax relief period.
– Plans to increase the GDP contribution of the logistics sector up to 10%.
5. Cloud Computing SEZ: The Kingdom’s Digital Transformation Hub
– Location: King Abdulaziz City for Science and Technology (KACST), Riyadh
– Focus Industries: Cloud Computing & Digital Tech
What makes it special?
– Aims to attract USD 20 billion in cloud investment by 2030.
– Saudi Arabia’s “Cloud First” policy fuels rapid tech adoption.
– Market projected to hit USD 10 billion.
– Plans to become a global leader in cloud technology.
How to Set Up Your Business in a Saudi SEZ?
1. Choose the Right Licensing Authority
– Ministry of Investment (MISA): Handles foreign investor licensing for Ras Al Khair, KAEC, Jazan, and Cloud Computing SEZs.
– General Authority of Civil Aviation (GACA): Responsible for regulating SILZ.
2. Licensing Fees
Fees range from SAR 12,000 to SAR 21,200 for the first year.
Key Benefits Across All SEZs
The Saudi SEZs offer some of the most competitive incentives and business benefits, making it easier for companies to thrive. Here are some of the common ones.
– 5% Corporate Income Tax (up to 20 years).
– 0% Customs Duties on intra-zone trade.
– 0% VAT on transactions between SEZs.
– 0% Withholding Tax on profit repatriation.
– Flexible labor regulations & expat levy exemptions.
– World-class infrastructure & logistics hubs.
SILZ Exclusive Benefits
– 50-Year Tax Relief
– 0% Corporate Income Tax
– VAT & Remittance Tax Exemptions
Why SEZs Are the Future of Business in Saudi Arabia?
Saudi Arabia’s Special Economic Zones are more than just industrial hubs. They are business growth catalysts. Whether you’re in logistics, advanced manufacturing, cloud computing, or maritime industries, these zones are set to boost the Kingdom’s competitiveness and industrial progress, while fortifying its entrepreneurship capabilities, while developing local talent through job opportunities.
If you want to learn more about Special Economic Zones in Saudi Arabia and need company formation services in the KSA, Nimbus Consultancy can help.
At Nimbus Consultancy, we have certified consultants who can guide you through the licensing process, eligibility, and incentives, ensuring you make the most of this game-changing opportunity.