KAS: Establishment of new special economic zones
The Kingdom of Saudi Arabic (“KSA”) Government recently announced establishment of four new Special Economic Zones (“SEZ”), developed and designed to:
- Transform the economy of the KSA;
- Compliment existing strengths in the KSA’s economy and create new investment opportunities
- Achieve KSA’s Vision 2030 for growth and innovation
Below we highlight on the newly established zones and the focused industries for the respective SEZ:
|
Special Economic Zones |
Focused Industries |
|
King Abdullah Economic City SEZ |
- Automobile supply chain and assembly - Consumer goods - ICT (Electronic light manufacturing) - Pharmaceuticals - MedTech - Logistics |
|
Ras Al-Khair SEZ |
- Shipbuilding and MRO - Rig platforms and MRO |
|
Jazan SEZ, |
- Food Processing - Metal conversion Logistics |
|
Cloud Computing SEZ, Riyadh |
- Cloud Computing Services |
Notable incentives provided for businesses in the newly developed SEZ
- 5% Corporate Income tax for upto 20 years
- 0% withholding tax for repatriation of profits from SEZ into foreign countries;
- 0% Customs duties deferral for goods inside SEZ;
- 0% Custom duties on capital equipment and inputs inside SEZ;
- Flexible and supportive regulations around foreign talent during the first 5 years;
- 0% VAT for all intra-SEZ goods exchanged within and between the SEZs;
- Exemption from expat levy ensuring fees for employees and their families in the SEZ etc.
Key takeaways
- The KSA government is taking steps to attract and encourage foreign direct investment to achieve the economic goals of the country.
- Businesses must identify
and explore these opportunities for growth and expansion.
