The Kingdom of Saudi Arabia creates four new special economic zones
Special Economic Zones are geographically defined areas that facilitate certain economic activities such as investment, trade and employment by providing competitive advantages and legal frameworks that are different from the base economy.
The main goal of creating a free economic zone in Saudi Arabia is to attract investors from all over the world to implement the ambitious plans of this Kingdom. It is planned to create tens of thousands of new jobs and invest billions in the gross domestic product. Special economic zones will focus on technology projects, logistics, advanced manufacturing and other important areas of the Kingdom. In the long term, the Kingdom will turn into a global investment hub that will attract supply routes from all over the world.
- SEZ of King Abdullah Economic City (KAEC). 60 km2 has been allocated for this economic zone. Located just 1.5 hours from Jeddah Airport. The main advantage of KAEC is the port of King Abdullah, which was recognized by the World Bank as the most efficient in the world in 2022. It is planned to produce up to 150,000 electric cars per year. Also, medical technologies, information and communication technologies will be developed in the zone and consumer goods will be produced.
- FEZ Jazan. It is located in the south of Saudi Arabia in the most fertile part of the Kingdom. It is planned to produce food and provide food to the nearby regions of Africa and Asia thanks to the largest port in the region.
- FEZ Ras Al-Khair. Focused on the maritime industry, in particular shipbuilding, repair and seabed drilling. At the moment, 40% of the SEZ has already been reserved by investors.
- Cloud Computing SEZ located in King Abdulaziz City of Science and Technology (KACST). The Kingdom relies on the development of digital technologies and innovations in this area. The zone is based on an innovative hybrid model that allows investors to set up physical data centers and cloud computing infrastructure at multiple locations in the Kingdom.
To attract foreign companies to the SEZ, Saudi Arabia offers:
- Competitive corporate tax rates – 5% up to 20 years
- Tax on repatriation of profits to other countries – 0%
- Customs duties on imports – 0%
- Value added tax when trading within the zone or between zones – 0%
- Possibility of 100% foreign ownership
- Production resources, availability of machinery and raw materials
- Flexibility in hiring the best specialists around the world. There are no fees for formalizing labor relations with foreigners and legalizing the stay of their families
- Full support for the investment process through one-stop-shop “OSS” through which applications for participation in the SEZ are accepted and comprehensive support is provided in the field of real estate, licensing, business registration, employment, legal services and assistance with living.
Conclusion: The Kingdom of Saudi Arabia loudly declares its economic ambitions to the whole world and invests huge sums to realize these plans and attract investors from all over the world. The four new Special Economic Zones offer a very attractive environment for global businesses, providing unique benefits, conditions and ease of entry into the Saudi Arabian market. It is expected that the Kingdom will soon become a business mecca in the field of entrepreneurship, an investment hub into which supply chains from all over the world will flock.