KSA Establishment of new special economic zones

KAS: Establishment of new special economic zones

KSA 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.

Contact Us

Markus Susilo
Markus Susilo
Partner- Payroll and Indirect Tax
Michel Ruitenberg
  Partner DIFC - Indirect Taxes