Decision No. (468) dated 1447/07/10 AH
The Council of Ministers
After reviewing in its session chaired by the Custodian of the Two Holy Mosques King Salman bin Abdulaziz Al Saud, the correspondence received from the Royal Court No. 48335 dated 1447/6/13 AH, including the telegram of His Excellency the Minister of Investment, Chairman of the Board of the Economic Cities and Special Zones Authority No. 6862 dated 1446/9/28 AH, regarding the draft regulatory bylaws for the special economic zones.
After reviewing the aforementioned draft regulatory bylaws.
After reviewing theStatute of the Economic Cities and Special Zones Authority, issued by Royal Order No. (A/19) dated 1431/3/10 AH.
After reviewing theCompanies Law, issued by Royal Decree No. (M/132) dated 1443/12/1 AH.
After reviewing the two laws ofCommercial Register andTrade Names, issued by Royal Decree No. (M/83) dated 1446/3/19 AH.
After reviewing Council of Ministers Decision No. (233) dated 1444/3/29 AH.
After reviewing memoranda No. (2580) dated 1445/7/17 AH, No. (4200) dated 1445/12/6 AH, No. (2246) dated 1446/6/25 AH, No. (3791) dated 1446/11/20 AH, No. (793) dated 1447/2/23 AH, No. (1626) dated 1447/4/30 AH, and No. (2385) dated 1447/6/27 AH, prepared by the Bureau of Experts at the Council of Ministers.
After considering Shura Council Decision No. (11/133) dated 1447/6/10 AH.
After reviewing the recommendation of the General Committee of the Council of Ministers No. (7357) dated 1447/7/8 AH.
It is decided as follows:
First: Approval of the regulatory bylaws for the special economic zones of (Jazan, andCloud Computing Information Technology, andKing Abdullah Economic City,and Ras Al Khair), in the attached formats.
Second: Exempting the companies licensed to practice activities in the special economic zones - referred to in paragraph (First) of this decision - from the provisions of the Companies Law, issued by Royal Decree No. (M/132) dated 1443/12/1 AH, and the two laws of the Commercial Register and Trade Names, issued by Royal Decree No. (M/83) dated 1446/3/19 AH.
Third: The Economic Cities and Special Zones Authority - in coordination with the Ministry of Commerce - shall issue the necessary rules related to the companies licensed to practice activities in the special economic zones - referred to in paragraph (First) of this decision - their governance, and the related rights, duties, obligations, and responsibilities in this regard.
A draft Royal Decree has been prepared for what is contained in paragraph (Second) above, its text is attached hereto.
Salman bin Abdulaziz Al Saud
Regulation of the Special Economic Zone of Jazan
Chapter 1: General Provisions
Article 1: Definitions
1- The following words and phrases shall have the meanings indicated opposite each of them, unless the context requires otherwise:
Kingdom: The Kingdom of Saudi Arabia.
Authority: Economic Cities and Special Zones Authority.
Council: The Board of Directors of the Authority.
Statute: The Statute of the Authority issued by Royal Order No. (A/19) dated 10/3/1431 AH, and any amendments thereto.
Regulation: The Regulatory Regulation of the Special Economic Zone of Jazan.
Concerned Entity: The Royal Commission for Jubail and Yanbu.
Competent Entities: The government agency with jurisdiction, in accordance with the provisions of the Regulation.
Zone: The Special Economic Zone of Jazan established pursuant to Council of Ministers Decision No. (233) dated 29/3/1444 AH.
Establishment Licensed: Any establishment licensed to practice activities in the Zone pursuant to the Regulation and its derived rules and decisions.
Exemptions and Incentives: The exemptions and incentives granted to the Zone pursuant to Council of Ministers Decision No. (233) dated 29/3/1444 AH, and any amendments thereto or its replacement.
Employee: Any natural person working for the benefit of the licensed establishment in the Zone, under its management and supervision in return for a wage, even if he is away from its oversight.
Tax System: All tax legislations in force in the Kingdom, including laws, regulations, rules, instructions, international tax agreements, and any amendments thereto.
Customs System: All customs legislations in force in the Kingdom, including laws, regulations, rules, instructions, international agreements, and any amendments thereto.
Law of Zakat Collection: The Law of Zakat Collection issued by Royal Decree No. (17/2/28/8634) dated 29/6/1370 AH- andits executive regulations and any amendments thereto..
Uniform Customs Law: The Uniform Customs Law of the GCC countries, issued by Royal Decree No. (M/41) dated 3/11/1423 AH, its executive regulations and any amendments thereto.
Other Regions of the Kingdom: All regions of the Kingdom except the Special Economic Zones.
Activities: Activities qualified to obtain the exemptions, incentives, and exceptions approved for the Zone.
2- In matters not specifically addressed, the same meanings set forth in the Statute shall apply to the words and phrases stipulated in the Regulation.
Article 2: Objective of the Regulation
The regulation aims to organize the works of the area and its activities in a manner that contributes to achieving its objectives, in accordance with the geographical location and maps approved pursuant to the relevant Council of Ministers' resolutions.
Article 3: Powers of the Competent Authority
The competent authority exercises the powers granted to it pursuant to the statute and the regulation.
Article 4: Issuance of Licenses
1- The competent authority - and no other - issues the licenses, permits, or approvals necessary to practice activities in the area.
2- The competent authority shall prepare a guide that includes the conditions, procedures, and requirements necessary for licensing, permitting, or approving the practice of activities in the area in accordance with the provisions of the statute, regulation, and regulations established by the authority, as well as the specific capacity standards of the area.
Chapter 2: Zakat, Taxes, and Customs
Article 5: Zakat and Taxes
Subject to exemptions and incentives, the licensed establishment shall be treated in terms of Zakat and taxes as follows:
1- The licensed establishment shall be subject to income tax, in accordance with the provisions regulating this under the tax law.
2- The provisions of the Law of Zakat Collection shall not apply to the licensed establishment.
3- The licensed establishment shall be exempt from withholding tax regulated under the tax law.
Article 6: Value Added Tax
1- A zero percent value-added tax - regulated under the tax system - shall apply to goods supplied from other regions of the Kingdom to the licensed establishment in the zone. This includes supplies of goods made between licensed establishments within the same zone, or between licensed establishments in different special economic zones, provided that the following two conditions are met:
A- That such goods are under customs suspension status, in accordance with the provisions regulating this under the customs system.
B- That such goods are related to the activities licensed for the establishment to practice in the zone, provided that the Authority, in agreement with the Zakat, Tax, and Customs Authority, sets the necessary standards for this.
2- Supplies of goods imported into the zone from outside the Kingdom shall be considered outside the scope of value-added tax - regulated under the tax system - provided that the following two conditions are met:
A- That such goods are under customs suspension status, in accordance with the provisions regulating this under the customs system.
B- That such goods are related to the activities licensed for the establishment to practice in the zone.
Article 7: Customs Duties
Customs duties are imposed on goods imported into the licensed facility in the zone and related to the activities, which are placed under one of the suspended customs duty statuses according to the Unified Customs Law.