1‏- The Regulation aims to regulate the licensing of facilities in the Zone, govern their real estate and security affairs, and establish Regulations for the management, operation, and establishment of Deposit and Re-Export Zones, in accordance with Article (21) of the Statute and the related provisions of the Statute and the Implementing Regulation, while taking into account the nature of the Zone.

2‏- The provisions of this Regulation shall apply to the Authority, the concerned entity, the competent authority, Investors, licensed facilities, operators of the Deposit Zone or Re-Export Zone, and others who conduct an activity in the Zone.

1‏- No Qualified Activity may be carried out in the Zone except after obtaining a License from the Competent Authority in accordance with the provisions of the Statute and the Regulation.

2‏- The License shall apply to carrying out the Qualified Activity within the Zone. If the Investor wishes to carry out activities outside the Zone, the Investor shall comply with the applicable statutory procedures in the other regions of the Kingdom.

1‏- The competent authority, exclusively, shall issue the licenses, permits, or approvals necessary to conduct the qualifying activity in the Zone.

2‏- The competent authority shall prepare a guide containing the conditions, procedures, and requirements necessary for licensing, permitting, or approving the conduct of the qualifying activity in the Zone, in accordance with the requirements set out in Article (Eight) of the Regulation.

• 1‏- The competent authority shall issue the licenses necessary to conduct the qualified activity after verifying compliance with the following regulations:

  • A- The investor shall submit the necessary requirements specified by the competent authority in the Licensing Manual.

  • B- The company branch—Saudi or foreign—shall submit the following requirements:

    • • The Commercial Register document of the parent company, its Articles of Association, and the address of its headquarters.
    • • A resolution of the authorized persons approving the opening of a branch within the region, which shall include the following:
    • • The activity.
    • • The branch name.
    • • The branch manager.
    • • The branch region.

  • C- The agent shall submit a duly certified and notarized legal power of attorney.

  • D- The investor shall submit a statement evidencing the availability of the technical competence and financial capacity to conduct the qualified activity.

  • E- The investor shall submit a business plan, and the competent authority shall specify the necessary requirements therefor in the Licensing Manual.

• 2‏- The competent authority shall provide the Authority—periodically—with the licenses, documents for assessing the eligibility criteria, and the results thereof in the region.

• The competent authority shall assess investors based on the eligibility criteria specified for the Zone pursuant to Council of Ministers Decision No. (233) dated 29/3/1444 AH, as follows:

  • 1- The licensed establishment shall, throughout the term of its license, achieve the minimum capital expenditure out of the investment volume during the first five years in each of the following sectors:

    • A- Mineral processing: (two million five hundred thousand) riyals.
    • B- Food manufacturing: (one million five hundred thousand) riyals.
    • C- Logistics services: (two million) riyals.

  • 2- The licensed establishment shall, throughout the term of its license, meet the minimum percentage of Saudi nationals in its workforce.

  • 3- The competent authority shall verify the licensed establishment’s compliance with the quantitative eligibility criteria set out in paragraphs (1) and (2) of this Article, and shall also verify that investors’ projects meet the qualitative criteria in the Zone in a manner that achieves the following:

    • A- Reducing migration from other regions of the Kingdom.
    • B- Reducing the risks of unfair competition with other regions of the Kingdom.
    • C- Developing talent distinguished by high-level skills.
    • D- Contributing to the level of product sophistication.
    • E- Assessing the credibility and commitment of investors.
    • F- Giving priority to investors seeking to deepen value chains within other regions of the Kingdom.

  • 4- The competent authority may propose targeted sectors in the Zone and submit them to the Authority to complete the statutory procedures.

• The licensed entity shall enjoy the exemptions and incentives granted to the Zone pursuant to Council of Ministers Decision No. (233) dated 29/3/1444 AH, as follows:

  • 1- Corporate income tax (5%) for licensed entities in the Zone for a period of (20) years.

  • 2- Exemption from withholding tax for licensed entities in the Zone.

  • 3- No customs duties shall be due on goods introduced into the Zone that relate to the licensed qualified activity and are placed under one of the customs-duty suspension arrangements pursuant to the Unified Customs Law of the GCC States, issued by Royal Decree No. (M/41) dated 3/11/1423 AH.

  • 4- Value-added tax shall be applied at the rate of zero percent (0%) to goods supplied from other areas of the Kingdom to the licensed entity in the Zone. This includes supplies of goods made between licensed entities within the Zone and other Special Economic Zones, subject to the following:

    • A- The goods must be under a customs-duty suspension arrangement.
    • B- The goods must be related to the activities of the licensed entity.

  • 5- Supplies of goods imported into the Zone from outside the Kingdom shall be deemed to be outside the scope of value-added tax, subject to the following:

    • A- The goods must be under a customs-duty suspension arrangement.
    • B- The goods must be related to the activities of the licensed entity.

  • 6- Exemption from the financial consideration payable in respect of workers of the licensed entity and their dependents in the Zone.

  • 7- Reduction of the localization rate for jobs in the Zone as follows:

    • A- From the first year to the fifth year, the localization rate shall be (0%).
    • B- From the sixth year to the tenth year, the localization rate shall be (15%).
    • C- From the eleventh year to the fifteenth year, a gradual transition shall be made to the localization requirements in accordance with the flexibility afforded to investors.

  • 8- The Exemptions and Incentives Guide issued by the Authority—in accordance with Article (Thirty-Two) of the Implementing Regulations—shall set out the details necessary for implementing the provisions related to exemptions and incentives.