1‏- The Regulation aims to establish regulations for licensing establishments in the Zone pursuant to Article (21) of the Statute and the related provisions thereof in 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 entity, investors, licensed establishments, and any other persons engaging in an activity in the Zone.

1‏- The qualified activity may not be conducted in the Zone unless a license has been obtained from the competent authority -and no other authority- in accordance with the provisions of the Implementing Regulation and the Regulation.

2‏- The license shall apply to the conduct of the qualified activity within the Zone. If the Investor wishes to conduct activities outside the Zone, the Investor shall fulfill the statutory procedures applicable in the other regions of the Kingdom.

1‏- The competent authority—exclusively—shall issue the licenses, permits, or approvals necessary to carry out the qualifying activity in the zone.

2‏- The competent authority shall prepare a guide setting out the conditions, procedures, and requirements necessary for licensing, permitting, or approving the carrying out of the qualifying activity in the zone, in accordance with the requirements set forth 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 License Guide.

  • 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, including the following:
    • • The activity.
    • • The name of the branch.
    • • The branch manager.
    • • The branch region.

  • C- The Agent shall submit a duly authenticated and notarized legal power of attorney.

  • D- The Investor shall submit a statement evidencing the availability of the technical competence and financial capacity required 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 License Guide.

• 2‏- The competent authority shall provide the Authority -periodically- with the licenses, documents for evaluating 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, meet the minimum requirements for the following:

    • A- With regard to the volume of investments, the minimum capital expenditure (million riyals) during the first five years.
    • B- With regard to the investment share in research and development activities as a percentage of fixed assets, a minimum of (1.5%).

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

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

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

• 1‏- The licensed establishment shall benefit from the exemptions and tax treatments granted to the Zone pursuant to Council of Ministers Resolution No. (233) dated 29/‏3‏/1444 AH, as follows:

  • A- Characterization of payments related to the activities of the Zone that are made to related persons in accordance with the principles of the Organisation for Economic Co-operation and Development.
  • B- Application of the principles set out in the Organisation for Economic Co-operation and Development Commentaries with respect to payments to persons residing in countries that have agreements for the avoidance of double taxation with the Kingdom, particularly with respect to the permanent establishment.
  • C- The existence of a deemed permanent establishment shall not be considered to result from the use or storage of data in data storage centres in the Kingdom.
  • D- Application of the mutual agreement procedure as a means of resolving tax disputes where an agreement for the avoidance of double taxation exists.
  • E- Allowing the deduction of expenses paid to related persons, provided that they comply with the Transfer Pricing Guidelines.
  • F- Exemption from the financial consideration payable for employees of the licensed establishment and their accompanying persons in the Zone.

• 2‏- The Guide to Exemptions and Incentives issued by the Authority, pursuant to Article (Twenty-Nine) of the Regulatory Regulations, shall set out the details necessary to implement the provisions related to exemptions and incentives.