1‏- The Regulation aims to establish regulations for licensing establishments in the Zone and governing their real estate and security affairs, and to establish regulations for the management, operation, and establishment of Deposit and Re-Export Areas, in accordance with 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 authority, Investors, licensed establishments, operators of the Deposit Area or Re-Export Area, and any other persons conducting an activity in the Zone.

1‏- No Qualified Activity may be conducted in the Zone except after obtaining a License from the Competent Authority—in coordination with the Authority—in accordance with the provisions of the Regulatory Regulations 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 complete the applicable statutory procedures in the other regions of the Kingdom.

• 1‏- The competent authority, in coordination with the Authority, shall issue the licenses, permits, or approvals necessary to conduct the qualified activity in the Region, in accordance with the following mechanism:

  • A- The competent authority shall receive license applications for conducting the qualified activity within the Region and verify that they satisfy the general regulations.
  • B- The competent authority shall refer the application to the Authority, including its recommendation for approval or rejection and the reasons therefor, after reviewing it and verifying fulfillment of the requirements.
  • C- The Authority shall review the application referred to it and verify its compliance with the regulatory frameworks within a period of (5) days from the date of receipt of the application. It may extend this period for a similar period, and may request any additional information or documents, in coordination with the competent authority, before issuing its decision to approve or reject the application.
  • D- If the Authority deems it appropriate to grant the license, the competent authority shall issue the license and complete the procedures related thereto.
  • E- If the Authority does not approve the granting of the license, the competent authority shall notify the applicant of the decision, stating the reasons for rejection.

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

• 1‏- The concerned entity, in coordination with the 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 concerned entity in the License Guide.

  • B- The company branch, whether 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 person in the company approving the opening of a branch within the zone, including the following:
    • • The activity.
    • • The branch name.
    • • The branch manager.
    • • The branch zone.

  • 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 concerned entity shall specify the necessary requirements therefor in the License Guide.

• 2‏- The concerned entity shall provide the Authority -periodically- with the licenses, documents for evaluating the eligibility standards, and the results thereof in the zone.

• The competent authority shall assess investors based on the eligibility criteria specified for the Zone pursuant to Council of Ministers Resolution 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 from the amount of investments—during the first five years—in each of the following sectors:

    • A- Industry: (one million five hundred thousand) riyals.
    • B- Logistics services: (two million) riyals.
    • C- Construction: (two million) riyals.

  • 2- The licensed establishment shall—throughout the term of its license—satisfy the minimum proportion of the establishment’s workforce consisting of Saudi nationals.

  • 3- The competent authority shall, in coordination with the Authority, 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 satisfy 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 advanced skills.
    • D- Contributing to the level of product complexity.
    • E- Assessing investors’ credibility and commitment.
    • 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 for completion of the statutory procedures.

• The licensed establishment 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 establishments in the Zone for a period of (20) years.

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

  • 3‏- Customs duties shall not be due on goods introduced into the Zone that are related to the licensed qualifying activity carried out and placed under one of the customs duty suspension regimes in accordance with the GCC Common Customs Law, issued by Royal Decree No. (M/41) dated 3/‏11‏/1423 AH.

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

    • A- The goods are under a customs duty suspension regime.
    • B- The goods are related to the activities of the licensed establishment.

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

    • A- The goods are under a customs duty suspension regime.
    • B- The goods are related to the activities of the licensed establishment.

  • 6‏- Exemption from the financial fee for employees of the licensed establishment and their accompanying persons 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, gradual transition to the localization requirements shall take place according to the flexibility provided to investors.

  • 8‏- The Exemptions and Incentives Manual issued by the Authority, pursuant to Article (Thirty-Three) of the Regulatory Bylaws, shall set out the details necessary for implementing the provisions related to exemptions and incentives.