In this Law, an industrial establishment shall refer to any place prepared and equipped for industrial investment to convert raw materials into manufactured or semi-manufactured materials, or convert semi-manufactured materials into fully manufactured materials, and to process, pack and package fully manufactured materials.

Existing or future industrial establishments shall be granted the privileges and exemptions as stipulated in this Law.

The privileges stipulated in this Law shall be granted upon the approval of the project by the Ministry of Industry and Mineral Resources (hereinafter referred to as “the Ministry”); the approval or rejection thereof shall be made pursuant to a reasoned decision by the Minister of Industry and Mineral Resources (hereinafter referred to as “the Minister”) upon the recommendation of the Ministry’s Industrial Technical Office.

Customs duties shall not apply to machinery, tools, and equipment nor their spare parts which are imported for the development of new industrial establishments and the expansion of existing ones, and for the packaging of products. The types and quantities of the items stated in this Article shall be determined pursuant to a decision by the Minister upon the recommendation of the Ministry’s Industrial Technical Office.

Customs duties shall not apply to primary raw materials and semi-manufactured materials as well as packaging bags, cans, and cylinders required by industrial establishments shall be exempt from customs duties, provided that no equivalent items are adequately available in the Kingdom; exemption shall be determined pursuant to a decision by the Minister upon the recommendation of the Ministry’s Industrial Technical Office.

1. The State shall, for a nominal lease fee, provide an industrial establishment with the land needed for the construction of factories and housing for workers and employees the area of which shall be determined by the Ministry. The Ministry shall, in coordination with the relevant municipalities, allocate an area outside the limits of each city from which said land is designated.

2. The lease may not be assigned without the Ministry’s approval.

Subject to this Law and other applicable laws, the Ministry shall recommend to the Council of Ministers the measures it deems appropriate to protect local production, taking into consideration the quality and quantity of local production and consumer’s interest. Said measures shall include the following:

• 1. Limiting the quantity of foreign imports which are equivalent to domestic production or prohibiting such imports.

• 2. Increasing the customs duties on equivalent foreign imports.

• 3. Providing financial subsidies to industrial establishments.

Export duties and other taxes shall not apply to products prepared for export; exemption shall be made pursuant to a Royal Decree issued based on a Council of Ministers Resolution.

The provisions of this Law shall not apply to industrial establishments with special privileges and conditions, except in cases where agreements concluded by said establishments fail to provide for such provisions.

The owner of an industrial establishment shall comply with the following:

• 1. Providing complete and accurate information on the industrial project as required by this Law or any other law.

• 2. Using equipment and machinery and their spare parts that are exempted from customs duties at the factories licensed for such use, and using them for the purpose for which they are exempted.
  3. Providing the Ministry’s authorized employees with access to the industrial project’s premises for technical and industrial inspection to ensure that the exempted materials are used or stored in accordance with this Law.

• 4. Employing Saudi workers and technicians. However, if the need arises to employ non-Saudis, the approval of the Ministry of Human Resources and Social Development shall be obtained.