Saudi Arabia’s Crown Prince and Prime Minister H R H Mohammed bin Salman on Thursday announced that the country will establish four special economic zones (SEZs), one each in Riyadh, Jazan, Ras Al-Khair, and King Abdullah Economic City.
The launch of the new SEZs comes on the heels of several other similar projects in the Kingdom, including the launch of the integrated logistics special zone at King Salman International Airport in Riyadh in November 2022.
Together, these SEZs represent the first phase of the Kingdom’s long-term programme to encourage foreign direct investment, attract the most talented professionals worldwide, and promote entrepreneurship and economic development.
These new SEZs in Saudi Arabia will concentrate on vital growth areas, such as advanced manufacturing, cloud computing, medical technology, and various other sectors. They will offer various benefits to companies, including competitive tax rates, exemptions from customs duties on imports, and 100% foreign ownership.
The Crown Prince said that Saudi Arabia is open for business and welcomes investors from all around the world to see first-hand the historic opportunities offered to them.
“The new special economic zones will significantly impact how business is done in the country, create tens of thousands of jobs, and contribute billions of riyals to our gross domestic product,” the Crown Prince said.
These special economic zones will be regulated by the Economic Cities and Special Zones Authority (ECSZA) and will provide attractive financial incentives, world-class infrastructure, and business-friendly regulations to investors.
SEZs New Centres for Businesses
The Kingdom’s strategic location will be utilised by the zones to establish new centres for businesses across significant growth sectors. The aim is to enable these companies and technologies to launch and expand, thereby contributing to shaping the future.
The Saudi government also said that these zones will reinforce national strategies and establish fresh connections with global frameworks. They will capitalise on the distinct advantages of each region of the country to support critical sectors, such as logistics, advanced manufacturing, technology, and other priority areas.
Companies operating within these zones will benefit from competitive corporate tax rates, exemption from customs duties on imports, production inputs, machinery, and raw materials, 100% foreign ownership of companies, and the flexibility to attract top talent from around the world.
Additionally, these zones will provide enormous opportunities for local economic development, employment generation, and the localization of supply chains, according to officials. They believe that the zones are an extension of long-term initiatives aimed at transforming the Kingdom into a global investment destination and a significant hub for global supply chains, leveraging its position at the core of global trade routes.
ECSZA chairman Khalid Al-Falih, who is also Saudi Arabia’s Minister of Investment, said that the launch of the four special economic zones will provide foreign investors with an opportunity to have a stake in the world’s fastest growing economy.
The King Abdullah Economic City (KAEC) SEZ is a premier location for advanced manufacturing and logistics, situated on the Red Sea and providing access to global trade routes through King Abdullah Port. Lucid, a player in the EV industry, will produce 150,000 EVs a year from its base in KAEC SEZ.
Jazan SEZ is an industrial centre with access to the largest port in the region for import and export, providing opportunities for manufacturing, processing, and distribution of food products.
Ras Al-Khair SEZ is a launchpad for the maritime industry, with opportunities in shipbuilding and repair, offshore drilling, and maritime value chains.
The Cloud Computing SEZ in King Abdulaziz City for Science and Technology (KACST) serves as a hub for emerging and disruptive technologies and allows investors to establish physical data centres and cloud computing infrastructure in multiple locations within the Kingdom. These SEZs demonstrate the Kingdom’s commitment to digital innovation and economic growth.