Comprehensive Report on the Saudi Authority for Industrial Cities and Technology Zones (MODON): A Comprehensive Investor's Guide
Introduction
The Saudi Authority for Industrial Cities and Technology Zones, known as "MODON," is a cornerstone of the industrial and economic landscape of the Kingdom of Saudi Arabia. MODON was established as an independent public authority with its main headquarters in Riyadh, and it has the authority to establish branches in various cities across the Kingdom to ensure broad and effective coverage.
MODON actively contributes to enhancing the Kingdom's openness to the global arena, serving as an influential member of the G20 and a partner in shaping international economic policies.
1. Definition of "MODON" and its Scope of Work
1.1. What is the Saudi Authority for Industrial Cities and Technology Zones?
"MODON" is the government entity responsible for the development and management of industrial cities and technology zones in the Kingdom of Saudi Arabia. The Authority enjoys an independent legal personality and is administratively affiliated with the Minister (currently the Minister of Industry and Mineral Resources). Its main headquarters is in Riyadh, and it has the authority to establish additional branches in other cities across the Kingdom to expand its scope of work.
The Authority's Board of Directors consists of a diverse composition that ensures broad representation of relevant sectors. The Board is chaired by the Minister of Commerce and Industry (formerly, now the Minister of Industry and Mineral Resources) and includes representatives from vital ministries such as the Ministry of Commerce and Industry, the Ministry of Municipal and Rural Affairs, the Ministry of Finance, the Ministry of Economy and Planning, the Ministry of Communications and Information Technology, in addition to a representative from King Abdulaziz City for Science and Technology, a representative from the General Investment Authority, and the Director General of the Authority. The Board also includes six members from the private sector, appointed by a Cabinet decision based on the Minister's proposal and in consultation with the Saudi Chamber of Commerce and Industry Council.
MODON relies on diverse financial resources to fund its operations and develop its projects. These sources include all movable and immovable assets transferred to the Authority from the Ministry of Industry and Electricity. Additionally, the Authority generates income from its activities, such as collecting 20% annually of the total revenues obtained by developers or operators for developing or operating designated industrial cities established on government lands, with the possibility of reviewing this percentage by the Council of Ministers. Financial resources also include fees for studying applications for industrial city development or operation licenses, proceeds from the sale of lands within designated industrial cities, and returns from investing the Authority's funds. MODON also accepts any other funds approved by the Council, such as donations, grants, and subsidies, as well as government subsidies provided to the Authority.
1.2. Organizational Structure and Objectives of "MODON"
MODON assumes comprehensive responsibility extending from planning and construction to the management, operation, and maintenance of designated industrial cities.
Licenses for developing and operating designated industrial cities include vital aspects to ensure an integrated and efficient industrial environment. This includes defining land uses within the industrial city and the developer's or operator's commitment to providing essential infrastructure, facilities, and necessary services within the industrial city and maintaining them efficiently.
1.3. Number of Industrial Cities and Technology Zones in the Kingdom
MODON currently oversees 36 existing and under-development industrial cities distributed throughout the Kingdom of Saudi Arabia.
The industrial cities under MODON include more than 4,000 factories, distributed among productive factories, existing factories, and factories under construction, in addition to 6,587 industrial and investment sites.
To provide a historical perspective, in 2014, MODON oversaw 33 industrial cities comprising 2,551 productive factories and 500 factories under construction.
Geographically, industrial areas in Saudi Arabia are divided into three main sections, each comprising a number of important industrial cities
Central Sector: Includes Riyadh First Industrial City, Riyadh Second Industrial City, Sudair City for Industry and Business, and MODON Oasis in Qassim.
3 Eastern Sector: Includes Dammam First Industrial City, Dammam Second Industrial City, MODON Oasis in Al-Ahsa, Hafr Al-Batin Industrial City, MODON Oasis in Al-Jouf, Wa'ad Al-Shamal Industrial City, and Arar Industrial City.
3 Western Sector: Includes MODON Oasis in Jeddah, Rabigh Industrial City, Madinah Industrial City, and MODON Oasis in Yanbu.
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This geographical distribution of industrial cities reflects a national strategy for comprehensive and balanced industrial development across various regions of the Kingdom. This expansion is not limited to increasing the number of factories but also represents a conscious effort to boost economic activity in less developed areas, contributing to local job creation and sustainable regional development. This focus on balanced development reduces economic concentration in major cities and supports the geographical diversity of industries.
MODON adopts a strong public-private partnership model, evident in its board of directors' structure, which includes private sector representatives, and in its revenue model, which relies on a percentage of private developers' and operators' revenues.
Furthermore, MODON demonstrates a deep commitment to sustainability and environmental responsibility. In addition to its efforts to localize 13 of the UN Sustainable Development Goals, the Authority invests in environmental projects such as artificial lakes and imposes strict environmental monitoring systems on factories.
2. "MODON" Services and Products
MODON offers a comprehensive suite of services and products designed to support investors and facilitate their industrial and investment journey within industrial cities and technology zones. These services aim to build sustainable and successful partnerships and provide an attractive investment environment.
2.1. Key Services Provided to Investors
The products and services offered by MODON include
Industrial Lands: MODON provides industrial and service lands with advanced infrastructure at competitive and reduced prices, which lowers initial costs for investors.
Ready-Built Factories: To meet the needs of small and medium-sized enterprises, MODON provides fully constructed industrial units. It also offers innovative products, including small factories and multi-story factories, providing greater flexibility in space and design.
Logistics Products: MODON allocates lands for lease for logistics purposes, such as warehouses and storage facilities, to support supply chains and logistics services for factories.
Service and Investment Products: This category includes lands designated for lease for various service and commercial purposes, such as commercial complexes, bank branches, ATMs and remittance centers, restaurants, entertainment projects, health facilities, and training centers. These services aim to provide a comprehensive environment for workers and investors within industrial cities.
Financing Solutions: MODON collaborates with leading financing entities such as the Saudi Industrial Development Fund and the Social Development Bank (through the "Asas" product) to provide the best financing solutions for investors, including industrial loans and logistics land loans.
Investment Opportunities: MODON offers a diverse range of investment opportunities across various sectors, enabling investors to explore new areas for expansion.
Non-Financial Care Services: MODON provides non-financial support to incubated establishments, in addition to providing custom-designed buildings (on-demand) for high-value-added investments, reflecting flexibility in meeting the specific needs of major projects.
Incentive Package for Investors: This package includes multiple incentives to enhance investment attractiveness, such as a fast track for application review (which can be completed within 6 weeks), and post-contract signing services to support the investor when needed. High-value-added projects are also granted a grace period (payment deferral) for the annual financial fee of up to 24 months for industrial land products, in addition to reduced rental fees (a discount of up to 15% on ready-built factories).
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2.2. Digital Solutions and Electronic Services
In response to the National e-Transaction Plan and with the aim of providing integrated services that meet investors' needs, MODON offers a distinguished set of electronic systems and services that put the customer at the center of attention.
The most prominent of these digital solutions and services include:
Shareek System: The "Shareek" system is an integrated electronic portal designed to reduce the cost of transactions with MODON for all partners, including investors and others. This system contributes to improving procedural operations and raising their efficiency, leading to a reduction in the time and effort required to complete transactions.
5 Suppliers Portal: To enhance the quality of its investment environment, MODON launched a dedicated electronic portal for suppliers. This portal aims to promote effective communication with suppliers, contributing to improved overall performance rates and faster service delivery.
5 MODON Maps (GIS): To provide the maximum possible information and data to its partners, MODON has implemented a Geographic Information System (GIS). This system includes all maps and survey information related to the industrial cities overseen by the Authority, enabling partners to access accurate and detailed data on available locations and infrastructure.
5 Consulting Office Qualification: This electronic service allows engineering offices to register in MODON's list of approved offices for the purpose of supervising the Authority's projects. This ensures the quality of engineering and consulting work within industrial cities.
6 Contractor Qualification: This service enables contractors to submit qualification requests to undertake construction and development work for factories within industrial cities. After the request is approved, contractors can offer their services to MODON's partners.
6 Operating and Completion of Construction Licenses: This service provides the ability to manage operating and completion of construction licenses electronically, making it easier for investors to obtain the necessary permits to start and operate their factories.
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These digital solutions contribute to simplifying the investor's journey, from the initial application stage to the full operation of the factory, enhancing the efficiency of the business environment and making investment in MODON's cities more attractive.
3. Registration and Service Activation Procedures in "MODON"
MODON offers simplified procedures for registration and service activation, with a focus on electronic channels to facilitate access for investors and partners.
3.1. Steps for Registration in "MODON"
To register on MODON's platforms and benefit from its services, the following steps can be followed
Visit the Website: Start by visiting MODON's official website or the dedicated registration platform.
Click on the Registration Link: Look for the "Register Now" or "Start Service" icon or link and click on it.
Fill in Required Data: Registration requires filling out an electronic form with basic information such as name, date of birth, mobile number, and email. You may also be asked questions about your knowledge of the Authority.
Submit the Request: After filling in the data, click the submit button.
Confirm Registration: An email or text message will be sent to confirm registration within one day.
Activation Code and Platform Access: Within a few days, an email will arrive with an activation code and a link to access the platform. Log in using the link and enter the activation code.
Create Player Code (on some platforms): Some sub-platforms, such as "MODON Tech," may require creating a special player code, which must be kept for re-login.
In addition to initial registration, some services require the submission of specific documents, such as:
Commercial registration.
A comprehensive feasibility study (technical and financial).
Copies of previous projects (if any).
Environmental Information Report (EIR) in case of applying for hazardous or medical waste treatment facilities.
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The application must be submitted by the project owner or someone related to the project, and all applications are subject to MODON's policies and requirements regarding the type of activity and available location in each industrial city. Compliance with the general environmental system, executive regulations, and safety systems is also required.
3.2. Activating Services in "MODON"
After initial registration, services are activated through the "Shareek" system, which is the main portal for managing transactions with MODON. This system allows investors to access and manage a wide range of electronic services efficiently.
Services that can be activated and managed through the "Shareek" system include
Consulting Office Services Management: Activating and tracking consulting office qualification requests.
Coordination Letters and Permits Management: Obtaining necessary permits for various works and activities.
Electricity Connection Services: Activating requests for connecting and operating electricity for facilities.
Contract Services: Managing and updating contracts, including reopening contracts, updating contract data, merging contracts, renewing them, amending them, closing them, and separating them.
Chemical Disclosure Requests: Enabling investors to disclose and register hazardous materials.
Various Work Permits: Such as excavation permits, 24-hour work permits, and commercial shop licenses.
Building and Operating Licenses: Submitting and managing building and operating license applications.
Contractor Qualification Services: Managing contractor qualification requests for construction and development work.
Violation Correction: Following up and correcting any violations that may arise.
Electronic Auction: Participating in auctions for land and site allocation.
Activating many of these services requires settling financial dues on the contract before submitting the application, ensuring that the factory is productive, and correcting any previous construction or legal violations.
4. Costs and Fees in "MODON"
MODON is committed to providing the best services at competitive prices, making the cost of industry in its industrial cities among the best locally, regionally, and globally. This cost is one of the investment advantages it offers to its partners.
4.1. Prices for Industrial Lands and Ready-Built Factories
Fees vary depending on the type of industrial or service product, the industrial city, location, and area.
First: Industrial Lands
Costs include the annual financial fee and the allocation fee for general industrial lands. The allocation fee is paid monthly for 24 months or as a one-time payment, and payment stops upon the start of production.
| Industrial City | Annual Financial Fee (SAR/m²) | Allocation Fee (SAR/m²) | Allocation Fee Payment Period (for new lands) |
|---|---|---|---|
| Riyadh First | 5 | 50 | One-time |
| Riyadh Second | 4 | 50 | One-time |
| Riyadh Third | 5 | 25 | One-time |
| Sudair | 2 | 0.5 | Monthly |
| Qassim First | 4 | 1 | Monthly |
| Qassim Second | 2 | 0.5 | Monthly |
| MODON Oasis Qassim | 4 | 12 | One-time |
| Al-Kharj | 2 | 0.5 | Monthly |
| Zulfi | 1 | 5 | One-time |
| Dhurma | 3 | 1 | Monthly |
| Shaqra | 1 | 5 | One-time |
| Ha'il | 4 | 0.5 | Monthly |
| Jeddah First | 5 | 50 | One-time |
| Jeddah Second & Third | 3 | 1 | Monthly |
| MODON Oasis Jeddah | 5 | 2 | Monthly |
| Makkah | 4 | 50 | One-time |
| Madinah | 4 | 1 | Monthly |
| Asir | 3 | 1 | Monthly |
| Tabuk | 1 | 5 | One-time |
| Najran | 1 | 5 | One-time |
| Al-Baha | 1 | 5 | One-time |
| Jazan | 1 | 5 | One-time |
| Dammam First | 5 | 50 | One-time |
| Dammam Second | 4 | 50 | One-time |
| Dammam Third | 3 | 1 | Monthly |
| Al-Ahsa First | 4 | 1 | Monthly |
| MODON Oasis Al-Ahsa | 3 | 12 | One-time |
| Arar | 1 | 5 | One-time |
| Hafr Al-Batin | 1 | 5 | One-time |
| Wa'ad Al-Shamal | 1 | 5 | One-time |
| MODON Oasis Al-Jouf | 1 | 12 | One-time |
| Makkah Second | 4 | 12 | One-time |
| MODON Oasis Yanbu | 2 | 12 | One-time |
| Asir Second | 1 | 12 | One-time |
| Taif | 1 | 12 | One-time |
Second: Ready-Built Factories (Leasing Prices)
Annual leasing prices for ready-built factories vary by industrial city, sector, and area.
| Industrial City | Sector | Annual Financial Fee (SAR/unit) for 1500 m² | Annual Financial Fee (SAR/unit) for 700 m² | Annual Financial Fee (SAR/unit) for 350 m² |
|---|---|---|---|---|
| Riyadh Second | Central | 250,000 | - | - |
| Riyadh Third | Central | 200,000 | - | - |
| Al-Kharj | Central | 150,000 | 90,000 | - |
| Sudair City for Industry and Business | Central | 150,000 | - | - |
| Qassim First | Central | 120,000 | - | - |
| Qassim Second | Central | - | 90,000 | - |
| MODON Oasis Qassim | Central | 120,000 | 72,000 | - |
| Ha'il | Central | 90,000 | - | - |
| Zulfi | Central | 90,000 | - | - |
| Dammam Second | Eastern | 250,000 | 150,000 | 90,000 |
| Dammam Third | Eastern | 150,000 | - | 55,000 |
| MODON Oasis Al-Ahsa | Eastern | 90,000 | - | - |
| Hafr Al-Batin | Eastern | 90,000 | 54,000 | - |
| Wa'ad Al-Shamal | Eastern | 90,000 | - | - |
| MODON Oasis Al-Jouf | Eastern | 200,000 | - | - |
| Makkah First | Western | - | 150,000 | 90,000 |
| Jeddah First | Western | 200,000 | 120,000 | - |
| Jeddah Second | Western | 200,000 | 120,000 | - |
| Jeddah Third | Western | 250,000 | 150,000 | - |
| MODON Oasis Jeddah | Western | 150,000 | 90,000 | - |
| Madinah | Western | 90,000 | - | - |
| Tabuk | Western | - | 72,000 | - |
| MODON Oasis Yanbu | Western | 150,000 | - | - |
| MODON Oasis Asir | Western | 90,000 | - | - |
| Jazan | Western | - | 90,000 | - |
| Taif | Western | Annual financial fee for supporting units 75,000 SAR for 240 m² unit | - | - |
4.2. Other Service Fees
MODON includes fees for various services provided to investors and partners
General Plan Approval: 1 SAR per square meter, with a minimum of 5,000 SAR and a maximum of 25,000 SAR.
Private Industrial City License: 5 Halalas per square meter.
Private Technology City License: 5 Halalas per square meter.
Commercial Shop License Fee: 200 SAR annually per square meter of the shop sign area.
Contract Amendment Services Fee:
20,000 SAR for full ownership transfer requests.
10,000 SAR for other amendment requests, such as partner changes (exit or addition of new partners, transfer of shares between owners), change of establishment name for the same owner, change of activity or addition of products for the same owner, merging or separating contracts for the same owner, and changing the basic contract classification.
Industrial Development Fund Loans: An administrative fee of 2.5% applies, with a repayment period ranging from 5 to 10 years, and a grace period of up to two years after the start of production.
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4.3. Method of Annual Fee Payment
The process of settling financial dues to MODON is primarily done through the "SADAD" system.
Upon acceptance of any request, the investor is required to pay the financial fee within the specified period from the invoice issuance date.
4.4. "MODON" SADAD Code in Saudi Banks
The SADAD code for "MODON" in Saudi banks is 068.
5. Investment Conditions for Local and Foreign Companies
The Kingdom of Saudi Arabia offers an attractive investment environment for both local and foreign companies, with conditions and requirements aimed at regulating and facilitating these investments.
5.1. General Investment Conditions
For investment in Saudi Arabia, whether for local or foreign companies, there are a set of essential conditions that must be adhered to
Commercial Registration: The establishment must have a valid and updated commercial registration with all data, and it must be issued before the start of any corrective campaign.
14 Bank Account: Opening a dedicated bank account for the establishment and not using personal accounts for commercial transactions.
14 License Renewal: Regularly renewing activity licenses and updating associated establishment addresses.
14 Compliance with Regulations: Adhering to Saudi laws and regulations governing investment, including urban planning and construction regulations, and safety standards imposed by Civil Defense.
15 Financial Solvency: Providing proof of financial solvency to implement the project.
15 Feasibility Study: Commitment to submitting a preliminary feasibility study for the project, approved by a reputable national or international expert house.
15 Environmental Compliance: The project must comply with environmental standards imposed by relevant authorities such as the General Authority of Meteorology and Environmental Protection (currently the National Center for Environmental Compliance).
16 Transaction Documentation: Documenting all financial transactions of the establishment and complying with relevant regulations.
14 Facility Provision: Submitting a declaration of commitment to providing all infrastructure facilities (roads, water, sewage, electricity, telecommunications, waste treatment).
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5.2. Differences Between Local and Foreign Companies
Investment conditions in the Kingdom have seen significant developments, especially with the update of the investment system. The updated system aims to promote equal treatment between local and foreign investors and ensure transparent and fair procedures.
Investor and Capital Definition: In the updated system, the definition of an investor has become more comprehensive to include both local and foreign investors, unlike the previous foreign investment system which was limited to foreign investors only. The concept of capital has also been clarified to include shares and stakes in companies.
17 Registration and Licensing Mechanism: The updated investment system replaced licensing procedures with registration, aiming to provide more flexibility in procedures for investors.
17 17 Minimum Capital for Foreign Companies: Some types of foreign direct investment may require a minimum capital, for example, 30 million Saudi Riyals for some licenses.
18 16 Documents Required for Foreign Companies: In addition to general documents, foreign companies may be required to submit a copy of the commercial registration of the establishment in its country of origin, attested by the Saudi embassy, and financial statements for the last fiscal year of the foreign company, prepared by an internationally recognized legal firm and attested by the Saudi embassy.
18 Local Partnership: In some cases, a Saudi partner with a share of not less than 25% may be required to obtain a commercial license.
18 Special Approvals: Investment in some sensitive sectors may require special approval from official authorities.
19 17 Saudi Employment: Both foreign and local investors are required to comply with Saudi employment and training standards according to Saudization policies (Nitaqat).
16 Investment Incentives: The updated system introduced the possibility of granting investment incentives according to regulatory controls and procedures.
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The investment system in the Kingdom shows a clear trend towards attracting foreign direct investment, with simplified procedures and incentives. This reflects the Kingdom's commitment to diversifying its income sources and expanding its industrial and service base. The remaining differences aim to ensure compliance with local regulations and protect national interests while maintaining a fair competitive environment. A precise understanding of these differences is essential for foreign investors to ensure compliance and effective planning for entering the Saudi market.
6. Accepted and Unaccepted Activities in "MODON"
MODON defines a set of industrial, commercial, and service activities that are permitted within its industrial cities and technology zones, with some activities being unaccepted or subject to special conditions.
6.1. Targeted and Permitted Industrial Activities
MODON targets a wide range of industries to support economic diversification and enhance local content. Permitted industrial activities in industrial cities include
Petrochemical, Coal, and Rubber Industries: Includes the production of chemical materials derived from oil and gas and petroleum refining.
Manufacturing Industries: Such as food industries, plastics, textiles, building materials, carpentry, home appliances and their accessories, metal manufacturing, chemical industries, and the transport sector (e.g., cars and railways), and manufacturing electronic consumer goods (e.g., radios and televisions) and others (e.g., elevators and air conditioners).
Service and Logistics Activities:
Construction Services: Such as installation of various equipment, devices, and systems for buildings, plumbing and electrical installations, carpentry, painting, coating, decoration, and building renovation operations.
Maintenance and Operation Contracts: Maintenance and operation work in all sectors.
Transportation and Storage: All operations related to sea and air transport (passenger transport and cargo shipping), and all types of storage and warehouse rental (e.g., grain silos and general warehouses).
Maintenance and Repair Services: Maintenance and repair of appliances and cars, and decoration, upholstery, and curtain work.
Printing, Publishing, and Media: Publishing, distribution, and media activities.
Wholesale and Retail Trade: For chemical materials, mineral oils, food products, agriculture, fabrics, building materials, metals, furniture, and office supplies.
Laundry Services: Manual and automatic laundries.
Transport and Shipping Agency Activities: Sea and air transport and shipping agencies.
Consumer Finance and Exhibition and Conference Organization.
Healthcare Services: Such as speech, language, and swallowing therapy centers.
The Ministry of Industry and Mineral Resources also announced the approval of new controls and requirements allowing 46 industrial activities with low environmental impact to be practiced within cities and on commercial streets, in addition to other activities permitted in the outskirts of cities.
6.2. Unaccepted or Special Condition Industrial Activities
MODON and the Ministry of Industry and Mineral Resources impose some restrictions on the practice of industrial activities to ensure environmental compliance and public safety. Unaccepted activities or those subject to special conditions include
Environmentally Impactful Industries: Such as building materials (concrete and asphalt) and leather tanning. These industries may be permitted in specific, designated industrial cities, and investors must check the targeted activities for each industrial city.
9 Practicing Activity Outside Licensed Factory Boundaries: It is strictly prohibited to practice industrial activity outside the licensed factory boundaries, or to use public sidewalks or setback areas for this purpose.
25 Removing or Covering Factory Closure Stickers: It is prohibited to remove or cover any sticker indicating the factory's closure.
25 Specific High-Risk or Negative Impact Industries: Although sources do not specify a comprehensive list of absolutely prohibited activities, they indicate that some industries may be "high-risk" or require "special technical conditions" related to air pollutants or hazardous waste.
27 Activities Conflicting with Safety and Environmental Requirements: Any activity that does not comply with MODON's approved occupational safety standards or does not commit to removing waste and transporting it to designated areas is considered unacceptable.
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This distinction between accepted and unaccepted activities demonstrates the Kingdom's commitment to sustainable and responsible industrial development. On one hand, there is broad encouragement for investment in diverse sectors, and on the other hand, there is strict control over activities that may have a significant environmental or safety impact. This balance aims to attract quality investments that align with Vision 2030 and the Kingdom's aspirations for a developed and sustainable industrial environment.
7. Relationship Between the Ministry of Industry and Mineral Resources and "MODON"
The relationship between the Ministry of Industry and Mineral Resources and the Saudi Authority for Industrial Cities and Technology Zones ("MODON") is an integrated and strategic one, aimed at achieving comprehensive industrial development goals in the Kingdom.
7.1. Role of the Ministry of Industry and Mineral Resources
The Ministry of Industry and Mineral Resources plays a pivotal role in formulating industrial policies and developing the sector. The Ministry is responsible for issuing industrial licenses in accordance with the regulations and laws in force in the Kingdom.
The electronic services provided by the Ministry include
Chemical Clearance Request: To enable industrial investors to request import permission and clearance for chemical materials.
Industrial License Issuance Service: An essential service for industrial establishments.
Mining Sector Services: Such as requesting quarry licenses for building materials and mining licenses.
The Ministry classifies industrial activities and sets controls and requirements for their practice, whether within designated sites or outside them, with the aim of regulating the sector, stimulating industrial investment, and promoting sustainable development.
7.2. Coordination and Cooperation
MODON is a public authority affiliated with the Minister, which confirms the direct relationship between them in overseeing the industrial sector.
Strategy Development: The Ministry works on developing strategies for the industrial and mining sectors, and MODON is a key partner in implementing these strategies, especially concerning the development of industrial cities and the localization of industries.
Facilitating Procedures for Investors: Both entities strive to provide an attractive environment for investments. While the Ministry issues industrial licenses, MODON provides the necessary infrastructure and services for establishing and operating factories.
Alignment with Private Sector Needs: The Ministry collaborates with other entities, such as the Ministry of Human Resources and Social Development, to conduct surveys aimed at understanding the challenges faced by the industrial and mining private sectors in attracting talent and competencies, and developing initiatives to support them.
30 2 Oversight and Compliance: MODON is committed to applying the standards and requirements approved by the Ministry and other relevant authorities, such as safety and environmental requirements.
11 Local Content Development: MODON works to empower industry and increase local content in line with Vision 2030, which is a common goal with the Ministry of Industry and Mineral Resources.
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This close link between the Ministry and MODON ensures a comprehensive framework that supports the growth of the industrial sector in the Kingdom, from policy and legislation formulation to providing the necessary infrastructure and services for investors. This integration enhances the efficiency and effectiveness of efforts to achieve industrial and economic development goals.
8. Use of Virtual Addresses for Companies in Saudi Arabia
The use of virtual addresses is a flexible and economical solution for companies in the Kingdom of Saudi Arabia, especially for startups, foreign investors, and digital businesses.
8.1. Concept and Benefits of Virtual Addresses
A virtual address is an official business address used by a company to receive mail, packages, and legal documents, without the need to rent or operate a physical office.
The main benefits of using a virtual address in Saudi Arabia are
Cost Savings: A virtual address significantly reduces operational costs associated with renting a physical office, such as rent, utility costs, and office maintenance.
31 Flexibility and Expansion: It allows companies to work remotely from anywhere while maintaining a professional and legal presence in the Kingdom. It also facilitates expansion into other cities or countries without significant real estate commitments.
31 Professional Image: It gives companies a professional and credible appearance, even if they do not have a physical office, which enhances trust among clients and partners.
31 Facilitating Business Registration Procedures: A virtual address helps speed up the company registration process, especially for foreign investors, as it meets legal requirements for obtaining a business address without the need for a physical location.
31 Supporting E-commerce and Digital Businesses: It is an essential tool for the prosperity of e-commerce, as it provides a center for receiving official mail and reduces costs, allowing for the opening of online stores targeting different cities.
31 Additional Services: Virtual address services may include advanced digital tools such as electronic mail management, cloud storage, and virtual secretarial services.
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8.2. "MODON" and Government Policy Towards Virtual Addresses
While Saudi Arabia encourages the use of virtual addresses to facilitate business registration and reduce costs, its policy towards the use of these addresses in the context of MODON's industrial cities requires precise clarification.
Generally, virtual addresses are accepted for commercial registration purposes, opening bank accounts, and government communication in the Kingdom.
For MODON, its nature of work focuses on providing lands and ready-built factories for the establishment and operation of actual industrial facilities.
Based on this, it can be concluded that a virtual address may be useful for companies seeking to register a legal presence in the Kingdom or for service companies that do not require a significant physical presence. However, for investors aiming to establish factories or industrial facilities within MODON's cities, the requirements go beyond a mere virtual address and necessitate a physical presence and adherence to the engineering, environmental, and safety requirements specific to industrial facilities.
9. Role and Services of "Motaded Limited" in "MODON"
Motaded (Motaded) provides comprehensive consulting services to companies in the Kingdom of Saudi Arabia, aiming to support local and foreign investors in establishing and developing their businesses. Although the available sources do not directly link "Motaded Limited" to "MODON" as an exclusive partner or affiliated entity, its services are of utmost importance to any investor seeking to benefit from opportunities in industrial cities and technology zones.
9.1. Overview of "Motaded Limited"
Motaded is a Saudi-based consulting firm that focuses on providing comprehensive services to companies operating in the Kingdom.
The company indicates achieving significant accomplishments, such as serving over 10,000 happy clients, registering over 50,000 individuals, assisting 72,000 companies, issuing over 22,000 visas, 18,000 work permits, and 36,000 human resources contract services.
9.2. Services Provided to Investors in Industrial Cities
Although the sources do not specify Motaded's services specifically "in MODON," the services provided by the company are essential for any investor targeting the Saudi market, including industrial cities
Business Setup: Motaded provides vital services for establishing companies, including assistance in selecting business activities, determining the appropriate license type, understanding conditions and requirements, and preparing necessary documents.
35 Human Resources Services: Given its extensive knowledge of Saudi regulations, Motaded provides human resources services, including Government Relations Officer (GRO) services, which are essential for compliance with labor and Saudization regulations in industrial cities.
35 Consulting Services: The company offers specialized guidance on legal, administrative, and financial matters, including accounting and bookkeeping. These consultations help companies understand local regulations, optimize operations, and ensure compliance with financial and legal requirements.
35 Investor Visas & Premium Residency: Motaded provides services for issuing investor visas and facilitating the acquisition of Premium Residency, which is attractive to foreign investors wishing to settle and work in the Kingdom long-term.
35 Saudi Partners: Motaded helps foreign investors find reliable local partners, facilitating entry into the Saudi market and ensuring compliance with local regulations.
35 Free Zones, Business Incubators, and Co-working Spaces: The company offers services related to working in special economic zones, supports entrepreneurs through business incubators, and provides flexible and equipped workspaces.
35 Translation Services: Motaded provides certified translation services for legal, medical, commercial, and other documents, facilitating communication and transactions for international investors.
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In general, Motaded offers a wide range of services that enable investors to navigate the complex Saudi business environment, from establishment to operation and compliance. These services are valuable support for any investor, whether local or foreign, seeking to capitalize on investment opportunities in MODON's industrial cities and technology zones.
10. Conditions for Qualifying Industrial and Environmental Consulting Offices
Industrial and environmental consulting offices are vital partners for MODON and investors, ensuring the quality of design and compliance with technical and environmental standards. Therefore, MODON sets specific conditions and criteria for qualifying and accrediting these offices.
10.1. General Conditions for Qualifying Consulting Offices
To qualify a consulting office with MODON, a set of conditions must be met and specific documents submitted
Basic Documents:
Entity file: Includes general information about the office, owner and manager details, contact information, and a record of previous work.
8 Qualification request acknowledgment.
8 List of completed projects in the last three years, with contact numbers for relevant entities.
8 Recent copy of commercial registration.
8 Consulting office license certificate from the Engineers Syndicate (or equivalent in the Kingdom).
8 Agreements with partners and certificates of contractors with the office (partners or consultants).
38 Financial statements for the last 3 years approved by an auditor and tax declarations.
8 Proof of previous industrial work experience for the consulting office (latest payment certificate for executed works or certificate of completion).
38 Quality certificate (if any) or quality manual.
38 Organizational structure of the consulting office, including partners and how they are dealt with in the structure, and means of communication with the office for dealing with the Authority.
38 Zakat certificate, social insurance certificate, and Saudization certificate.
8 Chamber of Commerce subscription certificate.
8 Investment license (if the office is licensed under the foreign investment system).
8 License to practice the activity from the Saudi Council of Engineers.
8 Employee list from social insurance and passports.
8 Work portfolio including building permits, supervision reports, and engineering designs.
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Experience and Qualifications:
The office owner must hold a bachelor's degree in engineering or architecture or equivalent from a recognized university.
37 Practical experience in the profession must not be less than five years.
37 Must be dedicated to the work of the consulting office.
37 Must not be employed by, a partner in, or own a contracting company or construction materials trading company.
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Qualification Procedures:
The application is submitted electronically through the Suppliers Portal.
8 The application undergoes a thorough review process.
8 An office visit may be conducted for evaluation purposes.
8 The service completion period is 15 working days.
8 The qualification certificate is granted after passing the evaluation and serves as a request number representing the qualification certificate.
9 The qualification period for a consulting office ranges from one to two years, and the office has the right to re-apply for qualification.
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10.2. Special Conditions for Industrial and Environmental Consulting Offices
In addition to the general conditions, there are specific requirements for consulting offices specializing in industrial and environmental consulting
Environmental Accreditation: If the consulting office specializes in environmental studies, it must have a license to practice from the General Authority of Meteorology and Environmental Protection (currently the National Center for Environmental Compliance).
8 Specialized Competencies: The presence of a permanent administrative manager and environmental engineer is required.
39 Experience in Environmental Consulting: Specific experience in environmental consulting ranging from one year (for Class I) to five years (for Class III) is required.
39 Completion of Environmental Impact Assessment Projects: The office must have completed a specific number of environmental impact assessment projects in recent years (e.g., at least two projects for Class II, and five projects for Class III).
39 Environmental Monitoring and Measurement Devices: The office must own the necessary environmental monitoring and measurement devices for conducting environmental studies, or have the ability to obtain them.
39 Technical Interview: Obtaining the license requires an interview with the technical committee responsible for granting environmental consulting licenses.
39 Safety Plan Approval: Safety plans must be approved by consulting offices accredited by MODON.
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The qualification process for consulting offices contributes to ensuring the quality of industrial and environmental projects within MODON's cities, as it guarantees that plans, designs, and technical reports comply with the highest local and international standards and requirements. This reduces operational and environmental risks and supports the sustainable development of industrial cities.
11. Civil Defense Requirements for Industrial Cities
Civil Defense requirements are a vital part of the process of establishing and operating factories in industrial cities, aiming to reduce the risks of fires, explosions, and other accidents that may endanger lives and property.
11.1. General Civil Defense Requirements for Factories
Civil Defense requirements vary based on the type of industrial activity (food, chemical, manufacturing), but generally include the following aspects
Fire Fighting Systems:
Fire Extinguishers: Providing extinguishers appropriate for the type of materials used in the factory (e.g., powder extinguishers for chemical fires or carbon dioxide for electrical fires), distributed in easily accessible locations.
40 Sprinklers: Installing automatic water spray systems in high-risk areas, such as flammable material warehouses.
40 Fire Hoses: Providing water hoses connected to reliable water sources, ensuring easy access.
40 Alarm Systems: Installing fire alarm devices connected to a central system, with regular testing and maintenance to ensure their efficiency.
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Emergency Exit Design:
Number and Distribution of Exits: Providing a sufficient number of emergency exits based on the factory size and number of workers, ensuring that doors open outwards.
41 Directional Signs: Installing illuminated signs indicating emergency exits, maintaining their clarity.
41 Clear Passageways: Designing wide, unobstructed passageways leading to exits.
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Ventilation and Lighting Systems:
Effective Ventilation: Designing ventilation systems to evacuate smoke and toxic gases in case of fire, especially in chemical factories.
41 Emergency Lighting: Installing battery-operated lighting to ensure visibility during power outages.
41 Air Filters: Using filters to reduce harmful emissions, according to Ministry of Environment requirements.
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Safe Storage of Hazardous Materials:
Dedicated Storage Areas: Separating flammable or chemically reactive materials in warehouses equipped with ventilation and cooling systems.
41 Resistant Containers: Using fire-resistant tanks for storing chemicals.
41 Warning Signs: Placing clear signs warning of hazardous materials.
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Evacuation Plans and Training:
Approved Evacuation Plan: Preparing a written plan specifying evacuation routes, assembly points, and emergency procedures.
41 Worker Training: Organizing regular training courses on the use of firefighting equipment and emergency response.
41 Simulation Drills: Conducting regular drills simulating fires or accidents.
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Monitoring and Maintenance Systems:
Surveillance Cameras: Installing cameras covering all factory areas, with continuous recording.
41 Regular Maintenance: Conducting regular inspections of fire fighting, alarm, and ventilation systems to ensure their efficient operation.
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Required Documents:
Factory plans (structural and mechanical) showing the locations of safety systems (extinguishers, exits, sprinklers).
40 Inspection and maintenance certificates for fire fighting equipment.
40 Evacuation plan report and worker training.
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11.2. Importance of Compliance and Coordination
Compliance with Civil Defense requirements is crucial for the safety of lives and property within industrial cities. Achieving this compliance requires effective coordination among investors, consulting offices, and Civil Defense.
Specialized consulting firms provide significant support in this regard, as they can design integrated safety systems that comply with Civil Defense regulations and MODON standards, prepare required documents, supervise implementation, and coordinate with Civil Defense to facilitate inspections and obtain approvals.
12. Frequently Asked Questions about "MODON"
To provide a comprehensive and clear picture for investors and partners, MODON offers a Frequently Asked Questions section covering various aspects of its services and procedures.
12.1. Frequent Questions about Lands and Factories
Services Provided: MODON offers many products and services in cooperation with relevant authorities and the private sector, such as industrial lands, ready-built factories, service and logistics products, and industrial and logistics loan programs in cooperation with the Industrial Development Fund and the Social Development Bank.
9 Requesting More Than One Plot: Investors can request more than one plot in a single industrial city or in different industrial cities by submitting a new contract request through the "Shareek" system.
9 Lease Contract Duration: Industrial land contracts extend up to 20 years, while logistics land contracts extend up to 50 years, all starting from the payment date.
9 Use of Industrial Lands: Industrial lands are designated only for establishing and operating factories and cannot be used as warehouses or labor housing, as these are investment activities requiring application for investment or residential lands.
9 Environmentally Impactful Industries: For environmentally impactful industries such as building materials, concrete, asphalt, and leather tanning, permitted cities can be identified by checking the targeted activities for the desired industrial city on MODON's website.
9 Difference Between Allocation Fee and Rental Fees: The allocation fee is paid once (or monthly for some cities) as an incentive to start production, while rental fees are paid annually as rent throughout the contract period.
9 Full Utilization of Land Area: Investors must fully utilize the requested land area. If not fully utilized, the rental price doubles annually. Investors can waive the unutilized area through the contract amendment service.
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12.2. Frequent Questions about Electronic Services
Tracking Application Status and Invoices: Investors can track their application status, financial dues details, or investment/industrial contracts electronically through the "Shareek" system.
9 Changing Industrial City After Submission: This can be done by creating a ticket through the electronic ticketing system in the "Shareek" system.
9 Password Recovery: Passwords for "Shareek" accounts can be recovered via the "Forgot Password" option on the electronic services portal.
9 Viewing Industrial City Maps: All maps of industrial cities overseen by MODON can be viewed through the "MODON Maps" (GIS) service.
5 Renewing Contracts Electronically: Yes, contracts can be renewed electronically through the investor's account in the "Shareek" system.
9 Amending Factory Name or Transferring Ownership: Factory names can be changed without transferring ownership if the commercial registration changes, or full ownership can be transferred to another investor, through the contract amendment service in the "Shareek" system.
9 Role of Consulting Offices: Consulting offices must be accredited by MODON to submit requests for plan approval or building permits.
9 9 Maintenance Work Inside the Factory: Maintenance work inside the factory cannot be performed without a permit, and a permit request must be submitted through the "Shareek" system.
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12.3. Frequent Questions about Loans and Incentives
Entities Providing Industrial Loans: Entities providing industrial loans in the Kingdom include: the Saudi Industrial Development Fund, the Social Development Bank, and local banks.
9 MODON's Role in the Social Development Bank Agreement: MODON collaborates with industrial investors to complete documents and ensure compliance with requirements, then submits the request to the Social Development Bank and follows up until the investor receives the loan.
9 Government Incentives: The government offers a set of incentives for factories in industrial cities, such as symbolic rental value and customs exemptions.
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12.4. General Information and Contact
MODON Emergency Number: MODON's emergency reporting number is (1920).
9 Other Contact Methods: MODON can be contacted via its website, unified number 8002499944, or email info@modon.gov.sa.
42 MODON's Objectives: The objective of establishing MODON is to promote industrial development, attract investments, and improve the quality of infrastructure in industrial areas.
44 MODON's Role in Vision 2030: MODON's program aligns with Vision 2030's goals by diversifying the economy, reducing oil dependence, empowering youth, providing job opportunities, and boosting exports.
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These FAQs demonstrate MODON's commitment to transparency and providing necessary information to investors, contributing to building a supportive and clear investment environment.
Conclusion and Recommendations
The Saudi Authority for Industrial Cities and Technology Zones ("MODON") is a strategic driver of industrial and economic growth in the Kingdom of Saudi Arabia, playing a pivotal role in achieving Vision 2030 objectives. By managing 36 industrial cities and providing integrated infrastructure and advanced digital services, MODON offers an attractive environment for local and foreign investment.
Key Conclusions:
Systematic Expansion and Balanced Development: MODON demonstrates a commitment to geographically distributing industrial development, with a focus on promising areas, which enhances investment opportunities in new regions and contributes to creating regional job opportunities. This approach reflects strategic planning that goes beyond mere quantitative growth to include sustainable and balanced development.
Effective Partnership Model: MODON's structure and revenues highlight its reliance on partnership with the private sector, indicating a supportive and flexible business environment. This interaction enhances the Authority's ability to respond to market demands and provide innovative solutions.
Commitment to Environmental Sustainability: MODON integrates environmental dimensions at the core of its strategy, by localizing sustainable development goals and imposing strict environmental standards. This approach creates opportunities for investors in green industries and enhances the Kingdom's reputation as a responsible industrial hub.
Digital Transformation and Streamlined Procedures: MODON offers a sophisticated suite of digital solutions, such as the "Shareek" system and the Suppliers Portal, which simplify registration and service management procedures, reducing bureaucratic hurdles and enhancing business efficiency.
Supportive Regulatory Environment: The Kingdom, through the Ministry of Industry and Mineral Resources and MODON, provides a clear regulatory framework and transparent investment conditions, along with various incentives that encourage the attraction of capital and expertise.
Recommendations:
Based on the comprehensive analysis, the following recommendations can be made for current and potential investors in MODON's industrial cities and technology zones:
Study Strategic Locations: Investors are advised to evaluate opportunities in emerging or less developed industrial cities, as MODON may offer additional incentives and growth opportunities in untapped areas, in line with the balanced development strategy.
Invest in Sustainable Technologies: Given MODON's focus on environmental sustainability, investors are recommended to adopt environmentally friendly technologies and practices. This not only ensures compliance with regulations but can also open new markets for green products and services.
Maximize Use of Digital Services: Investors are encouraged to use the "Shareek" system and all available electronic services to accelerate and facilitate their operations, from registration to contract and license management.
Collaborate with Accredited Consulting Offices: To ensure compliance with all building, safety, and environmental conditions, it is recommended to collaborate with consulting offices accredited by MODON, which possess the necessary expertise in local regulations.
Understand Investment Differences: Investors, especially foreign ones, must understand the differences in investment conditions and requirements between local and foreign companies, and leverage specialized consulting services to ensure full compliance and facilitate procedures.
Comprehensive Financial Planning: Investors must conduct accurate financial planning that includes all fees and costs associated with industrial lands, ready-built factories, and facilities, in addition to utilizing available financing solutions and incentives.
MODON does not merely provide lands and factories; it offers an integrated ecosystem that supports industry from planning to operation, making it a promising investment destination at the heart of Saudi Vision 2030.
