Free Zones in KSA
Special Economic Free Zones in Saudi Arabia
Following the Kingdom’s Vision 2030, Saudi Arabia established the first four special economic zones with unique commercial systems tailored to the objectives of free zones and aligned with global free economic zone policies. These zones aim to facilitate economic diversification, accelerate growth, and enable foreign investors to conduct business in Saudi Arabia in ways that support the Vision and investor goals in the Saudi market.
These economic zones also provide incentives across various sectors such as industry, trade, import, and export, helping investors accelerate their operations both locally and internationally by connecting them to global and domestic markets.
The launched zones are:
- King Abdullah Economic City Special Economic Zone
- Ras Al-Khair Special Economic Zone
- Jazan Special Economic Zone
- Cloud Computing and Informatics Special Economic Zone
- Integrated Industrial and Logistics Special Zone in Riyadh
King Abdullah Economic City Special Economic Zone
Located in Makkah Province, covering 60 km². Targets automotive supply chains and assembly, consumer goods, light electronics, pharmaceuticals, medical technologies, and logistics services.
Ras Al-Khair Special Economic Zone
Located in the Eastern Province, covering 20 km². Focuses on shipbuilding, maintenance, repair, operations, and offshore drilling platforms.
Jazan Special Economic Zone
Located in Jazan, covering 26 km². Targets food processing, metal transformation, and logistics services.
Investment Incentives in the above three zones:
- 5% corporate income tax for 20 years
- 0% withholding tax permanently on profit repatriation to foreign countries
- 0% deferred customs duties on goods entering the special economic zones
- Flexible regulations supporting foreign talent for the first five years
- 0% VAT on goods exchanged within and between the zones
- Exemption from operational fees for foreign employees and their families within the zones
Cloud Computing and Informatics Special Economic Zone
Headquartered in Riyadh, with the ability to establish and operate data centers across Saudi Arabia. Targets cloud computing services.
This zone contributes to achieving targeted investments worth USD 20 billion by 2030 through foreign direct investment and local investment in data and artificial intelligence sectors.
Key incentives include:
- Special tax treatment aligned with OECD double taxation avoidance principles, suitable for cloud service providers
- Exemption from operational fees for foreign employees and their families
- Competitive electricity costs at USD 0.05/kWh
- Flexibility to provide cloud services and establish/operate data centers across the Kingdom
Integrated Industrial and Logistics Special Zone in Riyadh
Located near King Khalid International Airport, Riyadh. Targets consumer products, computer parts, pharmaceuticals, food and medical supplies, aerospace and spare parts, luxury goods, jewelry, and precious metals.
Competitive advantages include:
- 0% corporate income tax
- Tax exemptions for 50 years
- VAT exemptions
- Withholding tax exemptions (subject to specific criteria)
- 0% VAT on services, manufacturing, or assembly
- Exemptions on money transfer taxes (subject to criteria)
- VAT exemptions for goods under customs suspension
Saudi Arabia’s Vision
Saudi Arabia aims to become a global investment powerhouse. Under Vision 2030, the Kingdom’s social and economic transformation generates opportunities for growth across many promising sectors and regions.
These launched zones are: King Abdullah Economic City Special Economic Zone, Ras Al Khair Special Economic Zone, Jazan Special Economic Zone, Cloud Computing and Information Technology Special Economic Zone, and Riyadh Integrated Logistics Special Zone.
Beneficiary group
- Entrepreneurs and Small-to-Medium Enterprises (SMEs)
- International companies looking to set up regional service hubs by starting a business
Service Duration
The approval process typically takes between 2 to 4 weeks, depending on the timely submission of documents and adherence to regulatory requirements.
Promote foreign investment in Saudi Arabia by offering relaxed regulations and incentives within free zones.
Encourage the growth of service-based businesses, especially for those involved in foreign business registration in Saudi Arabia.
Attract international expertise and foster innovation within Saudi Arabia’s service sector.
Contribute to Saudi Arabia's Vision 2030 by diversifying the economy away from oil dependency and expanding the service sector.
100% foreign ownership for businesses operating in designated free zones.
Tax exemptions on selected business activities, with reduced tariffs for imports and exports.
Simplified regulatory requirements compared to mainland operations, making the business setup process in Saudi Arabia easier for foreign investors.
Strategic location for accessing regional and global trade opportunities.
Access to world-class infrastructure available within the free zones.
Freedom to repatriate profits without restrictions, a key advantage for foreign investors in Saudi Arabia.
Frequently Asked Questions (FAQs)
- What is a Free Zone Service License?
A Free Zone Service License allows companies to operate in Saudi Arabia’s designated free zones, benefiting from tax exemptions, simplified regulations, and 100% foreign ownership.
- Who is eligible for a Free Zone Service License?
Entrepreneurs, SMEs, and international companies looking to expand their service operations in Saudi Arabia are eligible.
- How long does it take to obtain this license?
The process typically takes 2 to 4 weeks, depending on the completion of documentation and approvals.
- What are the primary requirements?
A completed application form, business plan, identity documents, and proof of office space within a free zone.
- Can international companies own 100% of their business?
Yes, free zones allow full foreign ownership, which is a key benefit of foreign business registration in Saudi Arabia.
- What tax benefits are available?
Free zones offer tax exemptions on certain business activities, reduced tariffs, and favorable tax compliance in Saudi Arabia.
- Do I need a physical office in the free zone?
Yes, a physical office or lease agreement within the free zone is mandatory for obtaining a service license.
- What sectors qualify for a Free Zone Service License?
Eligible sectors include consultancy, IT, legal, marketing, and other professional services.
- Are there any restrictions on repatriating profits?
No, free zones allow businesses to freely repatriate profits without restrictions, enhancing the appeal of investment in Saudi Arabia.
Beneficiary Group
Entrepreneurs and Small-to-Medium Enterprises (SMEs)
International companies looking to set up regional service hubs by starting a business in Saudi Arabia
Service Duration
The approval process typically takes between 2 to 4 weeks, depending on the timely submission of documents and adherence to regulatory requirements.
