Saudi Arabia's Special Economic Zones

Saudi Arabia’s Special Economic Zones: New Opportunities for Global Firms

Saudi Arabia has recently unveiled 4 new Special Economic Zones, tending to the ongoing shift toward a more diversified economy for the Kingdom within the scope of Saudi Vision 2030. These newly established environments present immense opportunities for international investors across a number of high-growth sectors. Our Director of KSA Expansion, Alex Nicholls, recently appeared on Dubai Eye’s Business Breakfast to discuss the launch of Saudi Arabia’s new Special Economic Zones and its significance for global enterprises.


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AstroLabs was the first-ever licensed incubator in Saudi Arabia over five years ago and has since expanded over 350 companies into the Kingdom. In one of the most anticipated initiatives since the launch of our expansion operations in Saudi, Saudi Arabia has successfully debuted four new Special Economic Zones, providing significant benefits to 100% foreign-owned businesses looking to operate within the Kingdom. This is the latest in a series of projects and reforms, with the aim of elevating the role of the private sector for a more powerful and competitive economy in the Kingdom.

Today, we break down some of the most important insights from our Director of KSA Expansion, Alex Nicholls’ recent appearance on Dubai Eye’s Business Breakfast. The full episode below elaborates on the opportunities brought about by this exciting initiative. Alex discussed the prospective advantages in store for global businesses planning on expanding into one of these strategic zones, as well as some of the logistical challenges they may encounter through the process.

The implementation of Special Economic Zones (SEZs) has been long in the making, with justified anticipation from global players. It was expected that operating in one of these SEZs would exempt companies from standard taxation procedures, although no full waivers on taxes were announced. This might not necessarily be a bad thing, Alex explains, as these zones, which target specific sectors, including logistics, pharmaceutical, and medtech, offer a range of other attractive incentives for companies. One of the most appealing motivational measures is flexibility on the national quota for hiring local talents to complement foreign recruitment or “Saudization.”

There are, however, exciting tax incentives in the newly debuted SEZs. While foreign businesses currently face a 20% corporate tax on net profit, the newly established zones would offer a considerably lower corporate tax rate, totaling 5%. Additionally, companies will benefit from certain tax exemptions for processes like transferring capital outside of the Kingdom.

While no details have been made available on hiring incentives yet, Alex noted that Saudization might be subject to certain breaks. Saudization is a policy that aims to ensure the hiring of local talents, with 25% to 33% of service company employees needing to be Saudi nationals. It seems, however, that the new SEZs would ease up on the Saudization quota depending on the zone and the company on a case-by-case basis.


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While the sentiment around the potential benefits of SEZs is greatly optimistic, the intricate, multi-step process to set up 100% foreign-owned companies in Saudi Arabia remains more or less remains the same. This includes registering with the Ministry of Investment in Saudi Arabia (MISA), attesting a Local Article of Association (AoA), and registering with multiple industries and platforms, including the General Authority of Zakat and Tax (ZATCA), amongst many other significant steps. Yet, with the momentous growth driven by Saudi Vision 2030, and the launch of these Special Economic Zones, more regional and global businesses grow their interest in expanding into this mega-growth market.

From our experience, many global firms are moving their regional headquarters to the highly attractive Saudi market or expanding into regional subsidiaries, and SEZs present a unique environment where some of the most future-forward industries can develop and grow into important disruptive forces.

Overall, Alex seemed confident about the positive impact of Saudi Arabia’s SEZs.What will the full picture and potential of these campus innovation zones look like? More details to come soon!


With 350+ high-growth companies expanded to KSA, AstroLabs is your trusted Expansion Partner. Set Up Your Company in Saudi Today.