Saudi Arabia: Additional Benefits Announced for Companies Located in Special Economic Zones, Including Exemption from Saudization

During a Special Economic Zones Investment Forum in Riyadh, the Minister of Human Resources and Social Development announced a number of benefits to companies that open in Special Economic Zones (SEZs) in Riyadh, Jazan, Ras Al-Khair and the King Abdullah Economic City. Notably, companies located in these SEZs will not be required to meet Saudization requirements; however, companies that do choose to employ Saudi nationals will be able to obtain additional benefits from the Human Resources Development Fund, although specific details have not yet been released. Further, companies established within the SEZs will obtain a permanent exemption from Value Added Tax and social insurance tax on transactions between entities in SEZs and will obtain a 20-year tax reduction. The above incentives are intended to create new opportunities for investors to bring their business to Saudi Arabia. Additionally, on May 25, 2023, Saudi Arabia and Iraq discussed the establishment of a Special Economic Zone on the borders of the two countries during the Saudi-Iraqi Coordination Council. Additional details are expected to be forthcoming.