Investment Incentives and Support
The Kingdom of Saudi Arabia is a fast-growing, business-friendly, pro-trade and highly popular location for foreign investors. In 2009 it attracted $35.5 billion of foreign investment, producing a total stock of $147.1 billion.
Foreign companies enjoy all the benefits, incentives, guarantees and support offered to Saudi-owned companies. These include:
- No personal income tax, no value-added tax, no sales tax, no land tax and no property tax.
- 100% foreign ownership permitted - of companies, plant, equipment, projects and property (except which includes in Makkah & Madinah cities).
- Full repatriation of capital, profit and dividends allowed, subject to a 5% withholding tax.
- Low-cost sites in Saudi Arabia 32 industrial cities and four economic cities, and in Jubail and Yanbu.
- No export duties within the 17 countries of the Greater Arab Free Trade Area.
- Few restrictions on currency conversion, exchanges and transfers.
- 20% tax on corporate profits, with any losses carried forward indefinitely to offset future taxes.
- No restrictions on sponsoring foreign employees.
- Customs duties exemption on imported machinery, equipment, raw materials and spare parts if they are for industrial use.
- Duty drawback, a customs refund for raw material imports that are processed and exported as finished goods.
- Preferential treatment for national products in Saudi government procurement.
Foreign companies can benefit from specific schemes to help them export, recruit employees and grow. These include:
- Establishment of the Saudi Exports Authority.
- Export credit, financing, guarantees and insurance through the Saudi Export Program
- The promotion of Saudi non-oil exports by the Saudi Export Development Authority
- Financial support for the training and employment of Saudis from the Human Resources Development Fund
- Low-cost loans from the Saudi Industrial Development Fund, Public Investment Fund and Saudi Industrial Investments Company.
The Government also grants significant training- and employment-related tax concessions to companies operating in six less-developed regions: Hail, Jazan, Najran, Al-Baha, Al-Jouf and Northern Borders. These tax privileges are valid for 10 years from the start of a project.