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How Saudi Arabia’s new special economic zones signal that the Kingdom is open for business

How Saudi Arabia’s new special economic zones signal that the Kingdom is open for business

Exactly how Saudi Arabia’s new special financial areas signal that the Kingdom is open for business

The SEZs mark a substantial step toward attaining Vision 2030’s objective of diversifying the Kingdom’s economic situation

RIYADH: The launch of four unique economic areas with incentives for international companies marks a landmark on Saudi Arabia’s path to ending up being an international organization and investment powerhouse.

The value of the news was summed up by Khalid Al-Falih, chairman of the Economic Cities and Special Areas Authority and also Saudi minister of financial investment, who stated: “These 4 special financial areas provide the chance for international capitalists tohave a risk worldwide’s fastest expanding economic situation.”

In August, the International Monetary Fund predicted that Saudi Arabia would this year turn into one of the globe’s fastest expanding economic situations on the stamina of sweeping pro-business reforms as well as a sharp rise in oil costs and manufacturing.

In several ways, SEZs embody the Kingdom’s increase as well as objective to come to be not just a leading international economy however likewise an essential worldwide service hub.


Saudi Arabia’s Vision 2030 financial reform program aims to enhance the contribution of international straight financial investment, which touched a record $19.3 billion in 2021, from 0.7 percent of gross domestic product in 2016 to 5.7 percent by 2030.

The new SEZs are a major step toward accomplishing that objective. An invite by the Kingdom to prospective investors in the SEZs defines the Saudi economic climate as “an investment giant at the center of international trade.”

Adel Afiouni, a financial investment banking executive and also previous minister for financial investments and also modern technology in Lebanon, informed Arab News: “Over the last couple of years Saudi Arabia has actually taken on an aggressive as well as ambitious method to bring in investments to the Kingdom and to produce knowledgeable work and also lasting financial growth.

” Saudi authorities want to utilize the Kingdom’s growing placement as a financial superpower as well as their status as one of the most famous and also active investors worldwide.”


Provided present market problems, Afiouni claimed Saudi Arabia as well as the Gulf Cooperation Council much more normally currently constituted “among one of the most desired swimming pools of capital around the world and among the most attractive sources of company as well as of economic activity for global corporations.

” In addition, the region still appears to be shielded from global financial stress and anxiety and supplies a safe haven for service as well as financial investment.

” In a smart as well as extensively scheduled way, the Saudi authorities are insisting this leadership setting as well as utilizing it to extract optimum advantages for their economic climate.

” The recent announcement to create four brand-new complimentary areas and a bundle of incentives is specifically part of this technique to make the Kingdom an attractive company destination.


” By combining capital schedule with company growth availability as well as with a plan of motivations as well as modern laws, the brand-new totally free areas can come to be a significant video game changer in the Kingdom’s approach to turn Saudi Arabia right into a global business and also financial investment center for global firms as well as entrepreneurs,” Afiouni added.

SEZs are geographically approved locations expanded purposefully throughout Saudi Arabia that objective to help with details financial activities, including work, profession, and also investment with legislative frameworks and also competitive advantages that vary from various other geographical locations in the base economy.

They will certainly be in four specifically designated locations in Riyadh, Jazan, Ras Al-Khair, and King Abdullah Economic City, north of Jeddah. The new areas are King Abdullah Economic City SEZ, Jazan SEZ, Ras Al-Khair SEZ, as well as Cloud Computer SEZ located in King Abdulaziz City for Scientific Research as well as Technology.


The areas will concentrate on key markets for development within the country, consisting of sophisticated production, medical modern technology, and also cloud computing.

The locations will provide rewards to companies that are both financial and also non-fiscal, including competitive corporate tax prices, duty-free imports of machinery and basic materials, 100 percent possession of business, smooth establishment treatments, and also flexibility in using foreign labor.

They will certainly gain from legislative and also affordable benefits to bring in investment in a selection of industries, consisting of logistics and modern technology, to name a few to enhance non-oil exports from Saudi Arabia.

As well as each area will have an unique area of focus.


KAEC SEZ will be a leading destination for innovative production as well as logistics. It will certainly gain from its closeness to proving ground King Abdullah University of Scientific Research and Innovation, which uses accessibility to innovative research and development centers that sustain the advancement of medical technology, as well as automated- and also electric-vehicle technology collections.

The SEZ at Ras Al-Khair, established beside its port, a leading maritime portal for mining imports and also exports, along with large-scale power as well as water jobs, will certainly have a competitive advantage in intending to be a new totally integrated maritime center, reinforced by an existing area of market leaders consisting of the IMI (Cutting-edge Medicines Campaign), Hyundai Heavy Industries, and Lamprell.

Jazan’s SEZ, in the southwest of the country, will supply a new entrance to Africa for capitalists anxious to capitalize on large-scale infrastructure jobs throughout the continent via among the biggest ports for exports in the region.

And the Cloud Computer SEZ will certainly be a hub for advancement and also collaboration on numerous innovations that will form the future, likewise profiting from the Kingdom’s affordable power and data costs.

A worldwide as well as regional shift to do service in Saudi Arabia is currently underway as multinationals, global tiny- and also medium-sized ventures, and also business owners remain to relocate local head office as well as business tasks to the Kingdom.

The SEZs, according to state economic and also monetary experts, comprise a game changer in the Kingdom’s technique to change the nation right into a worldwide company giant.

Gary Dugan, Chief Executive Officer at The Global CIO Workplace, informed Arab News: “The SEZs are an emphatic signal to the world that Saudi Arabia is open for company with the globe.”

Dugan, who has experience in financing throughout Europe and also the Middle East for near to 40 years, routinely checks out the Kingdom on job.

Saudi Arabia’s quick financial as well as social change, nonetheless, has actually likewise been wondered about by the global area. The SEZs, several think, show the severity of the Kingdom’s commitment to international organization through foreign investment and collaboration– among the major pillars of Vision 2030.

Surrounding Gulf countries such as the UAE have had their financial areas for a number of decades. The initial totally free zone at Jebel Ali port (Jafza) was established in 1985, real estate a power plant as well as desalination plant, with just 19 business. Today it hosts more than 9,500 companies as well as is thought about a leading international complimentary zone.

Dugan stated: “The advancement of financial areas will certainly need the Kingdom to open itself to the wide world, needing to take on other nations in the region, such as the UAE which have actually had their economic areas for some decades.

” The Kingdom’s new financial zones will certainly open itself to international competition– a step that might be an additional steppingstone in bringing the nation right into a highly affordable global economic climate.

” Saudi Arabia is making this step at a really appropriate time when new companies with worldwide aspirations remain to look the globe for a tax-efficient hub, with a significant pool of enlightened employees and well sustained by the government,” he added.

Other experts, such as Afiouni, claim that with the facility of the SEZs, Saudi authorities could “trigger a major behavior change at international firms.”

He claimed: “The Saudi authorities are accompanying this strategic effort by offering international organizations and also capitalists an investor-friendly atmosphere as well as an affordable environment.”

Turab Saleem, companion and head of hospitality for the Center East and North Africa area at global real estate working as a consultant Frank Knight, informed Arab Information that the SEZs were likewise a reflection of the broader geopolitical shifts within the Center East that would certainly make it simpler for various countries in the area and worldwide to now do company in the Kingdom.

” These initial economic areas are the primary step toward opening the doors for local and also worldwide financial investment in KSA. This is well supported by the recent peace initiatives released in the area, consisting of the revival of Saudi-Iran connections, the tranquility deal with Yemen, and cooling off of other regional dispute, which are action in the appropriate direction,” Saleem stated.

” It was due time to increase economic situation by stabilizing partnerships in the region.”

Inevitably, the SEZs are a critical part of Crown Prince Mohammed bin Salman’s economic vision for the nation– a way to relocate far from an exclusively oil-based economic situation to set up an identical economic situation that proclaims in a new age for Saudi Arabia as a rising international hub for business, advancement, and also entrepreneurship.

Dugan claimed: “The economic zones are among the final considerable legs of the 2030 vision. The federal government has made an extreme shift in the growth of the domestic base with massive aspiration, as well as innovation.

” The phase is to bring the world to Saudi Arabia– to confirm that the country is genuinely a vital component of the worldwide economy.”

Last Updated: 20 April 2023

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