Saudi Arabia Special Economic Zones (SEZs)
Alongside major infrastructure projects, the government of Saudi Arabia is creating a network of Special Economic Zones (SEZs) to attract targeted investment and promote advanced industries as apart of the Kingdom’s next phase of growth under Vision 2030.
Saudi Arabia’s free zones aim to strengthen the non-oil economy, promote economic diversification and knowledge transfer, empower supply chain sectors, create employment and incubate emerging industries in the Kingdom, through a combination of competitive incentives, a conducive environment for investors and providing the right regulatory framework for growth and development.
Part of the National Investment Strategy, the SEZs feature special legislative frameworks and regulations tailored for qualitative investment in certain economic activities. Typical incentives include:
Sovereign works closely with MISA and other regulators to help clients identify the most suitable free zone, secure approvals and set up compliant operations within these growth areas.
The Kingdom currently hosts five SEZs: the Special Integrated Logistics Zone (SILZ) in Riyadh, the King Abdullah Economic City (KAEC), Ras Al-Khair, Jazan Economic City (JEC) and the virtual Cloud Computing Zone. Each serves a defined sector and offers a tailored set of fiscal and operational incentives with world class infrastructure built to service the industries they are looking to attract.
Additional SEZs are being developed to serve renewable energy, industrial and technology-based sectors.
The Special Integrated Logistics Zone (SILZ)
The SILZ is located within King Salman International Airport in Riyadh City, which is currently being developed adjacent to and will replace King Khalid International Airport. The first SEZ to become fully operational., SILZ forms part of the Kingdom’s drive to make Riyadh a global logistics hub linking key global markets in Asia, Europe and Africa.
The SILZ provides direct airside access and a streamlined regulatory framework for warehousing, distribution and supply chain management operations, as well as trading and light manufacturing.
Companies registered within SILZ may be fully foreign-owned and benefit from significant tax incentives, including a 0% corporate income tax for 50 years, and exemptions from withholding tax, VAT and customs duties for qualifying logistics-related activities like maintenance, storage, and value-added services.
SILZ operates a bonded corridor connecting the zone directly to airport facilities and its administrative systems are designed for rapid import and export processing. These measures together with flexible Saudisation requirements make it a strong base for regional supply-chain and logistics operators.
King Abdullah Economic City (KAEC) Special Economic Zone
Located on the Red Sea coast in Makkah al-Mukarramah Province, the King Abdullah Economic City (KAEC) SEZ covers approximately 60 sq kms. Its location offers direct access to African markets and global trade routes supported by King Abdullah Port, one of the region’s most advanced facilities. The port handles around 30 million tonnes of cargo each year and includes dedicated terminals for bulk goods and vehicles.
KAEC targets sectors such as automotive supply chains and assembly lines, ICT and electronic light manufacturing, consumer goods, pharmaceuticals, medical technologies and logistics services.
Companies within the zone benefit from a 5% rate of Corporate Income Tax (CIT) for up to 20 years, 0% withholding tax on profit repatriation, and 0% customs duties on capital equipment/inputs, plus VAT relief on intra-zone activities and expat levy exemptions. The city’s transport links and access to a skilled workforce make it a practical base for regional and global operations.
Ras Al-Khair Special Economic Zone
The Ras Al-Khair SEZ lies in the Eastern Province and covers around 20 sq kms close to Ras Al-Khair Industrial City. The zone supports the development of Saudi Arabia’s maritime and mining sectors and includes one of the largest shipyards in the Middle East.
Ras Al-Khair SEZ is focused on shipbuilding, maintenance, repair and operation, as well as offshore drilling platform maintenance, repair and operation. It also caters for industries connected to aluminium and phosphate processing.
Companies within the zone benefit from a 5% rate of Corporate Income Tax (CIT) for up to 20 years, 0% withholding tax on profit repatriation, and 0% customs duties on capital equipment/inputs, plus VAT relief on intra-zone activities and expat levy exemptions. With its port access and established industrial base, Ras Al-Khair is set to become an anchor point for energy and heavy manufacturing in the Gulf.
Jazan Economic City (JEC)
Jazan Economic City (JEC) occupies a strategic location in Jazan Province on Saudi Arabia’s southwest coast along a maritime corridor that connects Europe, East Africa and Asia. The project, supported by Saudi Aramco, integrates a deep-water seaport, industrial areas and residential districts. It is designed to serve the energy, petrochemical and heavy manufacturing sectors, while also accommodating food processing, mineral transformation and logistics services.
The zone benefits from modern infrastructure, port facilities and efficient supply-chain connectivity. Companies operating within JEC can take advantage of customs exemptions, simplified import and export processes and access to local industrial services provided under the wider Jazan development plan.
Companies within the zone benefit from a 5% rate of Corporate Income Tax (CIT) for up to 20 years, 0% withholding tax on profit repatriation, and 0% customs duties on capital equipment/inputs, plus VAT relief on intra-zone activities and expat levy exemptions.
Cloud Computing Special Economic Zone
The Cloud Computing Special Economic Zone is a virtual SEZ that is part of King Abdulaziz City for Science & Technology in Riyadh City. The zone is being developed to strengthen Saudi Arabia’s digital infrastructure and attract global technology, data and AI sector firms. It will focus on cloud computing services, operate data centres and cybersecurity, creating a dedicated ecosystem for high-value digital industries.
Companies within the zone benefit from a 5% rate of Corporate Income Tax (CIT) for up to 20 years, 0% withholding tax on profit repatriation, and 0% customs duties on capital equipment/inputs, plus VAT relief on intra-zone activities and expat levy exemptions. The zone is expected to draw major international technology providers as Saudi Arabia expands its role in data management and digital innovation.
These are some of the new special economic zones that are being developed to further encourage private sector growth with flexible and supportive regulations. The programme is a core part of Saudi Arabia’s wider strategy to diversify the economy and position itself as a regional centre for logistics, advanced manufacturing and digital services.
How Sovereign can assist
Saudi Arabia’s Special Economic Zones present a range of new opportunities for international investors although several are still at different stages of development. Choosing the right structure and jurisdiction is essential because each zone has its own regulatory framework and eligibility criteria. International companies must evaluate how these economic zones can expand business opportunities, and how they can benefit from the special tax treatment.
Sovereign’s consultants in Saudi Arabia and Dubai advise clients on entity formation and compliance within these zones and across the wider Saudi market. Our team will assess your core business activities, operational requirements and long-term objectives to determine the most suitable structure under the Economic Cities and Special Zones Authority (ECZA) framework.
We will also provide ongoing support with corporate governance, tax registration and regulatory obligations to ensure that your business remains compliant as it grows within the Kingdom.
Please contact us if you have any questions or queries and your local representative will be in touch with you as soon as possible.
