Special Economic Zones in Saudi Arabia
Learn more about Saudi Arabia’s Special Economic Zones (SEZs) and the incentives they offer for global companies setting up and scaling a business in the Kingdom.
Special Economic Zones in Saudi Arabia
As part of its drive to diversify the economy beyond oil and attract foreign investment, Saudi Arabia has established Special Economic Zones (SEZs) in strategic hubs, including King Abdullah Economic City (KAEC), Ras Al-Khair, Jazan, and the Cloud Computing Zone.
These zones combine strong fiscal and regulatory incentives with prime locations near major trade routes, ports, and emerging industrial clusters, making them attractive entry points into the Kingdom.
What a SEZ Status Gets You
Tax Incentives
- A 5% corporate income tax rate for up to twenty years
- 0% withholding tax on profit repatriation from the SEZ to foreign countries
- Customs duties deferral for goods within the SEZ or zero customs duties on capital equipment and inputs within the SEZ
Fiscal and Regulatory Incentives
- 100% foreign ownership
- Flexible employment regulations
- Streamlined business setup procedures
- Sector-specific incentives
SEZ Regulatory Frameworks (2026)
Key provisions established across the frameworks include:
All SEZ entities must be registered as LLCs, whether owned by one person or multiple persons
Company head offices must be physically located within the designated zone
The Economic Cities and Special Zones Authorities (ECSZ) hold the sole authority to issue licenses, permits and regulatory approvals.
Licensed entities remain subject to income tax; the Zakat Collection Law does not apply
Withholding tax (WHT) exemptions are available for qualifying activities in the Jazan, Ras Al-Khair and KAEC SEZs.
Customs duties are suspended on goods imported into licensed SEZ entities, provided they relate to licensed activities and are placed under a duty suspension regime under the Unified Customs Law.
A 0% VAT rate applies to goods supplied to SEZ establishments or between SEZ entities, provided they are under customs suspension and used for licensed activities in line with ECZA and ZATCA criteria.
The Four Special Economic Zones: Locations, Sectors, and Scope
King Abdullah Economic City (KAEC)
KAEC's position on the Red Sea gives it direct proximity to African and European markets, making it the natural home for companies in advanced manufacturing.
Location: Makkah
Target Sectors:
- Automobile supply chain and assembly
- Consumer goods
- ICT and electronic light manufacturing
- Pharmaceuticals
- MedTech
- Logistics
Ras Al-Khair
Ras Al-Khair is built around Saudi Arabia's ambition to develop a $14 billion maritime industry. It's designed to attract companies in shipbuilding, offshore platforms, and marine maintenance and repair.
Location: Eastern Province
Target Sectors:
- Shipbuilding and marine repair and overhaul (MRO)
- Rig platforms and offshore MRO
Jazan
Jazan's Red Sea location and proximity to the Kingdom's key mining assets make it a natural processing and trade gateway to African and Asian markets.
Location: Jazan Province
Target Sectors:
- Food processing
- Metal conversion and processed minerals
- Logistics
Cloud Computing SEZ (KACST)
Unlike the other three zones, the Cloud Computing SEZ is not tied to a single geographic location. Licensed entities can build and operate data centers across the Kingdom.
Location: Innovation Tower at King Abdulaziz City for Science and Technology (KACST)
Target Sectors:
- Cloud computing services
- Data center infrastructure
- AI and digital infrastructure
AstroLabs Advantage
| Offering | AstroLabs | Corporate Services Companies offering PRO & GRO | Law Firms | In-House |
|---|---|---|---|---|
| 40+ on-ground local team of experts |  |  | | |
| Government portal management and compliance support | | | | |
| Full management of your company licenses and certificates | | | | |
| Management of registered employees across the employee journey, from hiring to ongoing management | | | | |
| Full suite of support: PRO, GRO, HRs support and access to a pool of Saudi talent | | | | |
| National Address Registration with varied coworking and private office locations | | | | |
| Seamlessly manage GRO services online using a digital platform | | | | |
| Corporate bank account opening | | | | |
| Access to a community of 1000+ high-growth businesses in Saudi Arabia | | | | |
| Extended media and exposure support through press releases, social media coverage and articles | | | | |
| Opportunity-matchmaking with potential partners in governmental entities and corporates | | | | |
| Access to global and regional events such as BIBAN, LEAP, Seamless, etc | | | | |