In a new regulatory step that reflects the Kingdom's acceleration in creating a competitive investment environment, the official Umm Al-Qura newspaper published Regulations for Special Economic Zones, setting an integrated legal framework that gives companies greater flexibility and quality incentives, supporting the attraction of quality investments and promoting economic growth.

New regulatory step that reflects the Kingdom's acceleration in creating a competitive investment environment.

The Official Gazette published the regulations Special Economic Zones in Jazan, Cloud Computing Zone, King Abdullah Economic City and Ras Al Khair, after the Cabinet approved them, in a move aimed at organizing the business environment within these zones according to special and independent rules.

Special Economic Zones.

According to the decision, companies licensed to carry out activities within the special economic zones are exempted from the provisions of the Companies Law, the Commercial Registry Regulations Trade Names, giving them regulatory flexibility commensurate with the nature of these zones and their investment objectives.

The Cabinet decision stipulates that the Special Economic Zones and Cities Authority, in coordination with the Ministry of Commerce, shall issue rules governing companies operating in these zones, including their governance, rights and duties, obligations and responsibilities.

Independent regulations for each zone

KAEC Special Economic Zone:

The regulation includes 35 articles, and its implementation begins 90 days after the date of its publication. The first article identifies the concerned entity as Emaar Economic City Company.

Ras Al Khair Special Economic Zone:
Its regulation consists of 34 articles, and comes into effect 90 days after publication, with the Royal Commission for Jubail and Yanbu identified as the concerned entity.

Ras Al Khair Special Economic Zone:
Its regulation consists of 34 articles, and comes into effect 90 days after publication.

Cloud Computing Special Economic Zone:
Its regulation includes 31 articles, comes into effect after 90 days, and identifies the concerned entity as the Communications, Space and Technology Commission in coordination with the Royal Commission for Riyadh City.

Ras Al Khair Special Economic Zone:
Its regulation includes 31 articles, comes into effect after 90 days, and identifies the Royal Commission for Jubail and Yanbu

Jazan Special Economic Zone:
Its regulation included 34 articles, to be applied 90 days after publication, with the Royal Commission for Jubail and Yanbu as the concerned entity.

Royal Commission for Jubail and Yanbu.

Company Form and Nationality

The four regulations clarify that companies established within special economic zones must take the form of a limited liability company, whether owned by one person or several persons, with the Cities and Special Economic Zones Authority issuing the rules governing this in agreement with the Ministry of Commerce.

The four regulations clarify that companies established within special economic zones must take the form of a limited liability company, whether it is owned by one person or several persons.

Companies established in accordance with these regulations are considered Saudi nationals, and their headquarters must be located within the SEZ.

Labor and Workers Regulation

With regard to supervising the implementation of labor and workers' provisions, the competent authority, in coordination with the Ministry of Human Resources and Social Development, shall follow up on the implementation of the regulations and take the necessary measures in accordance with the provisions of the regulation and approved regulations.

Regulation of Labor and Workers.

Zakat and Taxes

The regulations granted licensed companies special tax treatment, as these establishments are subject to income tax according to the applicable tax regulations, while the provisions of the Zakat collection system do not apply to them.

Zakat and Taxes

Zakat and Taxes

VAT and customs duties

Three regulations, those of King Abdullah Economic City, Ras al-Khair and Jazan - without the cloud computing zone - stipulate the application of zero percent VAT on goods supplied from the rest of the Kingdom to licensed establishments, as well as supplies between establishments within the same zone or between different special economic zones, provided that the goods are subject to customs suspension status and related to licensed activities.

Regulations of King Abdullah Economic City, Ras al-Khair and Jazan - without the information cloud computing zone - provide for the application of zero percent VAT on goods supplied to licensed establishments from other regions of the Kingdom.

Goods imported from outside the Kingdom to these zones are also considered outside the scope of VAT, as long as they are subject to customs suspension and related to the activities of the licensed establishment.

Goods imported from outside the Kingdom to these zones are also considered outside the scope of VAT.

With regard to customs duties, the same three regulations stipulate the suspension of duties on goods entering the licensed establishments and associated with their activities, when they are placed under one of the customs suspension modes according to the Unified Customs System, thus enhancing the attractiveness of these areas as advanced investment and logistics centers.