The Saudi Arabian government has established a regulatory framework to create Special Integrated Logistics Zones (SILZs) at the King Khalid International Airport area.
Types of Activities
This development is an integral part of the Saudi government’s initiative to transform the country into an attractive investment destination for foreign investors and businesses operating in the logistics sector by offering substantial tax and employment benefits. SILZ will primarily cater to companies that engage in a variety of activities, including the maintenance, repair, processing, modification, development, assembly, and sorting of goods. Additionally, SILZ will provide facilities for sorting, packing, repacking, trading, distributing, handling, and utilizing goods in various forms, including simple manufacturing processes. It will also facilitate the import, export, and re-export of goods, as well as offer value-added services, logistics services, and after-sales services. Finally, SILZ will also promote the recycling of waste and electronic waste.
The oversight of SILZ falls under the responsibility of the General Authority of Civil Aviation (GACA), which is also responsible for issuing all pertinent regulations and incentives relating to businesses that operate within these zones. GACA has enacted investment regulations which detail the eligibility criteria that businesses must meet to operate within SILZ. The qualification requirements differ based on which of the following categories the investor falls under three main categories – Regional Distributors, Logistics Providers and Sector Leaders.
When comparing to mainland setups in Saudi Arabia, businesses established within a SILZ are granted an exemption from the standard Saudisation requirements for a period of five years from the date of their incorporation. Following the initial five-year period, the relevant companies will be subject to Saudisation requirements that are less stringent than those applicable to mainland businesses. We hope this blog has been useful regarding the implementation of Special Integrated Logistics Zones.
How CBD Can Assist
As a trusted corporate services provider in Saudi Arabia, we can provide market entry and expansion assistance to foreign investors in the logistics sector on the requirements set forth by GACA for establishing a business within SILZ. For more information on company formation in Saudi Arabia and Saudi Arabia visa applications, email KSA@cbdcorporateservices.com or call/whatsapp +971 56 218 4695.