Saudi Arabia is supporting the industrial sector with new updates to licences.
Phased issuance of licences will offer customs exemptions to businesses in Saudi Arabia depending on the stage of development a business is in.
Establishing a project will be treated differently to construction of facilities and, eventually, the production of final products at factories in the Saudi Arabia.
Saudi industrial licences
Minister of Industry and Mineral Resources Bandar Ibrahim Alkhorayef announced the launch of an upgraded version of the industrial licence, on the sidelines of the Leap 24 International Technical Conference.
The ministry will issue the license under the provisions of the Unified Industrial Regulatory Law of the Gulf Cooperation Council (GCC) system.
The license will allow work on an industrial project in three stages:
- Establishment
- Construction
- Production
The ministry’s official spokesperson, Jarrah Al-Jarrah, explained that the issuance of the upgraded version of the industrial licence corresponds to the Cabinet’s decision to address the status of factories located outside the location of lands allocated for industrial activities in the Kingdom.
The ministry is now responsible for approving applications related to industrial activities.
The industrial licensing process will now pass through three phases that reflect the progress of the industrial project.
The first stage is the establishment stage, where the factory owner can submit requests for energy allocation, allocating a site for the project, an environmental permit for construction from the relevant authorities, and other requests.
The first stage authorises the facility’s status to be in the “establishment” stage, and the validity period is one year, subject to renewal.
However, this stage does not authorise the owner to begin actual production and practice the activity until the completion of the industrial project and fulfilment of the regulatory requirements from the competent authorities.
The second status of the industrial project is the “construction” stage, which enables the factory owner to apply for customs exemptions for machinery, equipment, spare parts, and other benefits approved by the ministry or agreed upon within the framework of the GCC, under the regulatory requirements.
The stage’s validity period is one year, subject to renewal.
The “production” phase is the final stage of the industrial license that authorises the factory owner to begin practicing the activity and actual production.
The factory owner can also apply for customs exemptions on production inputs and other benefits or exemptions approved by the ministry or agreed upon within the framework of the GCC’s regulatory requirements.
The industrial project can issue and amend the status of the industrial licensing, perform all services, and update data via the industrial platform.
The launch of the upgraded version of the industrial license is part of the efforts to achieve the objectives of the National Industrial Strategy, which aims to create an industrial economy that attracts investment, contributes to diversifying the economic base, and develops domestic products and non-oil exports.
This aligns with the objectives of the Saudi Arabia’s Vision 2030.
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