Saudi Industrial Investments Surge by 54% After Expat Levy Exemption
🔅The Saudi Chambers of Commerce announced that industrial investments in Saudi Arabia have surged by 54%, reaching approximately 1.5 trillion SAR. This growth follows the 2019 Cabinet decision to exempt the industrial sector from expat levies (fees imposed on foreign labor in industrial establishments), boosting the Kingdom’s economy and attracting foreign investments.
🔅According to the report by the Saudi Chambers of Commerce, which evaluated the economic impact of covering expat fees from 2019 to 2025, the analysis was based on 7 key economic indicators:
1. Contribution to Saudi Arabia's GDP.
2. Growth in the number of industrial establishments.
3. Increase in the volume of investments.
4. Growth in employment opportunities.
5. Expansion of non-oil exports.
6. Enhancement of national product quality.
7. Attraction of foreign investments.
🔅The report emphasized that the exemption from expat levies has significantly boosted the industrial sector and the broader economy. The sector's GDP contribution rose from 392 billion SAR in 2019 to 592 billion SAR in 2023, accounting for 14.7% of the Kingdom’s total GDP. The number of industrial establishments increased by 55.6%, reaching 11,868 factories in 2024. Furthermore, industrial investments jumped by 54%, hitting 1.5 trillion SAR, compared to 992 billion SAR previously.
🔅The report also highlighted a surge in foreign direct investments (FDI). The number of foreign factories grew from 622 to 1,067 factories, representing a 71.5% increase, while foreign capital in the sector rose from 43 billion SAR to 93 billion SAR, reflecting 116.2% growth.
🔅Industrial Sector Employment Growth:
As of Q1 2024, the industrial sector employed 1.2 million workers, including 358,000 Saudis, achieving a Saudization rate of 28%. The sector created 82,000 new jobs for Saudis between January 2023 and March 2024, marking a 59% growth in employment.
🔅Non-Oil Export Growth:
Non-oil exports increased by 12%, reaching 208 billion SAR, driven by the opening of new markets and strategic trade agreements supporting Saudi Vision 2030.
🔅Improving National Product Quality:
The exemption policy also improved the quality of Saudi products. This improvement was achieved through the adoption of advanced technologies, localization of human talent, and enhancing productivity to meet local market demands. The number of products awarded the Saudi Quality Mark from the Saudi Standards, Metrology, and Quality Organization also increased, supporting the demand for Saudi-made goods both domestically and internationally.
🔅It is worth noting that the Cabinet decision in September 2019 to exempt industrial establishments from expat levies, recently extended until 2025, has benefitted over 8,000 factories. The total cost of this levy coverage is estimated at 5 billion SAR.