Setting up a
Manufacturing business.
Saudi manufacturing is a Vision 2030 priority — 'Made in Saudi' branding, IKTVA preferences, and 36 industrial cities (managed by Modon) provide land + utilities + tax incentives. Foreign manufacturers can own 100% of operations, get land at concessional rates, and access Saudi Industrial Development Fund (SIDF) loans up to 50% of project value.
What's specific to Manufacturing.
License codes, capital, regulators, and quirks that competitors gloss over.
- Activity codes: 1000-3399 range covers most manufacturing
- Capital: SAR 1M+ recommended for credibility; SIDF loans help for larger projects
- Land: Modon allocates industrial plots at SAR 0.5-3/m²/yr (extremely cheap vs commercial)
- SASO: Saudi standards for product certification
- SIDF: Saudi Industrial Development Fund offers up to 50% project loan at low interest
- Saudization: easier for manufacturing — skilled trades quota lower, vocational training subsidized
- Energy: subsidized industrial electricity rates
- Export: GCC customs union + Saudi-Egypt-Jordan trade agreements provide regional market access
What we see go wrong.
- ✗ Skipping Modon application for land — paying commercial rates that are 50x higher than industrial
- ✗ Not engaging SIDF early — financing significantly cheaper than commercial banks for qualifying projects
- ✗ Underestimating SASO product certification timeline — 6-12 months
- ✗ Not optimizing supply chain for IKTVA scoring (preference for Saudi-Aramco-aligned suppliers)
- ✗ Locating outside industrial cities — losing utility subsidies + cluster benefits
Common questions.
Yes — Modon manages 36 industrial cities. Application process takes 2-4 months. Plot allocation depends on activity, scale, employment. Costs: SAR 0.5-3/m²/yr (vs SAR 50-200/m²/yr for commercial).
In-Kingdom Total Value Added — Saudi Aramco's localization scoring program. Suppliers with higher IKTVA scores get procurement preference. Manufacturing locally + employing Saudis raises score significantly.
Loans up to 50% of project value at 1-2% interest, 20-year tenure. Targets export-oriented or import-substituting manufacturing. Application process is rigorous (6-12 months) but the financing terms are unmatched.