Cancellation of the financial levy for industrial workers in Saudi Arabia: Details and impact

In a historic move reflecting the Kingdom of Saudi Arabia's commitment to supporting its industrial sector, the Council of Ministers issued a decision to abolish the fees imposed on expatriate workers in licensed industrial establishments. This decision is the culmination of the ongoing support and empowerment the sector receives from His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince and Prime Minister – may God protect him – to solidify the Kingdom's position as a leading global industrial power.

Context of the decision and its strategic dimensions

This decision did not come out of thin air; rather, it complements previous initiatives that began in 2019, when the government covered the fees for industrial facilities for five years. The shift from "temporary exemption" to "permanent cancellation" sends a strong message of reassurance to local and international investors, confirming the stability of the Kingdom's legislative and regulatory environment. This measure directly aims to reduce operating costs for factories, thereby enhancing the competitiveness of Saudi products under the "Made in Saudi Arabia" banner in global markets and supporting the strategy of diversifying income sources away from oil.

Expected economic impact

This decision is expected to bring about a qualitative shift in the performance of industrial establishments, particularly small and medium-sized enterprises (SMEs). By easing financial burdens, these establishments will be able to reinvest capital in upgrading production lines, adopting Fourth Industrial Revolution technologies, and implementing automation, thereby increasing production efficiency and quality. The decision will also contribute to attracting more foreign direct investment seeking a stimulating business environment and lower operating costs compared to regional and international markets.

Numbers speak louder than words: Significant leaps in the industrial sector

This step builds on tangible successes achieved during previous years of exemption. According to official data, the industrial sector witnessed remarkable growth between 2019 and the end of 2024, where:

• The number of industrial establishments increased from 8,822 factories to more than 12,000 establishments.
• The total value of industrial investments increased by 35%, jumping from 908 billion riyals to 1.22 trillion riyals.
• Non-oil exports recorded a growth of 16%, reaching 217 billion riyals.
• The number of jobs in the sector increased by 74%, reaching 847,000 employees, with the localization rate increasing to 31%.
• Industrial GDP grew by 56% to exceed 501 billion riyals.

Towards a promising industrial future

The decision to cancel the financial compensation is in line with the objectives of Saudi Vision 2030 and the National Industrial Strategy, which aspires to triple the industrial GDP to reach 895 billion riyals by 2035. It also paves the way for the introduction of huge investment opportunities exceeding one trillion riyals, which will strengthen local supply chains and create thousands of quality job opportunities for citizens, confirming the Kingdom’s determination to move forward with its comprehensive industrial renaissance.