Amendments to the rules of deposit zones in Saudi Arabia and storage periods
The Zakat, Tax and Customs Authority has proposed amendments to the regulations governing bonded zones in Saudi Arabia, through the “Istilaa” platform. This step aims to regulate the legislative environment for customs and logistics activities and operations within these zones, including warehousing, handling, e-commerce, value-added processing, maintenance, and consolidation, as well as defining controls related to the entry, exit, and retention periods of goods.
The Kingdom's vision and the development of the logistics sector
These amendments come within the context of the major economic transformations the Kingdom is undergoing as part of the objectives of Vision 2030, specifically the National Transport and Logistics Strategy. Through these ongoing updates, the Kingdom aims to solidify its position as a global logistics hub connecting the three continents of Asia, Europe, and Africa. Developing the infrastructure and legislation for customs and logistics zones is a fundamental pillar for facilitating cross-border trade, reducing operational costs, and enhancing the efficiency of supply chains.
The economic impact of regulating deposit zones in Saudi Arabia
These amendments are expected to have a broad and positive impact both locally and regionally. Locally, they will contribute to attracting more foreign direct investment and supporting small and medium-sized enterprises (SMEs) operating in the e-commerce sector by providing flexible logistics platforms. Regionally and internationally, the clarity and flexibility of the legislation, such as allowing the storage of goods for periods of up to five years, will enhance the competitiveness of Saudi ports and economic zones compared to their counterparts in the region, making the Kingdom a preferred destination for global companies to manage their regional inventory.
E-commerce support and maintenance operations
The amendments included precise regulations for e-commerce activities within bonded warehouses, defining them as the sale, marketing, and order placement of goods stored electronically. This allows these warehouses to be used as logistics platforms to expedite order fulfillment. The regulations also addressed maintenance operations, permitting the import of damaged goods from within or outside the Kingdom for repair, with customs duties levied on the parts used in the repairs upon the goods' release to the local market.
Simple grouping and merging controls
The amendments clarified that simple assembly operations include activities aimed at combining or assembling components of completed or semi-complete products into a single commodity, without altering the nature of the goods or their customs classification. Mixing and combining operations were defined as the consolidation of identical or similar goods into a single shipment, provided that this does not result in any change to their essential characteristics.
Types of licenses and government integration
The amendments defined the types of licenses, including a “deposit area license” for basic activities such as storage and handling, and a “deposit tank area license” which adds the storage of liquid petroleum and petrochemical derivatives. The regulations stipulated the submission of proof of property ownership or a lease agreement for a period equal to the license duration. To ensure integrated oversight, the amendments allowed employees of other government agencies to access these areas to perform their duties within their respective jurisdictions.
Five years maximum for goods storage
The amendments stipulate a maximum storage period of five years for goods within designated storage areas, based on an entry request specifying the nature of the goods. The Authority reviews the request and may reduce the period if the nature of the goods does not permit long-term storage. For hazardous or radioactive goods, the storage period is determined according to relevant regulations, with the possibility of extension for other goods upon submission of justification and approval by the Authority.
Customs exemptions and material consumption
The regulations permit the entry of goods from outside the Kingdom without requiring full customs clearance permits, after coordination with the relevant authorities, while requiring prior permits for hazardous goods or weapons. Temporary storage of sealed containers is also permitted. Materials used within the zone for operational purposes (such as inks and petroleum derivatives for vehicles) may be consumed without customs duties, according to approved forms. Conversely, duties and taxes are levied on goods imported for local consumption within the zone, such as food supplies for employees.
Logistics Zone Operators' Obligations
Finally, the amendments defined the obligations of the deposit zone operators, most notably conducting a periodic inventory of stock, providing the Authority with periodic reports, cooperating with the Authority’s inspectors during inspection tours, and submitting all approved documents and forms when importing or exporting goods, to ensure the highest levels of compliance and transparency.
