Saudi Arabia has removed the financial levy on expatriate workers in licensed industrial facilities. The decision marks a major shift in industrial policy and cost management.
The Cabinet approved the move under the leadership of Crown Prince Mohammed bin Salman. Consequently, the government aims to boost manufacturing competitiveness and long-term industrial resilience.
At its core, the decision lowers operational costs for factories across the Kingdom. Previously, the levy placed pressure on labor-intensive manufacturers. Now, companies can redirect savings toward expansion and modernization.
Moreover, lower costs allow factories to invest in automation and productivity upgrades. As a result, Saudi-made products gain stronger price competitiveness in global markets.
Minister of Industry and Mineral Resources Bandar Alkhorayef described the move as highly challenging. However, he stressed that long-term growth matters more than short-term revenue.
Importantly, the decision sends a strong signal to investors. Policy clarity and cost predictability remain critical for industrial investment decisions.
Additionally, the levy removal supports Saudi Arabia’s plan to unlock industrial opportunities worth nearly SR1 trillion. These opportunities target advanced manufacturing and high-value supply chains.
Meanwhile, officials confirmed that localization goals remain unchanged. Instead, the policy supports industrial growth that creates sustainable jobs for Saudi citizens.
Since 2019, industrial employment has expanded significantly. Jobs rose by 74 percent and reached 847,000 workers. At the same time, localization increased to 31 percent.
Furthermore, a growing industrial base improves training capacity for Saudi talent. Officials believe expansion supports better skills development over time.
The decision also builds on recent industrial momentum. Between 2019 and late 2024, factory numbers increased sharply across the Kingdom.
During that period, industrial facilities grew from 8,822 to over 12,000. Meanwhile, total investment rose by 35 percent to SR1.22 trillion.
In addition, industrial GDP expanded by 56 percent and exceeded SR501 billion. Looking ahead, Saudi Arabia targets SR895 billion by 2035.
Globally, manufacturing competition continues to intensify. Supply chains are shifting, and countries compete for new industrial investments.
Therefore, easing cost pressures strengthens Saudi Arabia’s position. The move reinforces industry as a pillar of economic diversification.
For manufacturers, the message remains clear. Saudi Arabia wants factories to grow, invest, and compete worldwide.
