New Rules for Industrial Activity Outside Zones

Oct 25, 2026•2 min read

Saudi Arabia approved updated regulations in 2025 governing industrial activities carried out outside designated industrial zones, setting clearer rules for where such businesses may operate inside cities and on urban outskirts. The framework classifies 1,143 industrial activities

Under the new rules, 46 activities with low environmental impact are allowed to operate within cities on commercial streets, provided they meet the applicable requirements. Activities with higher environmental impact may be based on urban outskirts if all licensing and site conditions are satisfied.

Operators generally need several approvals before starting work. These include an industrial license from the Ministry of Industry and Mineral Resources, an environmental permit from the National Center for Environmental Compliance, a municipal license through Balady, and Safety and Civil Defense approvals. Additional health, environmental, land-use, or sector-specific permits may also apply depending on the activity.

How the industrial license works

The industrial license is issued in three stages. The establishment stage is valid for one year and renewable but does not allow production. The construction stage is also valid for one year and renewable, and may support applications for customs exemptions on machinery, equipment, and spare parts. The production stage permits actual industrial operation once all requirements are completed.

Applications for industrial activities outside designated zones are submitted through the Ministry of Industry and Mineral Resources' industrial licensing services, while municipal licensing goes through Balady. There is no single fixed fee for all activities; municipal fees vary by activity, municipality, site, and license details and must be calculated using Balady's fee calculator after selecting the activity and location.

The updated regulations matter for entrepreneurs and small manufacturers who want to operate closer to urban markets, offering a defined path that balances business flexibility with environmental and safety requirements.

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