Saudi Free Zones Offer Tax Perks for Tech Firms

Saudi Arabia is offering a package of tax and regulatory incentives through its special economic zones to attract technology companies and startups, under a framework that took effect in April 2026.

Eligible companies licensed in these zones can access tax benefits, customs-duty suspensions on qualifying goods, and changed VAT treatment. Licensed entities may be excluded from Zakat regulations and may receive withholding-tax exemptions. Goods moved within the same zone, between zones, or from mainland Saudi Arabia into a zone may qualify for 0% VAT when the conditions are met.

The framework also provides exemptions from some provisions of the Saudi Companies Law, the Commercial Register Law and the Trade Names Law, alongside streamlined licensing and more flexible ownership and labor rules for qualifying investors.

Cloud Computing zone and startup support

For the Cloud Computing Special Economic Zone, published 2026 incentive summaries state OECD-compliant tax treatment, an expat-levy exemption for employees and their families, and electricity priced at about USD 0.05

Startups and SMEs also benefit from the Estrdad fee-refund initiative, active in 2026 with SAR 1.5 billion allocated for reimbursements to firms in their first three years. Estrdad covers 10 categories of government fees, including commercial registration, municipality licences, expatriate levies and patent registration. Applications are open through the end of 2026, with refunds issued through 2028 via a digital portal.

Separately, a 2026 company-registration fee change gives micro businesses with revenue below SAR 200,000 and small businesses with revenue below SAR 3 million a 50% discount on registration and renewal fees.

The measures are part of wider efforts under رؤية السعودية 2030 to expand the technology sector and make it easier for entrepreneurs and investors to establish and grow their businesses in the Kingdom.

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