SAUDI EXPATRIATES

Crown Prince Mohammed bin Salman chaired the Cabinet that approved the decision. For many years, factories were required to pay this levy, which increased operating expenses. Removing it shows Saudi Arabia’s strong commitment to making its industrial sector more competitive, attractive to investors, and better prepared for long-term growth.

The main benefit of abolishing the expat levy is lower operating expenses for industrial facilities. Related: Saudi Arabia cancels Expat Levy fee for Industrial workers

For labor-intensive factories, the levy was a repeated financial burden. The elimination of this expense will allow firms to reinvest in automation, increase productivity, expand their operations, and better train their employees.

Minister of Industry and Mineral Resources Bandar Alkhorayef described the decision as one of the most difficult policy choices in the sector’s history. His main point was that fostering long-term industrial growth is more important than increasing government revenue.

Additionally, as the Kingdom seeks to increase non-oil exports, lower production costs help Saudi-made goods compete more successfully in global marketplaces.

The removal of the levy sends a positive signal to both local and international investors. Stable policies and predictable costs are key factors when companies decide where to invest.

Saudi Arabia has strengthened its current incentives for manufacturing and created a better overall climate for business by removing the expat fee.

The Kingdom is currently offering more than 800 industrial investment opportunities worth about SR1 trillion. It is also focusing on attracting advanced manufacturing projects and high-value supply chains.

This policy change further positions Saudi Arabia as a leading manufacturing hub in the region. See Also: Saudi Arabia and India agrees on mutual short-stay visa exemption

Although the levy applied to expatriate workers, officials have stated that the decision did not reduce the importance of job localization for Saudis.

Instead, the government believes that a growing and profitable industrial sector will create more job opportunities and better training for Saudi citizens.

Since 2019, employment in the industrial sector has increased by 74%, reaching 847,000 workers. During the same period, localization rates rose to 31%.

The government’s view is that strong industrial growth allows companies to hire, train, and retain more Saudi talent than industries facing high operating expenses.

This decision builds on the strong performance of Saudi Arabia’s industrial sector over the past five years.

From 2019 to the end of 2024, the number of industrial facilities grew from 8,822 to more than 12,000. Total industrial investment increased by 35%, reaching SR1.22 trillion. Industrial GDP also rose by 56%, exceeding SR501 billion. Future projections are for a tripling of Saudi Arabia's industrial GDP to SR895 billion by the year 2035. Manufacturing is expected to play an important role in the Kingdom's economic diversification plans. Trending: Saudi Arabia launches 5 new Absher services

With the abolition of the expat levy, global supply networks shift, and nations compete for manufacturing investments. Saudi Arabia demonstrates that industrial development is still a strategic goal for economic growth and resilience by lowering costs and strengthening long-term governmental support.

For manufacturers, the message is clear: Saudi Arabia is committed to expanding its industrial sector and wants factories to invest, grow, and compete on a global scale.