Local content is considered one of the main pillars for achieving Saudi Vision 2030, which aims to diversify sources of income and reduce dependency on oil by enhancing local production and increasing the participation of national resources across various stages of the supply chain. The Kingdom is working toward building a sustainable and globally competitive economy, and the promotion of local content has become a strategic requirement for both public and private sector projects. This shift is creating tremendous opportunities for Saudi enterprises and local talent.

What is Local Content?

The concept of local content refers to the added value to the national economy through companies’ expenditure on Saudi resources. This includes Saudi labor, local raw materials, services provided by local suppliers, and assets and technologies developed or produced within the Kingdom. The greater the contribution of these components, the higher the local content percentage. Today, this concept is used as an evaluation tool for companies dealing with government entities and directly influences their chances of winning tenders and government contracts.

Objectives of Local Content in Saudi Arabia

Increasing Saudization: By encouraging companies to hire Saudi nationals, especially in high-value sectors such as manufacturing, energy, and technology.

Supporting the national economy: By reducing reliance on imported goods and services and redirecting spending toward the local market.

Empowering SMEs: By enabling small and medium enterprises to compete within national supply chains, thus contributing to economic growth and job creation.

Improving local production quality: By motivating companies to adhere to global quality standards, making them competitive both locally and internationally.

Attracting investment: High local content levels in projects are considered a positive indicator for investors, reflecting a mature and promising business environment.

Entities Involved in Local Content

The Local Content and Government Procurement Authority is the primary entity overseeing this area. It establishes frameworks and policies that require government entities to increase the percentage of local content in their procurement processes.
The Authority also evaluates suppliers’ performance and offers incentives to entities that prioritize local products. Additionally, it works in coordination with other national programs such as the Economic Offset Program and the Center for Spending Efficiency.

Local Content and Supply Chains

The importance of local supply chains lies in their ability to build a resilient economy that mitigates risks from global crises such as pandemics or disruptions in international transport. By developing local logistics and manufacturing capabilities, companies can ensure continuous product and service availability and maintain better control over costs. Businesses that invest in local supply chains gain greater capacity for innovation and enjoy closer relationships with their customers in the Saudi market.

Local Content and Industrial Localization

Industrial localization is one of the clearest dimensions of the local content strategy. It involves establishing factories within the Kingdom, transferring technologies, training Saudis to operate and maintain equipment, and replacing imported materials with locally sourced ones.
The oil and petrochemical sectors offer successful examples—companies like Aramco and SABIC are actively enhancing local manufacturing for drilling equipment, processing units, and chemical materials. Major initiatives are also underway in fields such as military industries, pharmaceuticals, and advanced technologies to ensure they become fully localized.

How Do Companies Benefit from Embracing Local Content?

The Saudi government provides multiple incentives to businesses that increase their contribution to local content, including:

Priority in government contracts: Companies with higher local content scores receive additional points in tender evaluations.

Strategic partnership opportunities: With large national entities seeking local suppliers to enhance industrial integration.

Facilitated financing: Provided by institutions such as the Saudi Industrial Development Fund and the Saudi EXIM Bank to support the expansion of local factories.

Reduced logistical costs: Through reliance on internal supply chains that are less vulnerable to external disruptions.

The Role of TATWEER ALFA in Obtaining and Enhancing Local Content Certification

TATWEER ALFA is a leading company in supporting enterprises to meet local content requirements in Saudi Arabia. It offers integrated solutions to help clients obtain local content certificates issued by the Local Content and Government Procurement Authority.
The company begins with a comprehensive analysis of the enterprise’s operations and supply chains, then develops a practical plan to increase the local component in its business processes—whether through workforce localization, enhancing local manufacturing, or activating cooperation with local suppliers.
TATWEER ALFA also provides technical support in preparing reports, uploading documents to official platforms, and tracking periodic assessments to ensure continuous improvement in local content scores. This, in turn, enhances the chances of winning government tenders and strengthens the company’s competitiveness in the Saudi market.

Within the ongoing efforts exerted by the Kingdom of Saudi Arabia to achieve the goals of Vision 2030, the “Nitaqat” system emerges as one of the key initiatives launched by the Ministry of Human Resources and Social Development to regulate the labor market and increase Saudization rates. This system has had a wide-reaching impact, as the term “Nitaqat Saudi Arabia” has become closely associated with fundamental reforms in the employment structure of private sector establishments.

What is the Nitaqat System?

Nitaqat is a program launched by the Ministry of Labor (now the Ministry of Human Resources) aimed at classifying private sector establishments based on the percentage of jobs localized (Saudization). It is considered one of the most prominent Saudization initiatives in the Kingdom.

Establishments are categorized into several levels:

• Green Nitaqat (High, Medium, and Low)
• Platinum Nitaqat
• Yellow Nitaqat
• Red Nitaqat

This classification is based on the extent of a company’s commitment to hiring Saudi nationals compared to other companies of similar size and activity.

What’s the Difference Between Nitaqat Qiwa and Nitaqat Ministry of Labor?

Nitaqat Ministry of Labor was the common name for the system when it was directly managed by the Ministry of Labor.

Nitaqat Qiwa, however, is the upgraded version, implemented through the Qiwa digital platform, which offers a more streamlined and transparent experience for business owners.

Objectives of the Nitaqat System

The Nitaqat Saudi Arabia system aims to:

• Increase localization rates in the private sector
• Encourage companies to commit to hiring national talent
• Create a competitive labor market that supports Saudi capabilities
• Improve the quality of available jobs for citizens
• Balance between attracting foreign talent and empowering Saudis

Benefits of the Nitaqat System for Companies

• Establishments in the Green or Platinum categories receive facilitation in visa issuance and access to government services.
• Establishments in lower categories (Red and Yellow) face restrictions in employment, transfers, and government dealings.
• Improving classification in Nitaqat Qiwa opens doors for business expansion and eligibility for tenders and government contracts.

Updates in the Nitaqat System

The Ministry has introduced significant upgrades through the “Nitaqat Developer” version, which incorporates more performance metrics, such as:

• Average wages
• Employment continuity
• Targeted Saudization ratios over a 3-year period

These updates are part of the comprehensive Qiwa platform, which aims to centralize all labor-related services in one place.

How Does TATWEER ALPHA Help Companies Improve Their Nitaqat Rating?

Tatweer Alpha is a trusted partner for establishments seeking to enhance their classification in Nitaqat Saudi Arabia. The company provides end-to-end solutions for its partners, including:

• Analyzing current gaps in Saudization and workforce localization
• Designing effective Saudization strategies tailored to the size and nature of each business
• Offering support in recruitment, training, and professional development of Saudi talent
• Monitoring performance indicators and delivering periodic reports to help increase compliance levels

Tatweer Alpha simplifies the understanding and application of Nitaqat Qiwa mechanisms, helping companies move from low-performing Nitaqat categories to Green or Platinum levels in record time — thus enabling operational sustainability and competitive growth.

Whether you’re a small enterprise or a large corporation, partnering with experts like Tatweer Alpha is a strategic investment in improving your position in the ever-evolving Saudi labor market.
Contact Tatweer Alpha today for a free consultation from experienced professionals.