Local Content in Saudi Arabia
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.