Local Content in Saudi Arabia

This report presents a review of the Local Content policy in Saudi Arabia and addresses three fundamental questions about it: What is the policy, why is it strategically important for Saudi Arabia, and how is it being implemented? While it is considered a policy priority for many GCC states—albeit to varying degrees—the definition of local content varies in the literature. Generally, local content is a product of integrated fiscal and industrial policy instruments that ensure an adequate level of production inputs, like labor and assets, are sourced locally to promote and diversify the domestic economy. In this report, we explain how Saudi Arabia is implementing local content policy to serve the public and private sectors alike. The report highlights the main mechanisms through which local content policy is being phased in, identifies those impacted by it, and unpacks three scenarios of how entities in Saudi Arabia can proactively align with local content requirements. The report concludes with global case studies that synthesize best practices on the application of local content directions across different industries.