Local Content

Local Content

Local Content

AACPA Professional Services, we guide our clients through the process of obtaining a local content score certificate. Our approach offers a straightforward method for evaluating local content.

Get your local content score

Local content in Saudi Arabia represents the Kingdom's total expenditure through the inclusion of Saudi elements in the workforce, products, services, manufacturing, and technical resources. This initiative is central to the country's strategy for fostering economic growth and diversification.

Local Content Evaluation:

·         The Local Content Score is computed by taking the actual value added within Saudi Arabia and dividing it by the total expenditure.

·         Determining locally-sourced goods and services in contrast to imported ones necessitates a thorough examination of various documentation.

·         Assessing the total cost paid to both Saudi and non-Saudi employees

·         Capacity building in Saudi Arabia encompasses the training given to Saudi employees, the enhancement of local suppliers, and investments in research and development within the Kingdom.

In Saudi Arabia, the local content requirements are an essential part of economic policies and pivotal to the country’s economic growth and diversification strategy. Local content refers to the total expenditure through the participation of Saudi elements in labour, goods, services, and productive and technological assets

Local Content Requirements
Local content requirements are defined as a set of rules and regulations imposed by the Saudi government to ensure a certain percentage of local content in business activities and projects. This measure aims to support the local economy and encourage companies to invest in the Kingdom

Comply with Local Content Requirements
Companies must provide a certain percentage of local content in their activities and projects. This percentage is determined according to the rules and regulations set by relevant government authorities within Saudi Arabia. By complying with these requirements, companies can benefit from the support and facilities provided by the government to enhance their growth and expand their business scope.

Elements of Local Content Evaluation:

1.      Assets

Sources and components of goods for developing production chains

2.      Workforce

Local workforce involved in manufacturing products or providing services

3.      Goods and Services

Local components used in the production of goods and services

4.      Technology and Others

Research and development, and training of Saudi workforce

Mechanisms for Preferencing Local Content

Preference is given to national products, local content, small and medium-sized enterprises, and companies listed in tenders and government procurements as detailed below:

Mandatory List - A list of national products issued by the relevant authority and updated periodically

Minimum Local Content Requirement - It is the minimum requirement for local content that the contractor must achieve by the end of the contract

Price Preference - National products are given a price preference of 10%. This price preference is applied assuming that the foreign product exceeds its stated value in the bidding documents by 10%

Weight of Local Content in Financial Evaluation - A weight equivalent to 40% is allocated to local content and to companies listed in the financial market during the financial evaluation stage of tenders. This is in addition to a weight for price equivalent to 60%

AACPA offer specialized consulting services to companies wishing to comply with local content requirements in Saudi Arabia. we assist you in understanding the rules and regulations and provide support in their effective implementation to achieve full compliance and benefit from the support and facilities provided by the government.