- Saudi Arabia’s ZATCA approved Economic Substance Requirements (ESR) Regulations for Special Economic Zones, effective 7 August 2026.
- The rules apply to licensed entities in King Abdullah Economic City, Ras Al-Khair, Jazan, and Cloud Computing SEZs.
- Affected entities must show substance from their first financial year through local premises, full-time staff, operating expenses, and local management.
- Tax and customs incentives/exemptions will not apply to income from IP activities used solely for marketing IP assets.
- Licensed entities must file an annual ESR return with ZATCA to keep tax benefits and avoid penalties.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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