Saudi Arabia's Industrial Expansion: What the Latest Licensing Trends Reveal

Saudi Arabia’s industrial licensing trends reveal the scale of the Kingdom’s manufacturing expansion, highlighting rising investment, new production facilities, and opportunities for companies entering the market.

In 2025, the Ministry of Industry and Mineral Resources issued 1,660 new industrial licenses, up 23% from the previous year. The licenses represented more than SAR76 billion ($20.3 billion) in investments and were expected to create nearly 35,000 jobs. At the same time, 1,201 factories began operations, representing more than SAR31 billion in investment and creating over 45,000 jobs.

The momentum has continued into 2026. In June alone, Saudi issued 364 new industrial licenses, up 36% from May, with associated investments of around SAR4.46 billion.

Collectively, these trends point to sustained growth in the Kingdom’s industrial sector, driven by strategic initiatives like the Made in Saudi program, launched by the Local Content and Government Procurement Authority. The program encourages domestic production, attracts investment, creates jobs, and strengthens the Kingdom’s position in global supply chains.

Clear Government Strategy and Incentives Are Supporting Industrial Growth

The National Industrial Strategy aims to increase the number of factories in the Kingdom to approximately 36,000 by 2035, while focusing on industrial diversification, advanced manufacturing, local production, and export competitiveness.

It aims to support the country’s transition toward targeted, high-value industrial growth by creating incentives and investment opportunities in sectors aligned with the Kingdom’s broader industrial objectives. This underlying focus on expanding private sector participation in the industrial sector is strengthened by ongoing policy reforms and targeted incentives.

In 2025, the Kingdom introduced a standardized incentive program for manufacturing, initially identifying investment opportunities across automotive, machinery and equipment, and chemicals. The program provides sustainable financial and operational support for up to seven years, covering up to 35% of the initial investment, with a maximum of SAR50 million (approximately $13.5 million) per project.

The licensing process is part of this broader framework. While an industrial license supports investors through the establishment phase, separate requirements and permits apply before production can begin. The government’s industrial licensing service states that the license is valid for one year and does not authorize the holder to start production.

The result is continued growth in companies setting up in Saudi Arabia. In Q2 2026, the Ministry of Investment issued 9,018 investment licenses; industrial manufacturing accounted for 1,009 of those licenses, up 284% from 263 in the same period last year. Construction and wholesale and retail trade recorded larger absolute numbers, but manufacturing was among the fastest-growing major activities by volume.

Industrial Growth Is Extending Into Supply Chains

Saudi Arabia’s industrial strategy is increasingly connected to a broader effort to develop domestic supply chains.

The Kingdom is seeking to attract companies that can manufacture higher-value products locally, develop supporting industries, and integrate into regional and global supply chains. This is particularly relevant for sectors where localization can strengthen domestic production while creating opportunities for exports.

The expansion of industrial and logistics infrastructure is supporting this direction. JLL’s Q2 2026 research showed that robust demand and tight industrial supply were keeping occupancy rates above 90% across the Kingdom’s key industrial markets.

For companies entering Saudi Arabia, this means looking beyond incorporation alone.

The location of an operation, the relevant industrial activity, licensing requirements, supply-chain structure, access to infrastructure, and applicable local content obligations all need to be considered as part of the market-entry strategy.

As the Kingdom works toward its 2035 industrial targets, understanding licensing and regulatory requirements—and planning for local content obligations early—will be critical for companies looking to turn the opportunity into an operational presence.