Saudi Arabia's newly launched Ras al-Khair Special Economic Zone is looking to establish a major maritime hub that will include activities such as shipbuilding, offshore rig fabrication and related activities like maintenance, repair and operations (MRO).

The zone and others like it aim to contribute to Saudi Arabia's Vision 2030, which aims to grow and diversify the economy through import substitution, exports, and innovation.

"A key aspect is positioning Saudi Arabia as a global maritime hub, leveraging its strategic location between three continents and the fact that 6% of all global maritime trade passes Saudi ports," the announcement said.

It noted that these forays into new sectors have contributed to the robust growth and transformation that the Kingdom's economy has witnessed in recent years.

A network of infrastructure and new technologies supports the Special Economic Zone (SEZ) and adjacent areas. Industry 4.0 technologies like artificial intelligence (AI) and the Internet of Things (IoT) are integrated at multiple levels.

The infrastructure will be funded by investments from major players—Saudi Aramco, Bahri, Lamprell, Hyundai Heavy Industries (HHI), and Baosteel—and the Saudi government.

To further drive investment, the Saudi government has been offering several incentives, including a permanent 0% withholding tax for repatriation of profits from SEZ into foreign countries; flexible and supportive regulations around foreign talent during the first 5 years; 0% VAT for all intra-SEZ goods exchanged within the zone and between zones; and 5% corporate income tax for up to 20 years.

The incentives will also include 0% customs duties deferral for goods inside the SEZ and expat levy, ensuring fee exemption for employees and their families in the special economic zone.

The announcement noted that International Maritime Industries (IMI) already has signed offtake agreements totalling US$10 billion over 10 years with partners Aramco and Bahri for the delivery of 20 rigs and 52 vessels, acquiring at least 75% of Bahri's commercial vessel needs over the period from the shipyard.

"All these factors and the current economic climate generate significant growth potential, both within Ras Al-Khair and the Kingdom more broadly," it added.

The Saudi shipbuilding and MRO market is projected to grow by approximately 23% between 2021 and 2030, while the offshore rigs market is estimated to grow by 20% over the same period.

The statement said as demand for offshore platforms in the Arabian Gulf and broader Middle East is set to increase, Ras Al-Khair SEZ is positioned to become a major supplier through its shipbuilding, rig fabrication and MRO activities.