For the purpose of this program, the following types of products will be considered as originating from Saudi Arabia:
1- Wholly obtained products
These types of products include the ones that are grown in Saudi Arabia, captured in Saudi Arabia (birds/wild animals), extracted from the land or sea in the Saudi Arabian territory or products manufactured in Saudi Arabia that do not include any non-originating material.
Example:
Fish obtained from the Saudi Arabian sea, fruits and vegetables grown on Saudi Arabian soil, minerals extracted within Saudi Arabia, livestock born and raised in Saudi Arabia, plants and flowers grown in Saudi Arabia shall be considered as wholly obtained products.
For such products there is no further value-added requirement for the program and such type of product is eligible to be branded as “Saudi Made” (trademark of this program).
Similarly, processed products or manufactured products where all the ingredients are originating from Saudi Arabia will also be considered as wholly obtained products.
If you are producing goods that do not include any imported material, it will be considered as wholly obtained product.
2- Products obtained through Substantial Transformation
Products obtained through Substantial Transformation include imported materials and have had a significant makeover in Saudi Arabia.
The final finishing of these goods provides a new character to the product/turns it into a different product, called the Value-Added.
The MiS program criteria is:
- 40% Value-Added in the Kingdom of Saudi Arabia, or
- the value of non-originating materials should not exceed 60% of the ex-factory price of the product (the price set by the manufacturer to charge distributors/buyers when they purchase products directly from the factory).
Example:
The raw materials for producing cheese in Saudi Arabia are imported from Country “B” and their cost is “X” SAR. These imported materials undergo a manufacturing process in the kingdom and their original cost (when imported) “X” presents only 60% of the cheese’s ex-factory price. In that case, the cheese meets the MiS program’s value-added requirements of 60% maximum value of non-originating materials, and a 40% value-added to local economy.
Please note that for some specific sectors, the program requires a higher value-added percentage.
The following table showcases the sectors where the 60% rule applies for non-originating materials, and the sectors where this rule does not apply:
Sector | Max | Sector | Max |
Chemicals & Polymers | 60% | Precious Metals and Jewellery | 60% |
Building Materials | Minerals & Glass | ||
Electronics, Electrical devices and Equipment | Non-food Consumer Goods | ||
Infrastructure & Heavy Equipment | Processed Food and Beverages | ||
Automobiles & Transport | Pharmaceuticals & Medical Supplies | ||
Textiles | Furniture | ||
Paper & Woods | Fresh Foods & Products | Wholly Obtained | |
Packaging | Handicrafts | Heritage Commission requirements |
How to Calculate Value-Added Percentages
The value of non-originated materials is subtracted from the product’s final price (ex-factory price) to calculate the value-added of the finished product.
The value of imported materials must not exceed 60% of the total value of the finished product to be qualified to as a “Saudi Made” product.
