Saudi aviation authorities are planning to establish a series of logistics free zones next to the kingdom’s airports, according to reports.
Arabic publication Okaz said authorities recently approved the first zone at King Khalid Airport in Riyadh and several others are in the works.
The logistics zones are designed to attract investment and carry out functions ranging from maintenance, to distribution, development and assembly.
No value added tax will be charged as long as the goods are in customs pending status or are moved temporarily for maintenance or repair.
They will also offer financial incentives including no restrictions on foreign loans, retrieving capital, transferring or returning profit and paying commission and intellectual property rights, according to the publication.
However, firms operating within the zones will be subject to other conditions and Saudisation rules under development by the General Authority of Civil Aviation (GACA) and Ministry of Labour and Social Development.
The plans could place the kingdom in competition with neighbouring Dubai, which has its own airport logistics hubs.
Dubai Airport Free Zone recently cut business setup costs to attract more companies.