The licensing sequence
A new factory in Saudi Arabia goes through several hands before it produces anything. The national investor guidance for manufacturing sets out the main steps:
- For a foreign investor, a foreign investment licence from the Ministry of Investment
- Commercial registration
- An industrial licence for establishment status from the Ministry of Industry and Mineral Resources (MIM)
- Registration of the establishment
- Secured industrial land, typically in one of MODON's industrial cities
Activity has been heavy. The Kingdom issued 954 new industrial licences in the second quarter of 2026, up from 570 in the first, and 501 factories started production in the quarter.
Where the feasibility study fits
The same guidance places a feasibility study alongside these steps, and suggests it is the moment to apply for the support packages and incentives that the national industrial programmes offer. It also says what the study should contain: an environmental impact assessment, together with financial analysis of expected revenues, operating cost, capital cost, EBITDA margin, cost of capital and expected returns.
In practice the study is read three times, by three institutions, for three purposes.
What each reader takes from it
The Ministry of Industry and Mineral Resources
MIM issues the industrial licence and records the factory in the national industrial register. It is interested in what you will make and how: products and capacity, the production technology, raw materials and local content, the number of jobs and the Saudi share of them.
MODON
MODON allocates and leases land in industrial cities. It needs to know how much land and building space the project needs, its power, water and gas demand, the size of the investment and the construction timeline.
SIDF or the bank
If the project borrows, the lender reads the study for market evidence, project cost and the ability to repay. SIDF's registration criteria for a new project include a valid lease from the industrial city, or a building permit and permission to operate on private land. Land comes before the loan, which means the study you give MODON is likely to be the one you later give SIDF.
Writing one file for all three
Because each reader needs a different slice, it is tempting to write three thin documents. It is usually better to write one complete study to the standard of the most demanding reader, which is normally SIDF, and draw shorter submissions from it. SIDF's feasibility study preparation guideline is the most detailed published standard and makes a sensible template.
A complete industrial feasibility study covers:
- Products, specifications and installed capacity, with the basis for each figure
- Manufacturing process, machinery list and supplier quotations
- Raw material sourcing, local versus imported
- Land, building and utility requirements
- Manpower and Saudisation plan by role and year
- Environmental considerations, feeding the environmental impact assessment
- Market study for each target market, with five years of sourced demand history
- Capital and operating cost, an Excel model, returns, sensitivity and financing plan
Notes for foreign manufacturers
Most manufacturing activities are open to full foreign ownership, and SIDF lends to foreign investors that hold a Ministry of Investment licence. The study has to be Saudi-specific. Wage levels, Saudisation, utility tariffs, land costs and local demand should all be Saudi figures. A study adapted from a plant in another country, with the currency changed, will not survive review.
Common gaps
- Capacity stated without a basis in shifts, line speeds or equipment ratings
- Utility demand missing, which MODON needs to allocate a plot
- No environmental section, leaving the impact assessment to start from nothing
- A thin market study that has to be rewritten for SIDF later
- Different capital cost figures in the licence file and the loan application