The Localization of
Industry and Knowledge Transfer (LIKT) is an innovative contracting method
aimed at attracting investors from leading global industries to localize high-impact
industries in the national economy and transfer knowledge to the Kingdom. In
return, investors receive several incentives, including long-term procurement
commitments and directing government purchasing power towards localized
products. These incentives are determined based on a feasibility study that
evaluates the return on investment for both the government and the investor.
Incentives of Localization of Industry and Knowledge Transfer (LIKT)
Offtake Agreement:
An incentive offered to investors willing to localize industries and transfer knowledge in specialized sectors, in exchange for a government procurement guarantee through LCGPA, whereby government entities commit to purchasing specific quantities over a defined number of years.
Inclusion in the Mandatory List:
LCGPA includes the localized product in the Mandatory List for national products upon completion of the localization process. This ensures that manufacturers benefit from guaranteed purchases through government tenders that fall under the Mandatory List regulations.
Stages of Implementing the Localization of Industry and Knowledge Transfer (LIKT) Method
Journey of LIKT Agreements:
- Identifying localization opportunities
- Conducting a feasibility study
- Announcing the opportunity and launching the tender
- Signing a Localization and Knowledge Transfer Agreement
- Monitoring project implementation
- Commencing supply after establishing the local factory
- Managing contracts
Objectives and Economic Impact of Localization of Industry and Knowledge Transfer (LIKT)
- Enhancing local content by establishing new industries through the setup of international factories within the Kingdom.
- Strengthening Saudi Arabia's strategic position as a hub for leading industries that can expand into regional markets.
- Meeting government demand more efficiently with faster supply, reduced costs, and improved product quality.
- Optimizing government spending by providing sustainable and high-efficiency national products.
- Enhancing self-sufficiency by developing promising industries and new sectors.
- Empowering Saudi talent and creating job opportunities.
Submit a Request
To apply for Localization of Industry and Knowledge Transfer, please click here.
For Inquiries, please contact us at: LIKT@LCGPA.gov.sa
