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Home/Strategy Hub/Saudi Local Content and the LCGPA
Guide

Saudi Local Content and the LCGPA

What the Local Content and Government Procurement Authority does, how the rules hit a foreign manufacturer, and what changed in 2026. Checked against Saudi government sources and law firm briefings.

The short answer

In Saudi government procurement, local content decides more than most foreign manufacturers expect. Some products must be bought locally. Others carry a price advantage for local supply. Some tenders make you commit to a local content target and report against it. From August 2026 a minimum local content score is a condition on a first set of 233 products, with water pumps and valves joining in 2027. Aramco now measures your local content on the same certificate. The rules change often, so plan your local presence before a tender asks for it.

I have closed Saudi work including the £1.9M Marjan package for Aramco through Técnicas Reunidas and the £500K SABIC Sharq award. Here is how the local content rules work, and what they mean for a manufacturer without a Saudi factory.

What the LCGPA is

The Local Content and Government Procurement Authority was set up by royal decree in December 2018. It writes and monitors local content policy across the economy and oversees government procurement. It maintains the Mandatory List of national products and runs the local content certificate system. Local content here is broader than hiring Saudis. Clyde & Co points out that the Regulations define it as spending inside the Kingdom on national goods, services, assets, technology and workforce.

How local content works in government tenders

The rules sit in the 2019 Government Tenders and Procurement Law and the Local Content Regulations issued the same year. Clyde & Co sets out four mechanisms:

  • The Mandatory List. National products that government entities are generally required to buy locally. Bids that fail to comply may be excluded.
  • The price preference. For national products not on the Mandatory List, a competing foreign product is treated in evaluation as if it were priced 10% higher than its bid.
  • Local content in evaluation. In designated procurements, your local content baseline and target can count towards how your bid is scored.
  • Commitments you have to keep. Some tenders require you to disclose your baseline, commit to a target percentage and report against it through the contract. Breaches can bring fines and, for serious or repeated cases, a ban from government contracting.

How much local content weighs in a given tender is set by the tender and the regulations, not by a single published figure, so read each tender's evaluation criteria rather than relying on a number from a blog.

What changed in 2026

On 17 February 2026 the LCGPA made a minimum local content percentage, measured at company level and shown on your Local Content Certificate, a condition of benefiting from the Mandatory List. It applies to 233 products from 1 August 2026, including ceramic and porcelain tiles. Split air conditioners, water pumps, water valves, copper wire and a range of medical devices follow from 1 August 2027. The percentages for each product are published on the LCGPA website and reviewed periodically.

A new Government Tenders and Procurement Law was published on 4 September 2026 and takes effect on 2 January 2027, replacing the 2019 law. Bird & Bird notes it keeps the rule that before a government entity contracts with a supplier licensed outside Saudi Arabia, it must check that no more than one qualified Saudi licensed supplier is available. Its implementing regulations were still to come at the time of writing.

On large contracts, the Economic Participation Policy introduced in 2024 adds an obligation where the imported part of a government procurement reaches SAR 100 million. It is usually 35% of that imported value, met through approved activity such as investment, local sourcing and manufacturing, training or technology transfer.

How it reaches Aramco

Aramco runs its own local content programme, IKTVA, and taking part is required to do business with it. The two now share one measurement. Aramco's 2025 IKTVA guidelines say Aramco and the LCGPA unified local content measurement and the certificate, so the certificate the LCGPA approves is the one you upload to the IKTVA portal. One certificate, two buyers watching it.

Your options without a Saudi factory

A factory is not the only way in. Bird & Bird lists offshore contracting, a Saudi branch or subsidiary, a distributor, a consortium or a joint venture as possible structures (the MISA registration guide covers how a foreign company registers), and some groups need both a regional headquarters in Saudi Arabia and a separately licensed operating entity. Local content can also come from Saudi staffing, local sourcing, subcontracting, assembly, maintenance and training.

The commercial point is simple. A product that arrives with no local content plan is competing with one hand tied. Work out which of your products touch the Mandatory List, what a local partner or assembly step would add to your score, and what it costs against what it opens. Then decide. That is a capacity question, not a reason to stay out.

Local content will not win the tender for you. Ignoring it can lose you the shortlist.

Where I help, and where I do not

I am not a lawyer and I do not certify local content. For the legal structure and the certificate you need Saudi counsel and an approved auditor. What I do is the commercial side: which buyers and tenders matter for your product, what a local partner should actually do, and how to get your product specified before the tender, through the engineering teams and the EPC contractors. Read Saudi Arabia and Aramco for the market itself and Aramco vendor registration and IKTVA for the Aramco route.

FAQ

Common questions

What is the LCGPA?

The Local Content and Government Procurement Authority is the Saudi body that sets and monitors local content policy and oversees government procurement. It maintains the Mandatory List of national products and issues local content certificates.

What is the Mandatory List?

A list of national products, maintained by the LCGPA, that government entities are generally required to buy locally. Clyde & Co notes that bids which fail to comply with it may be excluded from the relevant tenders.

How does the Saudi price preference for local products work?

For national products not on the Mandatory List, competing foreign products are treated for evaluation purposes as if they were priced 10% higher than their bid price, according to Clyde & Co's reading of the 2019 Local Content Regulations.

What changed in 2026?

In February 2026 the LCGPA made a minimum enterprise level local content percentage, shown on the Local Content Certificate, a condition of benefiting from the Mandatory List. It applies to 233 products from 1 August 2026, and to products including water pumps, water valves, copper wire and split air conditioners from 1 August 2027. A new Government Tenders and Procurement Law was also published on 4 September 2026 and takes effect on 2 January 2027.

Do I need a Saudi factory to sell into Saudi government projects?

Not always. Bird & Bird lists offshore contracting, a Saudi branch or subsidiary, a distributor, a consortium or a joint venture as possible structures. But before contracting with a supplier licensed outside the Kingdom, a government entity must check that no more than one qualified Saudi licensed supplier is available, so local presence counts.

How does the LCGPA relate to Aramco's IKTVA?

They are separate programmes that now share one measurement. Aramco's 2025 IKTVA guidelines say Aramco and the LCGPA unified local content measurement and the certificate, so suppliers upload their LCGPA approved local content certificate to the IKTVA portal.

Sources: Saudi Press Agency, LCGPA minimum local content, 17 February 2026 · Clyde & Co, local content in Saudi public procurement, September 2026 · Bird & Bird, Saudi Arabia's new procurement law, September 2026 · iktva 2025 certification guidelines · LCGPA. Checked 12 November 2026. This is a commercial guide, not legal advice. Rules change often, so confirm with the LCGPA and Saudi counsel before you rely on them.

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Saudi, ADNOC and EPC guides

SABIC and Maaden Vendor Registration The SAP Ariba routes, NUSANED and Tharwah. Aramco Vendor Registration and IKTVA How manufacturers get approved, item by item. MISA Licence, Now Investment Registration How a foreign company registers in Saudi Arabia today. Saudi Arabia and Aramco The market, the operator and the EPC route. Getting Specified on ADNOC and Aramco Projects Why being listed is not the same as being specified. GCC Market Entry Guide The practical guide for manufacturers entering the GCC. The UAE ICV Certificate How the score works and how ADNOC uses it. ADNOC Supplier Registration The UAE route, step by step. EPC Contractor Strategy The route through the contractors who build the projects.