Local Content Certificate: What Saudi Factories Need to Know
Local Content Certificate: What Saudi Factories Need to Know
In February 2026, Saudi Arabia’s Local Content and Government Procurement Authority added a new condition to something most factory owners treat as paperwork: the local content certificate. Starting August 1, 2026, 233 products now need to meet a minimum local content percentage inside that certificate before they qualify for the Mandatory List of national products. Ceramic and porcelain tiles are among them. A second batch follows on August 1, 2027. It includes split air conditioners, water pumps, water valves, and copper wires. If any of that sounds like your bill of materials, the certificate just stopped being paperwork.
What the local content certificate actually does
LCGPA was established on December 27, 2018, organizationally linked to the chairman of the Council of Economic and Development Affairs. Its legal foundation runs through four instruments: the Public Procurement Law, LCGPA’s own regulatory arrangements, the Regulations on Preference for Local Content and Local SMEs and Companies Listed on the Capital Market, and the Implementing Regulations of the Public Procurement Law.
The certificate itself operates at the enterprise level. A company holds it, not a project. It’s the prerequisite for benefiting from the Mandatory List, the set of national products that get preference in government procurement. Without it, a supplier’s products don’t get that preference, regardless of how good the product is.
The new part: minimum percentages inside the certificate
Until this year, holding a local content certificate was largely a yes-or-no matter. LCGPA’s February 2026 announcement changed that for specific product categories. It’s no longer enough to hold the certificate. A company now needs to clear a minimum local content percentage for each covered product. Only then does it keep benefiting from that product’s place on the Mandatory List.
The rollout is staged. The first 233 products, including ceramic and porcelain tiles, became subject to the requirement on August 1, 2026. A second wave takes effect August 1, 2027. That wave covers split air conditioners, water pumps, water valves, copper wires, and a range of medical devices and supplies. LCGPA has said the targeted ratios get reviewed periodically as conditions change.
I could not independently retrieve the specific percentage figures for each product category. LCGPA’s own site is where that detail lives, and it didn’t return content I could verify directly. If a specific percentage matters to a sourcing decision, confirm it directly with LCGPA. Don’t rely on a secondhand figure.
Why a factory project should care
Look at what’s on both lists. Tiles are a finishing material on nearly every industrial build. Water pumps and valves sit inside process and utility systems. Copper wire runs through every electrical scope. Split air conditioners show up in HVAC packages more often than owners expect. None of this is a narrow procurement category that only applies to a handful of specialized contractors. It’s ordinary factory-project scope.
This sits apart from Aramco’s IKTVA program, which targets in-Kingdom spend specifically tied to Aramco’s own supply chain. LCGPA’s Mandatory List runs across government procurement generally. If your project touches Aramco work, you may be tracking both.
Suppose your project or your EPC contractor sources any of these categories from a supplier trading on Mandatory List preference. That supplier’s certification status now has a percentage attached to it, not just a checkbox. A supplier who qualified under the old system doesn’t automatically clear the new threshold.
What to check before you specify materials or equipment
Ask suppliers directly whether their local content certificate covers the specific percentage requirement for what you’re buying, not just whether they hold a certificate at all. For tiles, that requirement is already active. For split air conditioners, water pumps, water valves, and copper wire, you have until August 2027. That’s enough time to build the check into your procurement planning now, rather than scrambling later. LCGPA reviews these ratios periodically, so treat this as something to reconfirm at each major procurement milestone, not a fact you check once and file away.
How Temujin approaches this
We track LCGPA’s requirements the same way we track the rest of a factory project’s regulatory environment: by checking what’s actually published, not what a supplier claims in a sales conversation. When a product category on your scope shows up on LCGPA’s list, we flag it early. That keeps it a sourcing decision, not a compliance scramble.
Frequently asked questions about the local content certificate
What is a local content certificate in Saudi Arabia?
It’s an enterprise-level certificate issued under LCGPA’s framework. It’s the prerequisite for a company’s products to benefit from the Mandatory List, the set of national products that receive preference in government procurement.
What changed with the local content certificate in 2026?
LCGPA introduced a minimum local content percentage requirement inside the certificate itself. Holding the certificate is no longer enough on its own. Specific products now need to clear a minimum percentage to keep their Mandatory List benefit, starting with 233 products on August 1, 2026.
Which products are affected?
The first phase, effective August 1, 2026, covers 233 products including ceramic and porcelain tiles. A second phase takes effect August 1, 2027, covering split air conditioners, water pumps, water valves, copper wires, and various medical devices and supplies.
Where can I find the exact minimum percentages?
LCGPA publishes the applicable products and their respective minimum percentages on its official website. Check there directly, since the ratios are reviewed periodically and can change.
Does this apply to private factory projects, or only government contracts?
The Mandatory List mechanism is a government procurement preference. But suppliers serving government and private projects often overlap. A supplier’s certification status is worth confirming regardless of who’s issuing the purchase order, particularly for the product categories now covered.
Sourcing tiles, pumps, valves, or copper wire for a factory build?
The local content certificate rules just got more specific, and the timeline for some of your procurement categories is already active. Get in touch and we will help you confirm what your suppliers’ certification status actually means for your project.
