Local Content Certificate
Issuing and verifying the Local Content percentage for Saudi entities competing for government tenders. We assess readiness, classify every spending item to its measurement axis, build the calculation work paper that ties each figure to its supporting document, and perform the verification procedures required before the certificate is filed through the Authority’s platform.
What the service covers
- Readiness assessment before we start: are the financial statements finalised, and is the supporting documentation available for each axis?
- Classifying spending items across the measurement axes: workforce, purchases, assets and depreciation, services and contracts.
- Building the calculation work paper — a detailed item schedule linking every amount to its supporting document.
- Identifying documentary gaps before they turn into qualifications in the report.
- Performing the verification procedures and issuing the report ahead of filing through the Authority’s platform.
- Reviewing a percentage already calculated elsewhere, to test the classification before you rely on it in a tender.
The two certificate types
A baseline certificate measures actual performance for a completed financial year, and evidences your current position at prequalification and when bidding.
A target certificate is a contractual undertaking to achieve a future percentage during the performance of a specific contract — a different instrument entirely, measured against you later.
Confusing the two is common and expensive.
Worth verifying before you engage any firm
The certificate is not self-issued by the entity, and it is not issued by an unaccredited party. It is issued through the platform of the Local Content and Government Procurement Authority after a licensed chartered accountant accredited by the Authority performs agreed-upon verification procedures on the declared figures.
The axes the percentage is built on
The percentage is not read off a single line in the financial statements. Every spending item is classified to its axis, and every classification has to be evidenced:
| Axis | What counts as local | Usual evidence |
|---|---|---|
| Workforce | Cost of Saudi employees: salary, allowances and social insurance contributions | Payroll registers and GOSI certificates |
| Purchases | Goods manufactured or produced inside the Kingdom | Purchase invoices and certificates of origin or equivalent proof of local manufacture |
| Assets and depreciation | Depreciation of assets physically located and operating inside the Kingdom | Fixed asset register and depreciation schedule |
| Services and contracts | Contracts with licensed Saudi service providers | Contracts and the supplier’s commercial registration |
An entity-data axis sits alongside these — commercial registration, activity, ownership percentages and headcount. It is required on the form but is identifying information and does not enter the numerical calculation.
How it is calculated
Axis percentage = items classified local within the axis ÷ total spending in that axis × 100
Overall percentage = local items across all axes ÷ total spending across all axes × 100
Because the denominator is total spending, a large item left unclassified for want of a document costs you twice: it leaves the numerator and stays in the denominator.
Where bidders get it wrong
There is no single statutory minimum local content percentage. The threshold that applies to you is read from the requirements of each individual tender, not from a general figure circulating in the market. Certificate validity is tied to the entity’s financial year end, and the period in force should be confirmed against the Authority’s guide current at the date of issue.
What raises your percentage — and what lowers it needlessly
The percentage is calculated from finalised statements for a year already closed, and cannot be improved retrospectively. But a large part of what depresses it in practice is not a genuine shortfall — it is missing documentation:
- Incomplete supplier files — a supplier whose commercial registration and activity cannot be established is classified conservatively. Completing supplier files alone raises the percentage in many cases without changing a single purchasing decision.
- Locally manufactured goods with no proof of origin — treated as imported.
- An asset register that does not show where the asset is — depreciation that should count as local cannot be evidenced as such.
- Pass-through re-invoicing handled as if it were your own spending, which inflates the figure artificially and is exactly what verification looks for.
- Related party transactions recorded without documentation, which require additional scrutiny rather than a default classification.
Where the financial statements are unaudited or records are unavailable, that is recorded as a limitation in the report rather than worked around.
When to start
Earlier than most entities do. The work is bounded by the quality of the records for a year that has already closed, so the practical window for improvement is before the year ends — not in the weeks before a bid.
If a tender deadline is already close, the sequence is: assess readiness, identify which items lack documentation, recover what can be recovered, and issue with the limitations stated plainly. A percentage supported by documents is worth more than a higher one that cannot be defended.
Related detailed guides
- The Local Content Certificate in Saudi Arabia: who issues it and how the percentage is measured
- Zakat and tax services
- External audit services
- Local content weighting in financial evaluation: the formula with a worked example
- After the award: progressive plan, reports and penalties
- The Mandatory List and the national product price preference in supply contracts