The Local Content Certificate has become mandatory for large enterprises, medium-sized companies, and factories benefiting from the mandatory list of government tenders.

In this context, many questions arise regarding what the certificate is, its benefits, and how to obtain it. These questions will be addressed in today’s article.

What is the Local Content Certificate?

Local content refers to the total percentage of spending within Saudi Arabia by determining the participation of local elements.

These local elements include products, technologies, services, and the workforce. The Local Content Certificate indicates a higher local content percentage when Saudi elements are predominantly used.

Conversely, organizations that heavily rely on foreign labor or imported products will have a lower local content ratio.

The Local Content Certificate is issued by the Local Content and Government Procurement Authority (LCGPA) after performing specific measurement procedures.

This certificate is valid for 17 months, after which the company must renew it to remain compliant.

Benefits of the Local Content Certificate

The benefits of the certificate are as follows:

• Assessing the local content percentage within the company’s financial year.

• Enabling companies to understand their current status and take action to increase local content, if necessary.

• Ensuring that industrial establishments meet the requirements imposed by the Authority by obtaining the Local Content Certificate.

How to Obtain the Local Content Certificate?

After the Authority mandated a number of enterprises across seven different sectors to issue the Local Content Certificate, many have questioned the process of obtaining it.

The Authority now offers an electronic platform for issuing the certificate. You can apply by following these steps:

1. Log in to the Local Content and Government Procurement Authority website.

2. Click on the “E-Services” section.

3. Choose the “Local Content Certificate Issuance” service.

4. Fill in the application form with the required data.

5. Upload the measurement form.

6. Choose a licensed auditing firm recognized by the Authority.

7. The selected firm will audit the data and prepare a report.

8. The report is submitted to the Authority for approval and certificate issuance.

The Role of the Certified Public Accountant

As part of its efforts to enforce the Local Content Certificate, the Authority collaborated with the Saudi Organization for Certified Public Accountants over a three-year initiative.

This collaboration aimed to train certified accountants on auditing procedures for companies to measure local content accurately.

The Authority also launched a training program to qualify accountants specifically for auditing tasks related to local content evaluation.

Program requirements include:

• Saudi nationality.

• Holding a bachelor’s degree in accounting.

• A minimum of two years’ experience in the field.

Participants must pass evaluation tests to receive program certification, enabling them to conduct audits and help issue the Local Content Certificate.

The role of the certified public accountant includes auditing the company, preparing a report, and submitting it to the Authority for review and certification approval.

Conclusion

To summarize, obtaining the Local Content Certificate involves submitting an online application, selecting an approved auditing firm, and undergoing the auditing process. The final report is then reviewed by the Authority to issue the certificate to the applicant organization.

Read also:

• Professional Accounting Certification in Saudi Arabia: Key Requirements and Their Costs