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🇸đŸ‡Ļ LCGPA Local Content Score Calculator

Local Content and Government Procurement Authority - Kingdom of Saudi Arabia

Version: 2025-01 | Effective: Fiscal Years ending December 31, 2024 and after

Local Content Score Calculator

Enter your company's financial data to calculate the Local Content Score. All amounts in SAR.

đŸ‘Ĩ Section 3: Labor Compensation

ℹī¸ Included: Basic salary, allowances, bonuses, GOSI, end-of-service benefits

🛒 Section 4: Goods & Services

⚠ī¸ Note: Foreign suppliers receive 0% LC score. Use supplier's LC certificate if available.

🏭 Section 6: Depreciation & Amortization

ℹī¸ Coefficients: KSA assets = 100% | Foreign assets = 30%

📚 Section 5: Capacity Building

✅ R&D Incentive: Up to 10% bonus if R&D/Revenue â‰Ĩ 2%

📑 Table of Contents - Calculation IDs

LC-MAIN Main Local Content Score Formula

// Main LC Score Calculation LC_Score = (LC_Labor + LC_Goods_Services + LC_Depreciation + LC_Capacity_Building) ───────────────────────────────────────────────────────────────────────── Total_Relevant_Costs × 100 // Final Score with R&D Incentive Final_LC_Score = Base_LC_Score + R&D_Incentive
Component Formula Description
Numerator LC_Labor + LC_G&S + LC_Depreciation + LC_Capacity_Building Sum of all local content contributions
Denominator Total_Labor + Total_G&S + Total_Depreciation + Total_CB Sum of all relevant costs
R&D Incentive MIN(10%, 10% × (R&D/Revenue) / 2%) Bonus up to 10% for R&D investment

LC-001 to LC-002 Labor Component Calculations

LC-001 Saudi Employee Compensation

LC_from_Saudi = Saudi_Compensation × 1.0 // 100% coefficient

LC-002 Expatriate Employee Compensation

LC_from_Expatriate = Expatriate_Compensation × 0.534 // 53.4% coefficient (updated 2024)

LC-012 Total Labor Cost

Total_Labor = Saudi_Compensation + Expatriate_Compensation

LC-013 Total LC from Labor

LC_Labor = LC_from_Saudi + LC_from_Expatriate LC_Labor = (Saudi_Compensation × 1.0) + (Expatriate_Compensation × 0.534)
ℹī¸ Example Calculation:
Saudi Compensation = SAR 10,000,000
Expatriate Compensation = SAR 15,000,000

LC_from_Saudi = 10,000,000 × 1.0 = 10,000,000
LC_from_Expat = 15,000,000 × 0.534 = 8,010,000
Total_Labor = 10,000,000 + 15,000,000 = 25,000,000
LC_Labor = 10,000,000 + 8,010,000 = 18,010,000

LC-003 to LC-005 Goods & Services Component

LC-003 Local Supplier Spend

// For each local supplier: LC_from_Supplier = Supplier_Spend × Supplier_LC_Score // Where Supplier_LC_Score is either: // 1. Supplier's LCGPA-approved certificate score (priority) // 2. Sector score from Appendix B (fallback)

LC-004 Sector Score Lookup

// Use ISIC code or activity description to find sector Sector_Score = lookup(ISIC_Code) OR lookup(Activity_Description) // See Sector Scores tab for complete list

LC-005 Foreign Supplier Spend

LC_from_Foreign = Foreign_Spend × 0.00 // 0% for foreign suppliers

LC-014 Total Goods & Services

Total_GS = Local_Supplier_Spend + Foreign_Supplier_Spend

LC-015 Total LC from Goods & Services

LC_GS = ÎŖ(Local_Supplier_Spend_i × Sector_Score_i) + (Foreign_Spend × 0) // Simplified (single sector): LC_GS = (Local_Spend × Sector_Score) + 0

LC-006 to LC-007 Depreciation & Amortization Component

LC-006 KSA Manufactured Assets

LC_from_KSA_Assets = KSA_Depreciation × 1.0 // 100% coefficient

LC-007 Foreign Manufactured Assets

LC_from_Foreign_Assets = Foreign_Depreciation × 0.30 // 30% coefficient (updated 2024 from 20%)

LC-016 Total Depreciation

Total_Depreciation = KSA_Depreciation + Foreign_Depreciation

LC-017 Total LC from Depreciation

LC_Depreciation = (KSA_Depreciation × 1.0) + (Foreign_Depreciation × 0.30)

LC-008 to LC-011 Capacity Building Component

LC-008 Saudi Training Expenses

LC_from_Training = Saudi_Training_Expense × 1.0 // 100% coefficient

LC-009 Supplier Development Expenses

LC_from_Supplier_Dev = Supplier_Development_Expense × 1.0 // 100% coefficient

LC-010 R&D Expenses

LC_from_RD = RD_Expense × 1.0 // 100% coefficient

LC-018 Total Capacity Building

Total_CB = Saudi_Training + Supplier_Development + RD_Expense

LC-019 Total LC from Capacity Building

LC_Capacity_Building = Total_CB × 1.0 // All at 100%

LC-011 R&D Incentive Calculation

// R&D Incentive is a BONUS added to the base score RD_Ratio = RD_Expense / Total_Revenue IF RD_Ratio >= 0.02 (2%) THEN RD_Incentive = 0.10 (10% maximum) ELSE RD_Incentive = 0.10 × (RD_Ratio / 0.02) // Simplified formula: RD_Incentive = MIN(0.10, 0.10 × (RD_Expense / Total_Revenue) / 0.02)
✅ R&D Incentive Example:
R&D Expense = SAR 2,000,000 | Revenue = SAR 100,000,000
R&D Ratio = 2,000,000 / 100,000,000 = 2%
Since 2% â‰Ĩ 2%, R&D Incentive = 10% (maximum)

LC-020 to LC-024 Final Score Calculations

LC-020 Total Relevant Costs

Total_Relevant_Costs = Total_Labor + Total_GS + Total_Depreciation + Total_CB

LC-021 Total LC Contribution

Total_LC_Contribution = LC_Labor + LC_GS + LC_Depreciation + LC_Capacity_Building

LC-022 Base LC Score

Base_LC_Score = Total_LC_Contribution / Total_Relevant_Costs × 100%

LC-023 R&D Incentive (Bonus)

RD_Incentive = MIN(10%, 10% × (RD_Expense / Revenue) / 2%)

LC-024 Final LC Score

Final_LC_Score = Base_LC_Score + RD_Incentive // Maximum possible: 100% + 10% = 110% (theoretically) // Practical maximum: ~100% (with 10% R&D bonus)

COEF-001 Labor Coefficients

ID Category Coefficient Percentage Notes
COEF-001a Saudi National Employees 1.0 100% Full local content credit
COEF-001b Expatriate Employees 0.534 53.4% Updated 2024 (was 37%)

COEF-002 Depreciation & Amortization Coefficients

ID Asset Origin Coefficient Percentage Notes
COEF-002a KSA Manufactured Assets 1.0 100% Manufactured/produced in Saudi Arabia
COEF-002b Foreign Manufactured Assets 0.30 30% Updated 2024 (was 20%)

COEF-003 Capacity Building Coefficients

ID Category Coefficient Percentage Notes
COEF-003a Saudi Training Expenses 1.0 100% Training for Saudi nationals only
COEF-003b Supplier Development 1.0 100% Programs to develop local suppliers
COEF-003c R&D Expenses in KSA 1.0 100% Must be conducted in Saudi Arabia

COEF-004 R&D Incentive

ID Parameter Value Notes
COEF-004a Maximum Incentive 10% Added as bonus to base LC score
COEF-004b Threshold for Maximum 2% R&D as percentage of revenue
// R&D Incentive Formula IF (RD_Expense / Revenue) >= 2% THEN Incentive = 10% ELSE Incentive = 10% × (RD_Expense / Revenue) / 2%

COEF-005 Goods & Services - Default Scores

ID Supplier Type Default Score Notes
COEF-005a Foreign Supplier (direct) 0% No local presence
COEF-005b Agent/Distributor 5% Local entity distributing foreign goods
COEF-005c Foreign Service Representative 5% Saudi entity representing foreign provider

SECTOR-SVC Services Sector Scores (Appendix B)

ID Sector Code Sector Name (EN) Score ISIC Codes
SECTOR-SVC-01SERVICES_SECURITYSecurity Services82%80, 811001
SECTOR-SVC-02SERVICES_UTILITIESUtilities61%351, 36, 37
SECTOR-SVC-03SERVICES_ACCOMMODATIONAccommodation & Facility Rental60%55, 68102
SECTOR-SVC-04SERVICES_MANPOWERManpower Supply59%78
SECTOR-SVC-05SERVICES_PROFESSIONAL_LOCALLocal Professional Services50%69, 70, 71, 72, 73, 74
SECTOR-SVC-06SERVICES_REAL_ESTATEReal Estate Services48%68
SECTOR-SVC-07SERVICES_TRANSPORT_LOGISTICSTransport and Logistics45%49, 50, 51, 52, 53, 79
SECTOR-SVC-08SERVICES_IT_TELECOMIT & Telecom Services41%582, 61, 62, 63
SECTOR-SVC-09SERVICES_CONSTRUCTIONConstruction Services40%41, 42, 43
SECTOR-SVC-10SERVICES_FOOD_BEVERAGESFood & Beverages Services40%56
SECTOR-SVC-11SERVICES_HEALTHCAREHealthcare Services38%86, 87, 88
SECTOR-SVC-12SERVICES_INDUSTRIALIndustrial Services36%25921, 33, 35, 38, 712
SECTOR-SVC-13SERVICES_EQUIPMENT_RENTALCars, Trucks & Equipment Rental35%49225, 773, 771
SECTOR-SVC-14SERVICES_OTHEROther Services35%39, 58-60, 772, 81, 90-99
SECTOR-SVC-15SERVICES_DRILLING_ONSHOREOnshore Drilling30%06, 091
SECTOR-SVC-16SERVICES_MININGMining Services30%09
SECTOR-SVC-17SERVICES_DRILLING_OFFSHOREOffshore Drilling20%06, 091
SECTOR-SVC-18SERVICES_PROFESSIONAL_FOREIGN_REPForeign Professional Service Rep5%69-74
SECTOR-SVC-19SERVICES_FOREIGN_AGENTForeign Service Agent5%-
SECTOR-SVC-20SERVICES_FOREIGNForeign Services0%-

SECTOR-GDS Goods Sector Scores (Appendix B)

ID Sector Code Sector Name (EN) Score ISIC Codes
SECTOR-GDS-01GOODS_RECYCLERSRecyclers70%381103, 383
SECTOR-GDS-02GOODS_CHEMICALS_OIL_GASChemicals & Oil and Gas61%19, 20, 22, 352
SECTOR-GDS-03GOODS_STEEL_REBARSteel Rebar Manufacturing60%25114
SECTOR-GDS-04GOODS_AGRICULTUREAgriculture, Forestry & Fishing57%01, 02, 03
SECTOR-GDS-05GOODS_CEMENT_GYPSUMCement and Gypsum50%2394, 2395
SECTOR-GDS-06GOODS_MININGMining Products45%05, 07, 08
SECTOR-GDS-07GOODS_ELECTRICALElectrical Materials40%27, 2814
SECTOR-GDS-08GOODS_FOOD_BEVERAGEFood & Beverage Manufacturing35%10, 11, 12
SECTOR-GDS-09GOODS_STATIC_EQUIPMENTStatic Equipment30%24, 25, 2813
SECTOR-GDS-10GOODS_OTHER_MANUFACTURINGOther Manufacturing30%13-18, 21, 23, 31, 32
SECTOR-GDS-11GOODS_CHEMICAL_BLENDINGChemical Blending29%20
SECTOR-GDS-12GOODS_MACHINERY_EQUIPMENTMachinery and Equipment25%265-268, 28-30
SECTOR-GDS-13GOODS_IT_TELECOMIT & Telecom Manufacturing15%261-264
SECTOR-GDS-14GOODS_AGENT_DISTRIBUTORAgent or Distributor5%45, 46, 47
SECTOR-GDS-15GOODS_FOREIGNForeign Goods0%-

RULE-001 Included in Labor Compensation

  • Basic salary
  • Housing allowance
  • Transportation allowance
  • Other allowances (phone, education, etc.)
  • Bonuses and commissions
  • Overtime payments
  • End-of-service benefits
  • GOSI contributions (employer portion)
  • Medical insurance premiums
  • Other employee benefits

RULE-002 Excluded from Labor

  • Contractors and outsourced labor (→ goes to Goods & Services)
  • Board member compensation
  • Employees working outside KSA

RULE-003 Goods & Services Disclosure Requirements

Requirement Details
Minimum Coverage 70% of total G&S expenses OR top 40 suppliers (whichever is greater)
If Remaining > SAR 500M Must list top 80 suppliers OR until remaining < SAR 500 million
Score Priority 1. Supplier's LCGPA certificate → 2. Sector score → 3. Foreign default (0%)

RULE-004 Excluded from Total Relevant Costs

⚠ī¸ These items are NOT included in the LC calculation:
  • Taxes (VAT, income tax, zakat)
  • Customs duties
  • Government fees (Iqama, licenses, visas, work permits)
  • Provisions and write-offs
  • Penalties and fines
  • Foreign exchange losses
  • Interest expenses
  • Donations and charitable contributions
  • Capital expenditures (CAPEX) - for disclosure only

RULE-005 Depreciation - Eligible Assets

  • Property, Plant and Equipment (PPE)
  • Buildings and structures
  • Machinery and equipment
  • Vehicles and transportation
  • Furniture and fixtures
  • Intangible assets (software, licenses)
  • Right-of-use assets (IFRS 16 leases)

RULE-006 Depreciation - Excluded Assets

  • Goodwill amortization
  • Investment properties
  • Personal use assets
  • Assets not yet placed in service
  • Assets not used in KSA operations

RULE-007 Capacity Building - Eligible Expenses

Saudi Training (RULE-007a)

  • External training programs (courses, workshops, seminars)
  • Professional certifications (CPA, PMP, engineering licenses)
  • Educational tuition support (MBA, degrees)
  • Internal training programs (external costs only)
  • Scholarship programs
  • Internship programs (stipends, materials)

Supplier Development (RULE-007b)

  • Technology transfer programs
  • Quality improvement initiatives
  • Capability assessment programs
  • Equipment provided to suppliers

R&D Expenses (RULE-007c)

  • Personnel costs for R&D staff in KSA
  • Materials and supplies for R&D
  • Equipment depreciation for R&D
  • Contracted R&D services (in KSA)
  • Patent filing costs

RULE-008 R&D - Ineligible Expenses

  • Routine product testing
  • Quality control
  • Market research
  • Training (→ goes to Saudi Training)
  • R&D conducted outside Saudi Arabia

RULE-009 Document Retention

📁 Retention Period: 10 Years

Required documents:
  • Payroll records and GOSI statements
  • Supplier invoices and contracts
  • Fixed asset register and depreciation schedules
  • Training records and certificates
  • R&D project documentation
  • Audited financial statements
  • LC certificate or reports issued

RULE-010 2024 Updates Summary

Item Before Update After Update Change
Expatriate Labor Coefficient 37% 53.4% +16.4%
Foreign Assets Depreciation 20% 30% +10%
Security Services 70% 82% +12%
Utilities Services New 61% New sector
Chemicals & Oil and Gas 50% 61% +11%
Manpower Supply 45% 59% +14%