Although the certification process is relatively new, a growing number of organisations have already completed it. These early movers offer important lessons on how to navigate certification effectively, strategically, and with long-term value creation in mind. This article highlights the insights drawn from these companies and explores how others can follow their example with clarity and confidence.
Understanding Local Content Certification
Local Content Certification is a structured assessment and verification process managed under the oversight of the Local Content and Government Procurement Authority (LCGPA). The purpose of the certification is to measure a company’s contribution to the Saudi economy based on clear and standardised criteria. These include the percentage of locally sourced goods and services, employment of Saudi nationals, and investments made in local suppliers, infrastructure, and capabilities.
Certification is increasingly required or recommended in public sector procurement processes. It allows contracting entities to evaluate bids not only on cost and technical merit, but also on local economic impact. For companies, certification can unlock strategic benefits such as eligibility for specific tenders, improved scoring during evaluation, and enhanced positioning within the local market.
Lessons from Early Movers
Companies that have already completed the certification process provide a valuable knowledge base. Their experiences reveal four key areas that can influence the success of others seeking certification:
1. Begin with a Comprehensive Internal Audit
The most consistent recommendation from early adopters is to begin with a full internal baseline assessment. Organisations that mapped their local content activities across procurement, workforce, operations, and capital investments were significantly better prepared to meet certification requirements.
A robust internal audit should include:
- An inventory of local versus international procurement. The goal is to identify opportunities to shift spending from foreign to domestic suppliers.
- Current Saudi employment levels across business units as a percentage of Saudi employees are a significant factor in a company's overall local content score.
- Spend on local suppliers’ development and training initiatives.
- Investments in domestic facilities, logistics, or infrastructure.
This assessment helps clarify gaps, validate strengths, and streamline the data gathering process.
2. Strengthen Data Quality and Reporting Systems
Data quality was one of the main challenges faced by early movers, particularly for companies with complex supply chains. Certification requires precise, verifiable data, including suppliers cost breakdowns, invoices and copies of contracts, employee wise and nationality wise payroll cost breakdown for the employees registered under the GOSI of the company along with supporting documentation, cost breakdown for spending on training and development of Saudi national employees and development of suppliers, cost breakdown with appropriate supporting documents on research and development activities and investment logs.
To meet these requirements, successful organisations:
- Built integrated systems to consolidate local content data.
- Appointed dedicated local content leads to oversee reporting.
- Aligned internal documentation practices with LCGPA templates.
These steps not only facilitate the certification process but also enhanced visibility across performance indicators related to localisation.
3. Engage Cross-Functional Stakeholders Early
Certification is a company-wide effort that requires input from multiple departments. Early movers emphasised the importance of involving procurement, finance, operations, and HR teams from the outset to ensure consistency and avoid delays.
Equally important is proactive engagement with external stakeholders:
- Local suppliers and subcontractors, to collect supporting documentation e.g. LC certificates.
- Government bodies and regulators, to seek guidance and align expectations to avoid penalties.
- Industry associations, to share experiences and stay informed on local content updates.
This collaborative approach create internal alignment, reduce compliance risk, and foster a smoother certification journey.
4. View Certification as a Catalyst for Continuous Improvement
Rather than approaching certification as a single compliance milestone, early adopters treated it as a stepping stone toward ongoing performance enhancement. Certification reports often highlighted benchmarks and improvement areas, helping companies set future goals and investment priorities.
Several early movers created multi-year local content roadmaps, which included strategies for:
- Expanding local supplier networks.
- Increasing Saudi workforce participation.
- Enhancing knowledge transfer and technical training.
- Establishing partnerships with local institutions or innovation hubs.
This strategic perspective allows businesses to deliver greater value while reinforcing their role in national development efforts.
Unlocking Strategic Benefits Beyond Compliance
Local Content Certification offers a range of benefits that extend beyond regulatory fulfilment:
- Procurement Competitiveness: Certification provides a quantifiable edge in tenders by demonstrating alignment with local content priorities.
- Enhanced Internal Governance: The certification process improves transparency and strengthens operational discipline across departments.
- Reputation and Market Perception: Certified companies are seen as aligned with Vision 2030 and committed to national progress, building stronger relationships with regulators, partners, and the community.
- Business Development Opportunities: Certification positions companies as attractive partners for joint ventures and subcontracting, especially among multinationals seeking to meet localisation targets.
Turning Certification into a Strategic Asset
In the current Saudi business environment, Local Content Certification is becoming a strategic necessity. The experience of early movers demonstrates that success depends not only on meeting the technical criteria but also on taking a proactive, structured, and value-driven approach.
By investing in internal systems, fostering cross-functional collaboration, and embedding certification into broader localisation strategies, companies can convert a compliance requirement into a meaningful business advantage.
For organisations ready to lead, certification is more than a credential. It is a tool for growth, a driver of innovation, and a signal of alignment with Saudi Arabia’s national ambitions. With the right preparation and advisory support, businesses can use the certification process to strengthen their market position and contribute meaningfully to the Kingdom’s sustainable economic future.
