IKTVA — Aramco's In-Kingdom Total Value Add scoring program — rewards suppliers who grow the share of their activity performed inside Saudi Arabia. Offshore software development does not score directly on IKTVA, and vendors who imply otherwise during procurement conversations are not being straight with you. Offshore and IKTVA are not incompatible, but the engagement structure has to be decided at scoping — not retrofitted at project close.
How the IKTVA formula works
The IKTVA formula
IKTVA score = (Local Value Added ÷ Total Value Added) × 100. A supplier that spends SAR 1,000,000 in total with SAR 400,000 inside the Kingdom scores 40. Local Value Added covers Saudi national payroll, procurement from Saudi-registered suppliers, in-Kingdom training expenditure, and Saudi-based R&D activity.
Local Value Added / Total Value Added × 100
The IKTVA score is Local Value Added divided by Total Value Added, multiplied by 100. Total Value Added is your full cost base for the engagement. Aramco target scores vary by supplier category, but the direction is consistently toward higher year-on-year performance — the program rewards improvement over time, not just reaching a static threshold.
New Aramco suppliers: the five-year localization action plan
New Aramco suppliers do not need a historic score immediately. They submit a five-year localization action plan with specific commitments covering staffing targets, procurement targets, training volumes, and technology transfer plans. Formal scoring begins after the first year of operation or once annual Aramco billings exceed SAR 375,000, per Aramco's IKTVA supplier portal guidelines.
What offshore development scores and what it can contribute
Development work performed outside Saudi Arabia does not add to Local Value Added. A developer in Tunis writing code for an Aramco supply chain vendor generates zero IKTVA points for that vendor's score.
What an offshore partner can contribute to a client's IKTVA score, when the engagement is structured for it:
- Saudi national training. Formal, documented training sessions for Saudi engineers — structured knowledge transfer with attendance records, learning objectives, and signed completion records — count toward Local Value Added. A token Q&A session at project close does not qualify. A documented training schedule running from sprint one, with named Saudi national participants and signed certificates, does.
- Technology transfer documentation. Structured handover of architecture documentation, methodology guides, and process frameworks can qualify as technology transfer. The documentation must be produced deliberately, in the format Aramco expects for IKTVA submission, not as a standard project closeout package.
- Local subcontractor spend. Routing part of the project budget through a Saudi-registered entity — a local QA firm, a Saudi UX studio, a domestic hosting provider — generates in-Kingdom spend that scores directly. Even ten to fifteen percent of project budget allocated this way moves the IKTVA needle meaningfully.
- In-Kingdom infrastructure. Deploying to a Saudi-licensed data center or an in-Kingdom cloud region rather than an international one counts as in-Kingdom expenditure. Infrastructure regularly represents fifteen to twenty-five percent of a software project's total cost, making the deployment region a material IKTVA decision.
Structuring an engagement for IKTVA compliance
Why pure offshore engagements score poorly
A pure offshore engagement — offshore team builds everything, no local component, no Saudi national involvement — will produce a low IKTVA score. For Aramco supply chain vendors where IKTVA scoring affects contract eligibility and tier placement, that is a problem at renewal that compounds year on year.
The structured engagement: training, subcontractors, in-Kingdom infrastructure
A structured engagement looks different from the start. The offshore team handles development, but a formal training track runs from sprint one: two to four documented knowledge transfer sessions per cycle, with named Saudi national participants and signed completion records. QA goes to a Saudi-registered subcontractor. Deployment is inside the Kingdom. Project closeout produces an architecture handover document in the format Aramco's IKTVA program expects at submission.
This structure costs more than a pure offshore engagement. It also produces a defensible IKTVA action plan with specific numbered commitments that Aramco procurement can evaluate when reviewing supplier tier eligibility. The cost delta is typically far smaller than the contract risk of scoring below threshold at renewal.
Nitaqat and the offshore cost equation
Nitaqat scope: what it covers and what it does not
Nitaqat applies to companies registered and operating in Saudi Arabia, not to their foreign suppliers. Your Nitaqat quota governs your own Saudi national headcount ratios — it does not extend to the nationality of your vendors' engineers.
The offshore + Saudi-national hybrid model
What offshore development does affect is the cost of meeting your Nitaqat requirements. Saudi national engineers command significant salaries in the current market. Vision 2030 demand pressure has pushed KSA tech compensation substantially — Hays Saudi Arabia Salary Guide 2024 puts senior developer total compensation at USD 70,000–112,000/year, including the housing, health, and transport allowances that form a standard part of KSA employment packages. If your Nitaqat quota requires carrying Saudi engineers on payroll, keeping the rest of your development offshore takes real pressure off total development costs.
The model that tends to work well: offshore handles volume development at forty to sixty percent below in-Kingdom rates. Saudi national engineers go into seats where their actual advantages matter — product ownership, client-facing technical roles, architecture review, and the local market knowledge and Arabic fluency those roles benefit from. Nitaqat quotas stay met, and total development costs remain manageable.
What to ask an offshore partner before IKTVA conversations start
If IKTVA compliance affects your Aramco contract eligibility, get answers to these questions before any engagement is signed:
- Can you build a formal Saudi national training component into the engagement from sprint one, with documented deliverables formatted for Aramco procurement submission?
- Do you have established relationships with Saudi-registered subcontractors — QA, testing, hosting — who can absorb a portion of project spend?
- Can you produce a technology transfer document in the format Aramco's IKTVA program expects, not just a standard project closeout package?
- Are you willing to deploy to an in-Kingdom cloud region if your security policy or SDAIA data residency requirements demand in-Kingdom data storage?
A partner who can answer yes to all four questions, and can show you how they have structured these components on previous engagements, is a different proposition from one who says offshore development does not affect your IKTVA score and moves on.
Why IKTVA structure has to be designed in from sprint one
IKTVA-compatible offshore engagements are not difficult to structure. They are difficult to retrofit. A training schedule added in week ten of a twelve-week project is a document, not a training program — it has no measurable impact on Saudi national capability development that Aramco procurement can assess. A technology transfer document written the day before handover is not transferring anything.
The offshore partner needs to understand IKTVA requirements well enough to embed the scoreable components into sprint planning, documentation standards, subcontractor selection, and infrastructure decisions from the day scoping begins. That level of engagement requires a partner who has done this before, not one learning the Aramco procurement framework on your engagement.
How Massar Digital structures IKTVA-compatible engagements
Massar Digital builds the IKTVA-scoreable components into engagement structure from sprint one. Training tracks for Saudi national engineers start with the first sprint cycle — documented sessions, learning objectives, attendance records, and signed completion certificates in the format Aramco procurement expects. We have established relationships with Saudi-registered QA and testing subcontractors who can absorb a portion of project spend toward Local Value Added. Handover documentation is produced in IKTVA submission format, not as a standard project closeout package.
On infrastructure, we deploy to in-Kingdom cloud regions — AWS Riyadh, Azure Saudi North — where client security policy or SDAIA data residency requirements demand it. That deployment decision is made at scoping, not retrofitted after architecture is locked.
For more on how we structure offshore engagements for Saudi enterprise clients and Aramco supply chain vendors, see our offshore software development for Saudi Arabia page. If you have a specific Aramco supply chain scenario, book a scoping call and we will walk through the IKTVA structure for your contract.
