National Classification for the Economic Activities Structure
It is a guide that unifies the description of economic activities for each sector and economic activity across all countries, within a unified classification and code. The National Classification of Economic Activities is derived from the International Standard Industrial Classification of All Economic Activities - Revision 4 (ISIC4) issued by the Economic and Social Council of the United Nations.
In order for the whole world to speak a common language related to the economy, there must be a unified guide and code for each sector and economic activity at the global level.
Currently, hundreds of different economic activities are addressed worldwide, and although these activities may share similar descriptions, they differ in their impact on national output from one country to another.
It refers to all the activities or services provided by the organization that generate a financial return. Sometimes, the organization may not receive financial returns from its activities, as is the case with charitable organizations that rely on donations.
The classification of economic activities in the National Classification of Economic Activities (ISIC4) is divided into 21 parts (sections), each composed of a single item. Each part is further divided into 87 divisions, and each division consists of two items. Subsequently, each division is subdivided into 237 groups, with each group made up of three items, which in turn divides into 415 classes, where each class consists of four items.
In the national classification, these classes are divided into branches consisting of five items. Finally, these branches are subdivided into economic activities, each composed of six items. This new classification allows for the flexibility to update any future changes to the guide, as well as the ability to create new codes for subcategories of activities at more than five levels according to future requirements.
Yes, it is official and approved. The royal decree No. 44302, dated 25/9/1438 AH, confirmed that ministries and government entities related to economic activities should adopt the classification used by the General Authority for Statistics as the sole approved classification for economic activities in the Kingdom, and work to implement it before 1/1/2018.
At the local level, the importance of the classification lies in the following:
- Facilitating the exchange and flow of data between various local institutions and agencies.
- Standardizing methods of reading and presenting data.
- Easing data processing.
- Simplifying local comparisons.
At the international level, the importance of the classification includes:
- Standardizing the categorization and presentation of data.
- Making it easier to conduct comparisons between countries.
- Facilitating the exchange of international experiences and keeping up with the latest developments.
- Simplifying the standardization of economic and social indicators and concepts related to classifications.
- Facilitating the process of issuing government licenses for commercial establishments.
- Achieving the desire of private sector establishments to expand their business activities through the precise economic activities outlined in the classification.
- Enhancing the efficiency of government support for emerging commercial activities.
- Standardizing the classification of establishments among all relevant government agencies.
- Establishing criteria for local, regional, and international comparisons among private sector establishments across various classifications.
- Providing a more accurate classification of the strength of commercial establishments based on the economic activity of each sector.
- Standardizing codes and descriptions of economic activities to improve the investment environment in the Kingdom.
- Identifying the most rapidly growing economic activities in the Kingdom.
You can identify the establishment's current activity or any changes that may occur through the link and user guide for the Web Service of the National Classification of Economic Activities.