Unlock New Opportunities with Saudi Arabia's Game-Changing Investment Law

 Saudi Arabia is taking significant steps to level the playing field for domestic and international investors by easing regulatory restrictions. As the largest economy in the Arab world, the kingdom aims to boost foreign investments.

Khalid Al Falih, Minister of InvestmentSaudi Investment Minister

Key features of the new law include:

• Equal treatment for all investors: Ensuring fair competition and eliminating discriminatory practices.
• Simplified investment procedures: Streamlining the registration process and reducing bureaucratic hurdles.
• Investor incentives: Offering targeted incentives to boost investment in priority sectors.
• Stronger investor protection: Enhancing intellectual property rights and providing efficient dispute resolution mechanisms.
• Dedicated investor support: Establishing a one-stop shop for investor services.

 On Sunday, the Council of Ministers approved an updated investment law, consolidating various regulations into a single framework designed to offer greater transparency, flexibility, and confidence to investors, according to a statement from the Ministry of Investment.

“The law reaffirms Saudi Arabia’s commitment to creating a welcoming and secure environment for investors, driving economic growth, and enhancing the kingdom’s position as a premier global investment destination,” said Khalid Al Falih, Minister of Investment.

He added, “The policy direction outlined in Vision 2030 allows investors to invest with certainty and grow with confidence at a time when many other markets are experiencing considerable volatility.”

Saudi Arabia has implemented numerous reforms to improve its business environment and attract foreign investment, which is crucial for its economic transformation agenda. The kingdom aims to draw foreign funds for its giga-projects under the Vision 2030 plan to reduce its reliance on oil.

Recent investment-friendly measures include the civil transactions law, private sector participation law, companies law, bankruptcy law, and regulations for special economic zones.

Foreign direct investment (FDI) inflows into the kingdom were $19.3 billion last year, down from $32.8 billion in 2022. However, FDI inflows have surged by 158% from $7.46 billion in 2017 to $19.3 billion in 2023. In the first quarter of 2024, FDI inflows increased by 0.6% year-on-year to 17 billion Saudi riyals ($4.5 billion).

The kingdom aims to attract $100 billion annually in FDI by 2030 to boost its non-oil gross domestic product and has set a goal of increasing FDI to 5.7% of GDP by the end of the decade.

According to the ministry, the executive regulations of the updated investment law will come into effect at the beginning of 2025.

The updated law aligns the rights and duties of domestic and foreign investors with international practices and replaces foreign investor licensing requirements with a simplified registration process. It promotes equal treatment for domestic and foreign investors under similar circumstances and re-evaluates restrictions on economic activities to ensure fairness.

Additionally, the law aims to attract investments by offering incentives based on specific, objective, and pre-announced eligibility and evaluation standards. It also enhances investor rights, including intellectual property protection, fair competition, and effective dispute resolution methods.