The updated Investment Law is a comprehensive framework designed to replace the Foreign Investment Law and align with the ambitious objectives of Saudi Vision 2030. The Kingdom intends to become a global investment powerhouse by stimulating economic growth, diversifying revenue streams, fostering a business-friendly environment, and improving its rankings in key international indices. This strategic objective aims to create a more resilient, diversified, and sustainable economy by establishing a welcoming and secure environment for both local and foreign investors, attracting greater capital inflows, promoting economic diversification, supporting the development of various investment sectors, increasing the private sector’s contribution to the GDP, and preserving investor rights.

These actions are integral to the ongoing execution of comprehensive reforms in the investment-related laws and regulations in the Kingdom. This article aims to elucidate the overarching visions and objectives encapsulated in the updated Investment Law, while also delineating some of the most significant rights afforded to foreign investors in Saudi Arabia.

Investment in Saudi Arabia Under the Updated Investment Law

Investment in Saudi Arabia is a highly significant process in which a natural person or a legal entity, referred to as an investor, who may be a Saudi national or a foreigner, allocate their own capital to establish expand, develop, finance, partially or wholly own, or manage an investment project within the Kingdom of Saudi Arabia to cultivate financial gains.

Capital may include any asset with monetary, tangible, or intangible value, particularly the following:

• Company shares and stocks.
• Contractual rights.
• Fixed or movable assets.
• Intellectual property rights.
• Rights (including licenses, permits or the like) granted under any law.

On the other hand, the capital shall not include loans, bonds, sukuk, and public and private debt securities.

Updated Investment Law Objectives

This Law aims to develop and enhance the competitiveness of the investment environment in the Kingdom, contribute to economic development, and create job opportunities by providing an attractive investment climate, in accordance with relevant laws; this shall include the following:

• Facilitating the establishment of investments, ownership of assets therein, and the exit therefrom or liquidation thereof.
• Guaranteeing and promoting the rights of investors.
• Guaranteeing equal treatment for local and foreign investors.
• Ensuring transparent, efficient, and fair procedures for investors and their investments.
• Promoting the principle of competitive neutrality and fairness and ensuring equal opportunities in investments.

Rights of Foreign Investors in Saudi Arabia

Investment in Saudi Arabia represents a fundamental and strategic objective for foreign investors. Therefore, the updated Investment Law has emphasized the need to delineate the primary rights of foreign investors in the Kingdom. An investor shall have the following rights:

• A foreign investor may engage in investment in any sector or activity available for investment.
• He shall be treated equally to other investors, and local and foreign investors shall be treated equally under similar circumstances.
• He shall be treated fairly and justly.
• His investment may not be fully or partially confiscated except pursuant to a final judicial ruling, nor may such investment be directly or indirectly expropriated except for public interest, in accordance with legal procedures, and in return for a fair compensation.
• He shall have the right to transfer his funds within or outside the Kingdom without delay; this shall include, but shall not be limited to, transferring the proceeds of his investment and the profits gained therefrom as well as the proceeds of the sale or liquidation thereof through legal channels using any recognized currency, and disposing of such funds through any other lawful means.
• He shall have the right to manage his investment, dispose of such investment in accordance with the law, and own any property necessary for the conduct of his business.
• Protection of his intellectual property and trade secrets.
• Facilitation of administrative procedures and provision of necessary support and assistance by the competent authority (Any ministry or public entity with a separate legal personality).

The investor shall comply with all the laws and legislations applicable in the Kingdom and with the Kingdom’s obligations under international agreements to which it is a party, as well as the foreign investor shall, prior to engaging in any investment activity included in the list of excluded activities, apply to the Ministry of Investment for approval. The Ministry shall refer the application to the competent authority. The foreign investor shall, prior to making any change in the ownership of his investment in any of the restricted activities included in the list of excluded activities, apply to the Ministry for approval. The Ministry shall refer the application to the competent authority.

As part of the Kingdom’s commitment to protecting the rights of foreign investors, the Ministry of Investment shall provide investors with access to any available information or statistical data, deliver essential services to facilitate any investment-related procedures, and strive to address complaints submitted by investors in accordance with clear and transparent procedures. Additionally, without prejudice to relevant laws, the competent authority shall grant investment incentives, such as benefits, facilities, or exemptions, to investors in accordance with objective and fair eligibility criteria.

The Investment Law stipulates that any person against whom a decision is issued by the Ministry of Investment may appeal said decision before the competent court within (thirty days) from the date of notification thereof.

Investment Dispute Resolution in Saudi Arabia

The continuity of investment is a critical concern for investors, as is the effective resolution of any disputes that may arise. Consequently, the Updated Investment Law stipulates that the investor who is a party to any dispute, including disputes with the competent authority, may resort to the competent court, unless the parties to the dispute agree otherwise. Additionally, investors may agree to resolve their disputes through alternative dispute resolution methods, including arbitration, mediation, and conciliation.

In conclusion, the Kingdom of Saudi Arabia stands out as a premier investment destination, thanks to its progressive policies and stable economic environment intended to attract foreign investments. As part of Vision 2030, the Kingdom strives to enhance its investment climate by offering various incentives, streamlining legal processes, and providing advanced infrastructure that meets the needs of foreign investors. Such commitment to attracting foreign investments reflects Saudi Arabia’s dedication to diversifying its economy and promoting sustainable development, thereby opening broad avenues for investors and contributing to comprehensive economic growth.

What services does Dr. Fahad Alrefaei & Partners Consulting & Law Firm offer to investors in Saudi Arabia?

With our deep understanding of Saudi Arabia’s legal environment and economic regulations, Dr. Fahad Alrefaei & Partners Consulting & Law Firm is uniquely positioned to provide comprehensive legal services to foreign investors. Our firm offers a full range of services to support investors, including:

• Company Incorporation: Assisting foreign investors in establishing and registering their companies with Saudi government authorities, including the Ministry of Commerce and Investment.
• Foreign Investment Licenses: We assist you in obtaining the necessary licenses to engage in investment sectors such as industry, commerce, real estate, and others.
• Employment Contracts: Offering guidance on the regulatory frameworks governing the employment of both Saudi and expatriate workers, including compliance with Saudization policies and residency permit requirements.
• Contract Drafting and Review: Drafting and reviewing partnership agreements, supplier contracts, and client agreements to ensure the protection of the investor’s interests.
• Registration of the Trademarks: Facilitating the protection of trademarks, patents, and intellectual property rights for investors.
• Legal Dispute Resolution: Advocating on behalf of the investor in the resolution of commercial disputes through negotiation, arbitration, or litigation in Saudi courts.

For inquiries regarding foreign investment services in Saudi Arabia, please do not hesitate to contact us at 920012753 or via email: [email protected]. We look forward to receiving your inquiries.