Riyadh, Saudi Arabia – Saudi Arabia has introduced new business regulations aimed at boosting transparency and simplifying the investment process, as part of its ongoing efforts to attract more foreign capital and support economic diversification.
The updated investment law, approved by the Council of Ministers on Sunday, seeks to level the playing field for both domestic and international investors. It guarantees the rule of law, fair treatment, and the freedom to transfer funds without delay, among other protections. The law also replaces the previous foreign investor licensing requirements with a simplified registration process.
The changes enhance investor rights by providing alternative legal recourse such as arbitration and settlement. The law also allows greater capital mobility and simplifies the investment process by eliminating the need for an investor license.
This follows previous business friendly reforms such as investor visas, special economic zones with lower taxes, and revisions to civil transactions and bankruptcy related laws. The changes are an effort to increase foreign capital inflows for the development of new industries to diversify and transform the economy.
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The government has set a goal of attracting $100 billion in foreign direct investment a year by 2030, with below target ($22 billion) inflows of $19 billion in 2023.
Minister of Investment Khalid Al Falih emphasized that the law is part of Saudi Arabia’s Vision 2030 plan, which aims to reduce the kingdom’s reliance on oil by fostering economic growth through increased foreign direct investment (FDI). “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,” Al Falih said.
In recent years, Saudi Arabia has passed several reforms to improve its business environment, including laws on civil transactions, private sector participation, companies, and bankruptcy, as well as regulations for special economic zones. These measures are designed to attract foreign investments to support the kingdom’s ambitious giga-projects under Vision 2030.
FDI inflows into Saudi Arabia reached $19.3 billion in 2023, compared to $32.8 billion in 2022.
The new investment law is setto take effect at the beginning of 2025, with the goal of aligning the rights and duties of investors with international standards. It also promotes equal treatment between domestic and foreign investors, protects intellectual property, ensures fair competition, and provides effective dispute resolution mechanisms.
A new service center will be established to streamline procedures related to government transactions, making it easier for investors to navigate the process and support the flow of investments into the kingdom.