Everything You Need to Know on Saudi Investment Law Updates 2024

Saudi Arabia has released a series of new significant amendments to its investment law on 11 August 2024. The updated law promises to develop and enhance the competitiveness of the Saudi investment environment, contribute to economic development, and create job opportunities by providing an attractive investment landscape. Minister of Investment Khalid Al-Falih said: "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." The law shall enter into force one hundred and eighty days following the date of its publication in the Official Gazette (Umm al-Qura). This new law is expected to be on or around 07 February 2025.

What are the Most Significant Changes in the New Law?

Key Features of the Updated Law:

- Rights of Investors

• Equal Treatment
  Under the new Investment Law, both local and foreign investors are treated equally and enjoy identical rights and obligations in similar circumstances. This equality ensures fair competition and fosters a conducive environment for investment. The law's transparent complaints handling mechanism further reinforces these principles, aligning Saudi Arabia's investment practices with international standards.
• Investment Protection
  
  • Investments are protected from confiscation or expropriation, except in cases of public interest where legal procedures are followed and fair compensation is provided.
  • The Protection of investor intellectual property and trade secrets.
• Repatriation of Funds
  The investor has the right to freely transfer his profits, dividends, and capital inside or outside the Kingdom without delay or restrictions. This should be done through legal channels using any recognized currency, and disposing of such funds through any other lawful means.
• Investment Management
  The investor has 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.
• Simplified Procedures
  Streamlining administrative procedures and offering the necessary support from competent authority. If you are interested in Saudi Arabia investment, you have to be familiar with Investor Residency. It is ideal for investors who want to conduct business and make investments in Saudi Arabia. To learn more about Investor Residency, you can check out our blog: Everything You Need to Know About the Saudi Premium Residency

- Freedom of Investment

The updated law indicates that the investors have complete freedom to invest in any sector or economic activity allowed by Saudi laws and regulations.

- Investment Incentives

The updated law introduces a set of unique incentives in order to encourage investment and create a favourable environment. These incentives are granted according to transparent and impartial criteria. The incentives are ensuring fairness and equal treatment while adhering to existing laws, regulations, and international agreements.

- Obligations of Investors

Investors must adhere to all Saudi laws and regulations, as well as the Kingdom's commitments under international agreements.

- Regulations (Comprehensive Service Centre)

The new law introduces a comprehensive service centre to streamline the investment process. This centre will be responsible for registering investments, managing investor data, and facilitating interactions with other government authorities. A national investor registry will be established to record and maintain confidential information about investments. This marks a significant improvement over the previous foreign investment law, emphasizing the importance of efficient services and continuous innovation to support investors and enhance the overall investment experience. 

- List of Excluded Activities

The law grants the competent authority the power to determine a list of excluded activities. If the foreign investors want to invest in any of these activities, they must obtain prior approval.  In order to ensure transparency, Ministry of Investment ("MISA") will publish this list to inform and guide potential investors.

- Protection of National Security

The Ministry of Investment, as the Kingdom's foreign investment gateway, has the authority to prevent investments that pose a threat to national security. These decisions must be based on objective criteria that align with international legal principles governing a country's right to protect its national interests.

- Use of Alternative Dispute Resolution Methods

The new law has the enhancement of dispute resolution options for investors. In addition to the traditional court system, investors now have the flexibility to choose alternative dispute resolution (ADR) methods. This includes: arbitration, mediation, or conciliation. Investors can use alternative dispute resolution methods to resolve disputes with other investors or government entities, except when the disagreement is with the main government authority. In that case, they must go to court unless they all agree on a different solution. These new alternatives strengthen investor protections and provide greater flexibility in resolving conflicts.

- Activities, Special Economic Zones and Acquired Rights

It is noteworthy that this law does not override any specific laws or regulations that apply to particular economic activities or special economic zones.

Is Saudi Arabia a Good Place to Invest in?

Foreign direct investment (FDI) balance in Saudi Arabia increased by 61% from 2017 to 2023, reaching $215 billion.

In recent years, Saudi Arabia has introduced pro-investment measures including the introduction of the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law and Special Economic Zones. These notable reforms have spurred significant investment growth. Gross fixed capital formation surged by 74% from 2017 to 2023, reaching nearly $300 billion. Meanwhile, FDI stock increased by 61% to $215 billion, and FDI inflows soared by 158% to $19.3 billion. These figures demonstrate the success of the Kingdom's efforts to attract foreign investment and stimulate domestic economic activity. The Saudi investment initiatives and enhancement have motivated investors from all over the world. "If you are interested in Saudi sports sector investment, we recommend you to check our blog: Investing in Saudi Arabia's Sports Sector: Opportunities and Challenges

Competitive Advantage: Saudi Arabia's updated investment law positions the country as a competitive destination for foreign investment compared to other countries in the region and globally.

Strategic Location: The country's strategic location, economic growth potential, and abundant resources make Saudi Arabia an attractive investment destination.

The updated law represents a significant shift in Saudi Arabia's investment landscape. Saudi Arabia aims to attract both domestic and foreign investors by creating a unified framework and streamlining procedures. These procedures include: the Investment Incentives, fair treatment, property rights, freedom to manage investments, protection of intellectual property, and smooth transfer of funds. Overall, this reform is a crucial step towards Saudi Arabia's goal of boosting investment and economic growth.

Don't Miss Out on Saudi Arabia's Booming Investment Market!

The Saudi 's new investment law offers a wealth of opportunities for both domestic and foreign investors. This is your chance to be part of Saudi Arabia's exciting economic transformation. Here's why you should consider investing in the Kingdom now:

 Equal Treatment & Transparency: The law guarantees fair competition and a transparent environment for all investors.

Investment Protection: Your investments are safeguarded from expropriation and you have full control over your intellectual property.

Simplified Procedures: Streamlined processes and a dedicated service center make investing in Saudi Arabia easier than ever.

Profitable Incentives: Benefit from attractive incentives designed to boost investment and create a favorable business climate.

Strategic Location & Growth Potential: Capitalize on Saudi Arabia's strategic location, abundant resources, and promising economic future.

TASC - Your Partner in Saudi Investment Success

TASC the Middle East's leading recruitment and HR solutions specialist, is here to help you navigate the new investment landscape. With our extensive experience and deep understanding of the Saudi market, we can guide you through every step of the process.

Contact our experts today and unlock your investment potential in Saudi Arabia!