Saudi Arabia’s Council of Ministers has approved a new investment law, building on previously announced reforms under Vision 2030 and the National Investment Strategy. This updated law consolidates various existing freedoms and rights into a single, unified framework, providing investors with greater transparency, flexibility, and confidence. Key features of the updated law include:
- Enhanced Investor Rights: The law ensures the rule of law, fair treatment, property rights, intellectual property protection, and the freedom to manage investments and transfer funds seamlessly.
- Transparency and Clarity: The updated law unifies the rights and duties of investors under a clear legal framework, aligned with international best practices.
- Eased Regulatory Restrictions: A simplified registration process will replace the need for international investor licensing.
- Streamlined Procedures and Governance: Dedicated service centers will facilitate government transactions and streamline investment processes.
- Fair Competition: The law promotes a competitive market where private enterprises can thrive within a dynamic and innovative ecosystem.
- Equal Treatment: The law ensures equal procedural treatment for both domestic and international investors.
- Effective Dispute Resolution: Investors will have access to top-tier dispute resolution services in collaboration with the Saudi Arbitration Centre and other affiliates.
This update, part of Saudi Arabia’s broader reform agenda, offers investors unprecedented opportunities and underscores the Kingdom’s commitment to remaining open to investment, even amid a global decline in FDI, according to a statement. The World Investment Report 2024, published by UN Trade and Development, notes that pro-investment measures have made up less than half of the new investment policies introduced by advanced economies over the past six years. Saudi Arabia’s recent pro-investment measures include the introduction of the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law, and the establishment of Special Economic Zones. These initiatives, along with incentives, facilities, and enablers, have fostered a positive and stable investment environment, driving rapid investment growth. From 2016 to 2023, gross fixed capital formation increased by 74%, reaching nearly $300 billion, while FDI inflows surged by 158%, from $7.46 billion in 2017 to $19.3 billion in 2023. Khalid Al-Falih, Minister of Investment, stated, “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 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. The updated investment law builds on an extensive diversification agenda, from enhancing quality of life to establishing special economic zones.” The updated law, developed by the Ministry of Investment of Saudi Arabia (MISA), followed extensive consultation with investors and is aligned with global best practices. It is also compatible with Gulf Cooperation Council (GCC) regulations, World Trade Organization (WTO) agreements, and other bilateral investment treaties. The executive regulations for the law are set to take effect beginning in 2025, according to the statement. – TradeArabia News Service