FOREIGN INVESTMENT LAW

HIGHLIGHTS OF THE FOREIGN INVESTMENT LAW IN SAUDI ARABIA

• Definitions of Capital and Investment: Clarifies that capital includes various assets like shares, intellectual property, and licenses, excluding loans and debt instruments. Investment is defined as using capital to engage in projects for economic gain.
• Fair Treatment and Protection: Ensures equal treatment for local and foreign investors and protects against expropriation unless legally justified with fair compensation.
• Repatriation of Funds: Guarantees the right to transfer funds, including investment proceeds and profits, without delay, and allows for management and disposal of investments.
• Investment Incentives: Permits ministries and public agencies to offer incentives based on fair criteria, supporting Vision 2030 and regional growth.
• Registration: Establishes a national investor register managed by the Ministry, requiring foreign investors to register before investment activities, and enables local investments to be recorded.
• Comprehensive Service Center: Creates a single-window service center for streamlined application and approval processes.
• Excluded Activities: Allows foreign investors to apply for exceptions to restricted activities, subject to approval by a specialized committee.
• National Security: Provides the Ministry with the authority to suspend investments for national security reasons.
• Alternative Dispute Resolution: Introduces the option for investors to use arbitration, mediation, or conciliation instead of solely relying on courts.
• Penalties: Defines penalties for violations, including warnings, fines, and possible cancellation of registration, with an appeal process.
• International Agreements: Ensures that the law respects Saudi Arabia’s international obligations, with international agreements prevailing in case of conflict.
• Special Economic Zones: Exempts certain investments in special economic zones from the general provisions of the law, while ensuring minimum rights for investors.

ISSUER OF THE FOREIGN INVESTMENT LAW IN SAUDI ARABIA

The Foreign Investment Law is issued by the Saudi Arabian government, with implementation overseen by the Zakat, Tax, and Customs Authority (ZATCA), which now manages various aspects of investment regulation and oversight.

WHO IS SUBJECT TO THE FOREIGN INVESTMENT LAW IN SAUDI ARABIA?

The Foreign Investment Law applies to foreign individuals, companies, and entities seeking to invest in or operate businesses within Saudi Arabia. This includes international corporations, investment funds, and private investors aiming to participate in various economic activities under the law’s framework.