Saudi Cabinet approves updated Investment Law

The investment law will be pivotal role in achieving comprehensive development goals and diversifying the national economy's resources.

Minister of Investment, Khalid Al-Falih, said the new law complements many developmental measures taken by the Kingdom, while reaffirming its commitment to providing an attractive, supportive, and secure environment for local and foreign investors, state-owned SPA reported.

The Kingdom’s approach to enhancing the attractiveness and competitiveness of the investment environment, particularly in regulatory and legislative aspects, is based on the economic principles guaranteed by the rule of law, while considering the established investment principles and policies, which include the best global practices. This required a review of the foreign Investment Law, which was issued about 25 years ago, to formulate an integrated investment system catering to both Saudi and foreign investors alike.

Saudi Arabia has been issuing a number of laws since the launch of Vision 2030, within a series of regulatory and legislative reforms related to its investment environment, working in parallel with the Investment Law, including laws on civil transactions, privatization, companies, bankruptcy, and the initiative to establish special economic zones.

He clarified that the past few years have witnessed the implementation of more than 800 economic reforms to enhance the Kingdom’s global competitiveness, with the National Competitiveness Center playing a leading role in executing these reforms in collaboration with relevant government entities. All these laws and reforms contributed to a 74% increase in gross fixed capital, reaching nearly $300 billion in 2023 compared to 2017. Foreign direct investments increased by 61% between 2017 and 2023, reaching approximately $215 billion, and foreign direct investment inflows rose by 158% in 2023 to SAR 19.3 billion compared to 2017. These initiatives and developments, along with incentives, facilities, and enablers, have stimulated investors to invest in a positive, supportive, and stable investment environment.

The Minister emphasized that the updates introduced to the law will enhance its contribution to stimulating economic growth and strengthening the Kingdom’s position as a premier global investment destination, noting that the law and its executive regulations will come into effect in early 2025.

This law represents a unified framework for the rights and duties of investors and also aims to facilitate regulatory procedures with transparency and clarity in a flexible, fair, and competitive environment.

Interested parties can get more information about the Investment Law through the link.