Logo of Ministry of Investment
The Saudi Cabinet approved the Investment Law, which is one of the pillars of the National Investment Strategy.
The decision comes as part of the framework of the Kingdom's Vision 2030 as well as the pivotal role of investment in achieving comprehensive development goals and diversifying the resources of the national economy.
The Ministry of Investment highlighted the key differences between the updated Investment Law and the Foreign Investment Law.
It pointed out that the updated Investment Law cancels the Foreign Investment Law, which was issued by a Royal Decree in 1421 AH, and its Executive Regulations, which were issued by the decision of the General Investment Authority in 1435 AH.
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Key Differences Between Updated Investment Law, Foreign Investment Law |
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Subject |
Updated Investment Law |
Foreign Investment Law |
|
Name & Scope |
The Investment Law regulates the provisions of local and foreign investors. |
The Foreign Investment Law regulates the provisions of foreign investors. |
|
Investment Requirements |
- Canceling the investment license.
- Liberalizing the practice of economic activities and limiting the exception to a list prepared by the Permanent Ministerial Committee for Examining Foreign Investments according to objective criteria. |
- Requiring the foreign investor to obtain an investment license.
- The Cabinet has the authority to issue a list of types of activity excluded from foreign investment. |
|
Treatment of Local & Foreign Investor |
Ensuring equal treatment between the local and foreign investor. |
None |
|
Investment Incentives |
Strengthening the governance of investment incentives and facilities granted to the investor. |
None |
|
Investor Rights |
- Governance of investor protection by establishing a clear and transparent mechanism for handling complaints.
- Aligning the rights of the local and foreign investor with international investment principles and policies.
- Freedom of action in investment activity and freedom to transfer capital (without delay).
- Emphasis on the protection of intellectual property and confidential commercial information.
- Addressing the provisions of direct and indirect expropriation. |
None - Allocating specific rights to the foreign investor.
- Possibility of transferring funds.
None
- Addressing the provisions of direct expropriation. |
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Violations |
- Determining serious violations and non-serious violations in the executive regulations.
- Taking into account the principle of gradualism and setting standards for imposing penalties (taking into account the frequency of the violation, the size of the facility and the severity of the penalty).
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None |
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Dispute Settlement |
- Local and foreign investors may resort to the competent court in the dispute with the government entity, unless the parties to the dispute agree otherwise.
- Investors may agree to settle their disputes through alternative means of dispute settlement, including arbitration, mediation and reconciliation. |
- Settling disputes amicably between the foreign investor and the government |
The Ministry added that the IMF report indicated that the new Investment Law that was put forward for public consultations will help create equal opportunities for Saudi and non-Saudi investors by protecting their rights and supporting transparency.
The report stressed that there must be an effective strategy for announcing these measures, which will help ensure confidence in policies, establish investor expectations and reduce their uncertainty, it added.
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