Saudi Arabia's Council of Ministers has approved an updated investment law for the kingdom building on previously announced reforms under Vision 2030 and the National Investment Strategy.

 

The updated law brings together several existing freedoms and rights and expressly applies them to investors under one unified framework, providing investors with greater transparency, flexibility and confidence.

 

The updated law is based on international investment principles including:

• Enhanced investor rights: Investors will be afforded the rule of law, fair treatment, property rights, intellectual property protection and the freedom to manage investments and seamless fund transfers.

• Transparency and clarity: The updated law brings together the rights and duties of investors under a unified legal framework, aligned with international best practice.

• Eased regulatory restrictions: A simplified registration will replace international investor licensing.

• Streamlining procedures and governance: This will be done through dedicated service centres to facilitate government transactions and streamline investment processes.

• Fair competition: The law fosters a fair and competitive market where private enterprises can thrive in a dynamic and innovative ecosystem.

• Leveling the playing field: Equal procedural treatment without prejudice to domestic or international investors.

• Effective dispute resolution: Access to the best-in-class dispute resolution in affiliation with Saudi Arbitration Centre and other affiliates.

 

The update, in conjunction with Saudi Arabia’s comprehensive reform agenda, offers investors unprecedented opportunities, demonstrating Saudi Arabia’s commitment to being open for investment, even amid a global decline in FDI, said a statement.

 

According to the World Investment Report 2024, published by UN Trade and Development, pro-investment measures have accounted for less than half of the new investment policies introduced by advanced economies in each of the last six years.

 

The pro-investment measures introduced by Saudi Arabia in recent years include the introduction of the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law and Special Economic Zones.

 

These initiatives and developments, in addition to incentives, facilities, and enablers, have motivated investors to seek a positive, supportive, and stable investment environment. 

 

They have also helped to drive rapid investment growth, with gross fixed capital formation increasing by 74% from 2016 to nearly $300bn in 2023, and FDI inflows by 158%, from $7.46 billion in 2017 to $19.3bn in 2023.

 

Khalid Al-Falih, Minister of Investment, 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 policy direction outlined in Vision 2030 allows investors to invest with certainty and to 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 an enhanced quality of life offering to investment specific measures such as the establishment of special economic zones.”

 

Developed by the Ministry of Investment of Saudi Arabia (MISA), the updated law follows an extensive consultation process investors and in line with global best practices. 

 

The law is also compatible with Gulf Cooperation Council (GCC), World Trade Organization (WTO) and other bilateral investment treaties and international obligations. 

 

The executive regulations will come into effect beginning in 2025, the statement said. - TradeArabia News Service