New Saudi investment law to be implemented next year

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All Gulf Cooperation Council (GCC) countries are working to provide more facilities to local or foreign investors in their countries. Recently, Saudi Arabia issued a new investment law under granting investors more financial freedom in all transactions that concern them. This system will enter into force at the beginning of 2025.

The issuance of this decision aims to enhance the value of local investments and projects in the country, while working to provide more job opportunities for Saudis after they are trained and qualified to work in institutions that are established in various economic sectors.

The new law indicates that the investor will enjoy many rights, including equality in dealing with other investors, and equality in treatment between local and foreign investors, in similar circumstances. The law also indicates the necessity of treating the investor in a fair and equitable manner, not confiscating his investment in whole or in part, except by a final judicial ruling, and not expropriating his ownership directly or indirectly except for the public interest and in accordance with statutory procedures and in return for fair compensation.

Another advantage for the investor is that he is given the freedom to transfer his money inside and outside Saudi Arabia without delay, including transferring his investment returns and profits and selling or liquidating them through regular channels using any recognized currency, and disposing of them by any other legitimate means. It also gives the investor complete freedom to manage his investment, dispose of it legally, and possess what is necessary to conduct his business, with the necessity of protecting his intellectual property and confidential commercial information, facilitating his administrative procedures, and providing him with the necessary support and assistance from the competent authority.

The new system requires competent authorities to take into account to achieve the public interest, including the measures necessary to fulfill the Kingdom’s international obligations, maintain public order, or for national security considerations - taking into account the rights stipulated in the paragraphs mentioned in the law, while the investor shall be responsible - as determined by the regulations - for any information or statistical data available, and provide him with the necessary services to facilitate any procedures related to his investment, and seek to address the complaints he submits, in accordance with clear and transparent procedures.

There are many changes included in the foreign investment system compared to the new updated investment system, whereby a local investor means any natural or legal person who invests and has Saudi Arabian citizenship. As for the foreign investor, he is considered any natural or legal person who invests and is not considered a local investor according to the provisions of the system. That is, the definition of the investor in the updated system is considered more comprehensive, in contrast to the previous foreign investment system, which included foreign investors only. The concept of capital between the foreign investment system and the modernized investment system is more precise and comprehensive.

The issuance of this system in Saudi Arabia seeks to accelerate the pace of foreign investments, raise the level of participation of private sector institutions in the economy, while working to protect investors’ funds from confiscation and expropriation, as well as protecting intellectual property. The aim of all of this is to enhance transparency, simplify investment procedures, ease restrictions, resolve disputes and achieve equal opportunities and fair competition between the institutions and companies involved in establishing these projects.