The Saudi Cabinet approved an updated Investment Law on August 11, 2024 to regulate all investments in the Kingdom and replace the Foreign Investment Law. The law aims to develop and enhance the competitiveness of the investment environment, contribute to economic development, and Competitive justice by providing an attractive investment climate.
Table of contents
What is the updated investment law?
What are the aims of the Updated Investment Law?
Differences between the Foreign and updated Investment law
The Foreign Investment law
The updated Investment law
How the updated investment system defined the investor?
How does the updated investment system contribute to attracting investments?
What is the updated investment law?
The updated investment law is a new legal framework developed to bring more equality between foreign and local investors. It aims to modernize the foreign investment law to be more flexible and adaptable to global and local economic changes. Additionally includes several improved procedures that facilitate the entry of investors into the Saudi market, including preserving intellectual property and facilitating dealings with sectors and governments.
What are the aims of the Updated Investment Law?
- Streamlining the investment landscape: The law aims to simplify and enhance the current investment environment in Saudi Arabia.
- Boosting attractiveness and competitiveness: It seeks to make the Kingdom’s investment climate more appealing and competitive by consolidating the core elements of the investment framework.
- Providing a comprehensive framework: The law offers investors a unified set of rights, duties, and procedures, creating a more coherent and transparent system.
- Increasing investment inflows: By improving the overall investment landscape, the law is expected to attract higher levels of investment across various sectors.
- Job creation and employment: Increased investments will lead to more job opportunities for Saudi citizens, reducing unemployment rates.
- Human capital development: The inflow of foreign investments will facilitate the transfer and localization of international expertise and knowledge, enhancing the skills and qualifications of the Saudi workforce.
How the updated investment system defined the investor?
The updated investment law in Saudi Arabia provides a clear and comprehensive definition of who qualifies as an investor. First, an “investor” refers to any natural person (individual) or legal entity (such as a company or organization) that commits capital or resources to a project or business within Saudi Arabia with the intention of generating a profit.
The updated law aims to create a more investor-friendly environment by offering clarity on the rights and obligations of investors, promoting transparency, and ensuring that investments contribute to the economic development of the Kingdom. This definition is designed to encourage both domestic and international investment by providing a stable legal framework.
Differences between the Foreign and updated Investment law
The Foreign Investment Law is the system that defines the conditions and requirements that foreign investors must adhere to in order to enter the Saudi market, and it was missing some of the facilities that encourage attracting foreign investors. The updated investment law focuses on improving and modernizing procedures and regulations to encourage investment in general, whether local or foreign.
The Foreign Investment law
The Foreign Investment Law stipulates that a foreign investor must obtain an investment license. Furthermore the Council of Ministers issues the activities in which a foreign investor cannot invest, there are some restrictions on the transfer of funds, it does not guarantee the preservation of property rights, and the investor has no right to settle disputes with the government or municipalities except in an amicable manner.
The updated Investment law
The updated investment law achieved equality and competitive justice between foreign and local investors. As a matter of fact it is issuing many provisions that play a pivotal role in attracting foreign investors. Foremost among these provisions is the abolition of investor licensing and only trademark registration, liberalization of the practice of economic activities and limiting the exception to a list established by the permanent ministerial committee to examine foreign investments according to objective criteria, freedom to transfer funds in and out, in addition to ensuring the freedom of intellectual property.
How does the updated investment law contribute to attracting investments?
- Fulfillment of competitive justice
By achieving investment security and competitive justice between foreign and local investors, as both have the same rights and privileges, as well as the same right to resort to the court to settle disputes with the sectors or the government, as well as the same right to resort to the court to settle disputes with the sectors or the government.
- Facilitating procedures
The elimination of investor licensing is a great incentive for investors from all over the world to come to the Saudi investment market. In addition to facilitating the issuance of certain licenses.
- Achieving flexibility
The system provides greater flexibility in the freedom to transfer funds in and out of the country. which make it attractive to investors looking for a stable and adaptable investment environment.
- Stimulating growth
The system contributes to stimulating economic growth by attracting more local and foreign investments, Additionally creating new job opportunities and increasing productivity.
Conclusion
The updated investment law is characterized by achieving competitive justice between foreign and local investors. The new law guarantees intellectual freedom, transparency and clarity. the Kingdom aims to attract $100 billion in investments by 2030. Investing in Saudi Arabia is a promising opportunity that creates great potential for economic growth. Business Link, is The Top Choice for Business Setup Services in Saudi Arabia and the UAE. contact them to get a free consultation to enter this competitive race and join the promising investment environment.
