Saudi Arabia has published its updated Investment Law of the year 1446H
The Kingdom of Saudi Arabia published a new Foreign Investment Law on 11 August 2024.
The new Law, issued on 22 July 2024 under Royal Decree No. M/19, replaced the existing foreign investment law in place since April 2000. The new Law comes into force in early February 2025.
In summary, the new Law aims to enhance the investment environment in Saudi Arabia, contribute to economic development in tandem with Saudi Vision 2030 and the National Investment Strategy, and create jobs.
It is one of several laws in Saudi Arabia issued in recent years to improve the regulatory framework for investment in the Kingdom, including the Civil Transactions Law (2023), Companies Law (2022), Private Sector Participation Law (2021) and Bankruptcy Law (2018). The new Law was drafted following a comparative research exercise that considered investment laws in Indonesia, Singapore, Germany, the UAE, Turkey and the USA amongst other jurisdictions.
It has been drafted in line with best practices contained in laws in other jurisdictions and internationally, including laws and rules used by the Gulf Co-operation Council, World Trade Organisation, and bilateral investment treaties.
Key points include:
Equality between investors
The new Law will apply to both domestic and international investors and to investors in special economic zones (SEZ), subject to other legislation applicable to the SEZs.
Equality of investment
The new Law provides greater protection for investors from the expropriation of their investments, with guaranteed equal treatment of domestic and foreign investors, and protections for intellectual property and trade secrets.
Greater rights of remittance
The new Law expands the ways for foreign investors to repatriate monies including profits and the proceeds of liquidation or sale.
Incentives for investment
Subject to future guidance, the new Law empowers authorities to incentivise investment in specific areas.
Streamlined investment
The new Law changes the way for investors to obtain regulatory approval for their investments. Investors will in future be required to register with the Ministry of Investment.
Access to dispute resolution
The new Law expressly permits investors to use dispute resolution mechanisms alternative to litigation, including arbitration, mediation and conciliation.
The new Law anticipates the publication in future of detailed rules that implement its principles.
