Saudi Arabia amends investment law to boost FDI

Saudi Arabia has approved an updated investment law, building on Vision 2030 and the National Investment Strategy reforms, according to the Saudi Press Agency.

The amended law seeks to boost transparency and ease the process of investing in Saudi Arabia as the kingdom looks to attract more foreign capital to support economic diversification.

The Ministry of Investment said on Sunday that the revised law strengthens investor rights by ensuring the rule of law, fair treatment, protection of property and intellectual property rights, and the freedom to transfer funds without delay.

The law simplifies the regulatory landscape by replacing the previous international investor licensing with a streamlined registration process. Furthermore, dedicated service centres will expedite government transactions and streamline investment procedures, enhancing overall governance.

Saudi Arabia said the updated law fosters a level playing field for both domestic and international investors, promoting fair competition and a dynamic business ecosystem.

“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,” said Khalid Al-Falih, Saudi Arabia’s Minister of Investment.

“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.”

Saudi Arabia looks to boost FDI

Saudi Arabia has taken several steps in recent years to attract foreign investment, including issuing visas specifically for investors, creating special economic zones with lower tax rates, and introducing new laws related to civil transactions and bankruptcy.

The UN Trade and Development’s World Investment Report 2024 reveals that the kingdom’s pro-investment measures over the past six years represent less than half of the new investment policies introduced by the world’s advanced economies.

The structural reforms have helped accelerate investment growth, with gross fixed capital formation increasing by 74 per cent from 2017 to nearly $300bn in 2023.

Saudi Arabia’s goal is to attract more than $100bn in foreign direct investment (FDI) a year by 2030 as part of a broader strategy to develop new industries that will create jobs and generate fresh revenue beyond the oil industry.

FDI stock increased by 61 per cent from 2017 to 2023 to reach nearly $215bn in 2023, and FDI inflows surged by 158 per cent to $7.5bn in 2017 to $19.3bn in 2023. Saudi Arabia hauled in $4.5bn in the first quarter and is targeting flows of $29bn for 2024.

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