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Saudi Arabia announced new business regulations aimed at boosting transparency and easing the process of investing in the kingdom as it looks to attract more foreign capital to support economic diversification.
The updated investment law enhances investor rights by guaranteeing the rule of law, fair treatment and the freedom to transfer funds without delay, among other things, the Ministry of Investment said on Sunday.
Foreign investor licenses will also be scrapped and replaced with a “simplified” registration process, while dedicated service centers will open to help expedite the process of investing in Saudi Arabia. The reforms are due to take effect in early 2025.
“The law reaffirms Saudi Arabia’s commitment to creating a welcoming and secure environment for investors,” Investment Minister Khalid Al-Falih said in a statement.
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 kingdom’s goal is to bring in more than $100 billion in foreign direct investment a year by 2030 as part of an effor to develop new industries that will create jobs and generate fresh sources of revenue outside of the oil industry.
The country, which has little experience beyond the petroleum sector in things like complex manufacturing, also sees FDI as critical to the transfer of knowledge needed to help it scale up in new sectors.
FDI inflows amounted to just over $19 billion in 2023 “- above the annual average of $17 billion from 2017-2022 but shy of last year’s target of $22 billion. The kingdom took in $4.5 billion in the first quarter and is targeting flows of $29 billion for 2024.
Saudi Arabia said the updated law takes international practices into account and was developed after soliciting input from global investors and organizations.
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