The Saudi Kingdom has always been an attractive environment and fertile ground for foreign investors. With the Kingdom’s Vision 2030, a new national transformation plan and economic development strategy, there is now a greater opportunity for investors to partake in building the future, and to take advantage of exceptional economic opportunities.
Saudi Arabia aims to upsurge foreign direct investment to about $18.6 billion, and also to create the largest number of career opportunities for its citizens as well as to diversify the Kingdom’s source of income.
Investments have since the year 2000 been structured by the Foreign Investment Act of the Kingdom. The General Authority for Foreign Investment is moving swiftly to improve its enterprises and services, including increasing the validity period of a foreign investment license from a year to five, and decreasing the time necessary to issue such a license from 53hrs to about 4hrs.
The act administers both foreign entities and individuals. It openly allows a multiplicity of investment activities, as long as they are not forbidden. Activities such as manufacturing civil explosives, military devices and equipment, real estate brokerage services, security and investigation services are prohibited. The list of banned activities is updated yearly to keep up with economic developments and changes.
The act in addition equates the projects of foreign investors with the projects of nationals in all respects especially when it comes to incentives and guarantees.
Article five of the act clarifies that a foreign investor may wholly own any licensed enterprise. It also clearly gives the right to foreign investors to transfer their liquidation surplus or profit shares abroad.
The act also clarifies the consequences for those who disobey its rules after an offender has been given reasonable time to rectify their conduct. They may then be subjected to a fine of up to $133,265 or subjected to the suspension of some incentives and advantages.
The kingdom’s General Authority for Investment is at work to regulate the processes for issuing a foreign investment license. That aim is to unify and speed up procedures, so as to enable investors to obtain investment license and having their companies listed on the commercial register automatically with the help of passport numbers.
The new dispensation illustrates the tough appetite of the Saudi market for overseas investors, together with the willpower to back them with full guarantees of their legal rights. The General Authority for Investment has made available all necessary information that would-be investors may need on its online portal.