Attracting foreign investments is central to the proper functioning of any economy in both the developing and developed world. Some countries depend heavily on foreign direct investments to support their economies. Such countries enact laws and regulations to regulate foreign investments. As a result, authorities and bodies are established in order to pave the way for foreign investors and remove any obstacles they may face. However, when such government bodies do not function properly, they can become one of the obstacles of attracting foreign investments.
Saudi Arabia has been depending on oil as the most important income source for a very long time. To reduce its dependency on oil and its price fluctuation, Saudi Arabia has been attempting to diversify its income sources. One of the alternatives, which Saudi Arabia is making great strides to obtain, is to attract foreign investment. As a result, it enacted its new Foreign Investment Law by the Royal Decree No. M/1 dated 5-1-1421 Hejrh, corresponding to 10/4/2000 Gregorian, and established the Saudi Arabian General Investment Authority (SAGIA) as a government body to be in charge of monitoring and regulating foreign investments.
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