Saudi Arabia is looking to cut red tape and make it easier for foreign investors to pump cash into the kingdom, its latest effort to establish itself as the Middle East’s premier investment hub amid stiff competition.
The country plans to introduce a new “one-time registration process” for investors under updated investment rules, eliminating the need for several licenses and pre-approvals and “significantly reducing paperwork and bureaucratic hurdles,” the Ministry of Investment said in a statement sent to Bloomberg News.
The updated law — announced in August and due to take effect in 2025 — will also provide equal treatment for foreigners and locals, freedom to manage investments and repatriate funds, and the ability to appeal penalties and violations. Additionally, investors are set to have more flexibility in how they choose to resolve disputes, including by doing so outside the court.
The changes come as the kingdom struggles to meet its own targets for attracting the kind of foreign direct investment that’s critical to Crown Prince Mohammed bin Salman’s Vision 2030 agenda to diversify the Saudi economy away from oil.
Foreign investors and law firms caution that the success of the new measures will hinge on how the laws are implemented. The Ministry of Investment said it plans to publish details on those rules for public consultation by late September.
“Practical application is everything,” said Graham Coop, a partner at Pinsent Masons in London. “Once we see the implementing regulations and how they’re implemented in practice, we’ll be better able to judge whether the new investment law and regulations will actually have all the positive effect.”
Despite its efforts, Saudi Arabia faces stiff competition from hubs like Dubai and Abu Dhabi, which have financial centers that follow English Common Law and business-friendly regulations that have helped attract foreign investment, global firms and talent for years.
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