Minister of Investment, Eng. Khalid Al-Falih, revealed that the updated Saudi Investment Law, along with its regulations, will take effect at the start of 2025, He mentioned that this new law provides unique opportunities for investors and will strengthen Saudi Arabia’s status as a leading global investment hub.

Saudi Arabia’s Commitment to a Secure and Transparent Investment Environment

“The updated law builds on the Kingdom’s development efforts and highlights its commitment to creating a welcoming, supportive, and secure environment for both local and international investors”, said Al-Falih.

Alignment with Vision 2030 and National Investment Strategy

Al-Falih’s statement followed the recent approval of the Investment Law and its executive regulations by the Saudi Council of Ministers, This update aligns with the broader reforms announced under Vision 2030 and the National Investment Strategy, It underscores Saudi Arabia’s dedication to fostering investment, even as foreign direct investment (FDI) faces challenges globally.

The new law is a key part of the National Investment Strategy, a pillar of Vision 2030, emphasizing the role of investment in achieving comprehensive development and diversifying the national economy. It combines various investor rights and freedoms into one clear framework, offering greater transparency, flexibility, and confidence to investors.

Eng. Al-Falih reiterated that the updated law strengthens Saudi Arabia’s commitment to providing a secure, welcoming space for investors while driving economic growth. “Vision 2030 allows investors to invest with certainty and grow confidently, even as many markets face volatility. This law is part of our broader strategy, which includes special economic zones and quality-of-life improvements,” he noted.

The law, developed by the Ministry of Investment of Saudi Arabia (MISA), is the result of a thorough consultation process with investors, ensuring it aligns with global best practices, It is also compatible with Gulf Cooperation Council (GCC), World Trade Organization (WTO), and other international investment treaties and agreements.

Read More: The New Saudi Investment Law: A Key to Vision 2030

Key Features of the Updated Investment Law

The updated law is built on global investment principles, aiming to create a more investor-friendly environment. These key features include:

• Enhanced Investor Rights: Investors will benefit from legal protection, fair treatment, property rights, intellectual property security, and the freedom to manage their investments with seamless fund transfers.
• Transparency and Clarity: The law unifies the rights and obligations of investors under a clear legal framework, in line with international best practices.
• Eased Regulatory Restrictions: Simplified registration will replace the need for international investor licensing, making it easier for foreign investors to operate.
• Streamlined Procedures and Governance: Dedicated service centers will simplify government processes and speed up investment-related transactions.
• Fair Competition: The law promotes a fair, competitive market where private businesses can grow in a dynamic, innovative environment.
• Equal Treatment for All: Investors, whether local or international, will receive equal treatment without any bias.
• Effective Dispute Resolution: Investors will have access to top-tier dispute resolution services through the Saudi Arbitration Centre and other affiliates.

According to the 2024 World Investment Report by UN Trade and Development, less than half of the new investment policies introduced by advanced economies in recent years have been pro-investment. In contrast, Saudi Arabia has introduced several pro-investment laws, including the Civil Transactions Law, Private Sector Participation Law, Companies Law, Bankruptcy Law, and the establishment of Special Economic Zones. These initiatives, along with incentives and support, have fostered a positive and stable investment climate.

As a result, Saudi Arabia has seen remarkable investment growth, with gross fixed capital formation rising by 74% from 2016, reaching nearly $300 billion by 2023. Foreign direct investment (FDI) inflows surged by 158%, increasing from $7.46 billion in 2017 to $19.3 billion in 2023.

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FDI Growth and Economic Reforms Boost Saudi Investment Climate

Minister Al-Falih highlighted that the foreign direct investment (FDI) balance surged by 61% from 2017 to 2023, reaching approximately $215 billion, He noted that FDI inflows saw a remarkable increase of 158% in 2023 compared to 2017, reaching $19.3 billion, This growth has been driven by a range of initiatives, incentives, and supportive measures that have created a positive and stable investment environment.

Al-Falih also pointed out that over the past few years, more than 800 economic reforms have been implemented to boost Saudi Arabia’s global competitiveness, The National Competitiveness Center, in collaboration with various government agencies, played a key role in these reforms, As a result, total fixed capital formation increased by 74% since 2017, reaching nearly $300 billion by 2023.

The Minister emphasized that the updates to the Investment Law will further stimulate economic growth and solidify Saudi Arabia’s status as a premier global investment destination.

Minister of Municipal and Rural Affairs and Housing, Majid Al-Hogail, echoed these sentiments, stating that the updated Investment Law will enhance Saudi Arabia’s competitive investment environment. He noted that the law supports the government’s vision to create smart, prosperous cities by facilitating investments that provide integrated services in the municipal and housing sectors.

The Investment Law was developed through joint efforts between the Ministry of Investment and various government agencies, in consultation with international organizations and investors. This collaborative approach ensures that the law aligns with international best practices.

The updated Saudi Investment Law, set to take effect in early 2025, represents a significant milestone in Saudi Arabia’s ongoing efforts to enhance its investment climate. By integrating global best practices and aligning with Vision 2030, the law promises to offer investors a more transparent, secure, and flexible environment. The comprehensive framework not only strengthens investor rights and simplifies regulatory processes but also reinforces Saudi Arabia’s position as a leading global investment hub. With robust economic reforms and a commitment to fair competition, the Kingdom is poised to attract and retain international investment, driving sustainable economic growth and development, This progressive move underscores Saudi Arabia’s determination to create a dynamic investment landscape that fosters innovation and prosperity, ultimately contributing to the realization of its ambitious Vision 2030 goals.