1. the Provisions of Old and New Foreign Investment Laws
A Comparison Between
the Provisions of Old and
New Foreign Investment Laws
in Saudi Arabia

2. Date of Enactment of Investment Law
Old Law :
New Law :

3. Number of Projects
Old Law Operating Joint Ventures
with total finance amounting to
US$ 50 billion (in 21 years)
New Law newly licensed projects
US$ billion (in 3 years)

4. Licensing Authorities
Old Law Foreign Investment Secretariat –
Ministry of Industry and Electricity
New Law Saudi Arabian General Investment
Authority (SAGIA)

5. Authorities Providing Services to Investors
Old Law Several Ministries and Government
Agencies
New Law Saudi Arabian General Investment
Authority (SAGIA) Investor’s Service
Centers (One-Stop-Shop) which has
representatives from nine investment
related ministries

6. Investment fields open to foreign investors
The project must be in development with technical skills and expertise
Old Law
All fields are open for investment except those included in the negative list
New Law

7. Period for taking a decision on the investment application
Not Specified
Old Law
Maximum 30 days
New Law

8. Possibility of obtaining more than one License
Restricted, must be in the same activity
Old Law
The foreign investor may obtain more than one license in diverse activities
New Law

9. Type of foreign investment
Law favors joint ventures over 100% foreign owned projects
Old Law
100% foreign owned projects are allowed by the new law in addition to joint ventures
New Law

10. Incentives Old Law New Law
Foreign capital enjoys the incentives offered to national capital only in the manufacturing industries
Saudi share in ownership not less than 25%
Old Law
The foreign investment project enjoys the same incentives offered to the local projects
New Law

11. Investment guarantees
Not specified (although they are actually applied)
No expropriation cases since 1957
Old Law
New Law
The foreign investor shall have the right to transfer his share derived from selling his equity or profits out of the Kingdom, as well as any amounts required for the settlement of his contractual obligations, pertaining to the project.
Investments related to the foreign investor shall not be confiscated without a court order. They may not be subject to expropriation except for the public interest against an equitable compensation according to regulations

12. Old Law New Law Real Estate Ownership
Ownership of real-estates not open to foreign investors
Old Law
The foreign facility licensed under the Foreign Investment Act shall be entitled to possess the required real-estates as might be reasonable for practicing the licensed activity or for the housing of all or some of the staff.
Non-Saudi national’s Real-Estate Regulation allows foreign investment in real-estates worth SR 30 million or more
New Law

13. Penalties on violations
Old Law
Cancellation of license or denying the company some incentives, after receiving warning from the Ministry of Industry and Electricity to correct the violation within a certain period.
The investor may appeal to the Board of Grievances within 30 days.
New Law
Withholding all or part of the incentives offered to the foreign investor.
Imposing a financial fine not exceeding SR 500,000
Cancellation of the license in case of continuity of violation after a written notification to rectify the violation within a certain period specified by SAGIA
A petition against the penalizing resolutions may be brought before the Board of Grievance according to its regulations

14. Tax Exemption Old Law New Law
Industrial and agricultural projects are offered 10 years holiday and other projects 5 years, provided that the local share forms 25% of the project capital
Tax on profits ranges between 20-45%
Old Law
An initial decree has been issued reducing tax on profits to 30%; and allowing transfer of loses to coming years.
New Law

15. Sponsorship
Foreign investors must work under the sponsorship of a Saudi citizen
Old Law
The foreign investor and his non-Saudi staff shall be sponsored by the licensed investment project
New Law