During the Invest Saudi Forum at Expo Dubai 2020, Dr. Saad Al-Sharani of the Ministry of Investment delivered positive news of a 400% increase in the issuance of Saudi Arabia (KSA) investment licenses. This dramatic leap was recorded in Q4 of 2021, in comparison with the same quarter in 2020.
By Q4 of 2021, the Ministry of Investment had issued 4,439 new foreign investment licenses alone. This promising surge in interest is thought to be due to economic recovery after the pandemic. While it currently ranks 25th globally, KSA aims to reach the top ten by improving foreign investment laws and fortifying investor protection.
It also plans to raise the contribution of small, medium, and finite enterprises from 20% to 30%, offering them superior economic privileges and effective participation in local markets. The 2030 initiative brings many advantages to foreign investors, who will now benefit from both the investment law reforms and the unprecedented increase in KSA opportunities.
The NIS has launched plans to improve the KSA investment environment.
The National Investment Strategy’s (NIS) recent initiatives demonstrated clear aims to boost the Saudi economy significantly. According to Dr. Al-Shahrani, the Kingdom is set to become one of the 15 largest economies worldwide. With approximately 40 new initiatives supporting legislative reforms in the Saudi investment environment, the goal certainly appears to be within reach.
The legislative reforms are designed to bring foreign investments into the region of $100b (SR388 billion) by 2030. The achievement will in turn assist the NIS in reaching and reviewing its annual targets, which are in place to give the necessary support to emerging sectors.
Entertainment, tourism, sports, transport, culture, and education are just a few of the sectors that will benefit from the promising KSA foreign investment reforms. As a result, many more jobs will open, and projections indicate that unemployment will be as low as 7% by 2030.
KSA investment regulations received more than 555 reforms.
KSA has big plans for its flourishing economy, and openly welcomes foreign investment in support of this ongoing expansion. As such, investment regulations in Saudi Arabia have been subject to over 555 reforms, all designed to enable flexible, smooth, and prosperous investments for foreign nationals.
The reforms included expediting the process of starting a business, which can now be done in 30 minutes, as opposed to the original 15-day waiting period. Another positive result was that in 2020, the number of SMEs also rose to over 626,000.
As foreign investment in Saudi Arabia is a top priority for the Saudi Government, its regulations and controls now ensure full support of international investors’ rights and investment goals. The aims include boosting market efficiency and function, broadening access, and improving transparency and corporate governance.
As a result, both liquidity and investor security have been enhanced, risks have been mitigated, and pricing is significantly less volatile. Furthermore, market practices are now fully aligned with international standards.
The current Saudi foreign investment licensing regulations.
The Ministry promotes investment in the Kingdom of Saudi Arabia, sets the foreign investment regulations, enables investors to enter the Kingdom and issues the required licenses.
Vision 2030 has opened up all areas of investments for foreigners in Saudi Arabia, with the aim to raise foreign direct investments from around 3.8% to 5.7% via the enactment of the new investment laws; it also plans to fully open up foreign ownership.
With the great attention the Kingdom has paid to reforming its investment regulations, the current investment climate in Saudi Arabia is now undeniably welcoming to foreign investors. Those looking to benefit from the country’s recent economic resurgence will now find it beneficial than ever before, however the legal landscape will need to be considered, specifically as navigation of this can becoming overwhelming during the initial investment and incorporation period.