From licence to registration: what Saudi Arabia's updated Investment Law changes

Saudi Arabia's updated Investment Law changes the entry point for foreign investors: the requirement to obtain a foreign-investment licence is replaced by a registration procedure, after which the investor may carry on economic activities.2 The previous Foreign Investment Law, issued by Royal Decree No. M/1 dated 5/1/1421H, is repealed.2

What the law says

• Registration. The Ministry of Investment establishes a national register of investors, and a foreign investor must register before making any investment, as the Implementing Regulations specify (Article 7).1
• Equal treatment. Domestic and foreign investors are to be treated equally in like circumstances.2
• Investor protections. The law addresses protection against expropriation without fair compensation, transfer of funds without delay, and protection of intellectual property and confidential business information.2
• Disputes. Investors may resort to the competent court unless the parties agree otherwise, and may agree on arbitration, mediation or conciliation (Article 10).1
• Entry into force. The law applies 180 days after its publication in the Official Gazette (Article 16).1

What did not change

Registration is not a licence to do anything. Certain activities remain excluded from foreign investment and require approval,2 and sector regulators continue to license regulated activities. The structure — who owns, who decides, how the entity is funded and how a partner can exit — still has to be designed.

What to check before you register

1. Is the activity, as you will describe it, on the excluded-activities list?
2. Which sector licences apply, and in what order?
3. Which vehicle fits how you will operate: subsidiary, branch, joint venture or acquisition?
4. Do your partner terms deal with deadlock, default and exit?

The licence step has gone. The decisions it used to force have not.

This note is general information, not legal advice. Check the text in force with the competent authority before acting.