Saudi Arabia Overhauls Foreign Investment Rules

Saudi Arabia has moved to a simpler, unified framework for investors after its new Investment Law came into force in early February 2025, replacing the two-decade-old Foreign Investment Law. The reform ends the requirement for a separate "foreign investment licence" and treats Saudi and non-Saudi investors equally in similar circumstances.

Under the updated rules, foreign investors must register with وزارة الاستثمار in the National Register of Investors before starting any activity. This registration is now a precondition for obtaining commercial registration from the Ministry of Commerce and any sectoral licences from other authorities.

Investors are free to operate in any sector not listed as an "Excluded Activity." That excluded list is issued and maintained by the Permanent Ministerial Committee for the Examination of Foreign Investments, and activities on it require prior approval from وزارة الاستثمار. Foreign investors may hold minority, majority, or full 100% ownership in a Saudi entity, as long as it does not carry out excluded activities.

The framework strengthens investor confidence with protections against expropriation, guaranteed dispute-resolution mechanisms, and safeguards for intellectual property rights — all applied equally to local and foreign investors. At the same time, وزارة الاستثمار retains the ability to suspend or restrict foreign investment on national security grounds, based on objective criteria.

Capital market opens wider

The push continues in the securities market. From 1 February 2026, the Saudi capital market opens to all categories of foreign investors, allowing direct investment in listed shares without the previous Qualified Foreign Investor regime or swap-based access. A unified set of rules now governs direct foreign participation in the Main Market, with aggregate foreign ownership caps still applying to individual listed companies.

For residents and businesses across الرياض, جدة and beyond, the changes signal a more streamlined path to setting up and investing, supporting the wider goals of رؤية السعودية 2030. Existing licence holders under the old regime move to registration-based entry through transitional arrangements.

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