Saudi Investment Law 2024: Equal Treatment for Investors

Saudi Arabia's new Investment Law, issued on 11 August 2024 by Royal Decree M/19, is set to reshape how both Saudi and foreign investors do business in the Kingdom. The law repeals the 2000 Foreign Investment Law and enters into force around February 2025, following a 180-day preparation period.

The most significant change is the principle of equal treatment. The law applies to Saudi and foreign investors alike and guarantees equal investment opportunities under similar circumstances, subject to specific exclusions and reserved activities linked to national security.

What changes for foreign investors

Foreign investors will no longer need to obtain a dedicated foreign investment license. Instead, they must register with the Ministry of Investment (MISA) before starting activities, as long as those activities are not on the negative or excluded list. For excluded activities, prior approval from the Ministry is required. Once registration is completed and confirmed, investors can obtain their commercial registration from the Ministry of Commerce and any sector-specific licenses.

The law also strengthens protections. Investors are shielded against expropriation, which can only occur through a final judicial ruling, lawful procedures, and payment of fair compensation. Additional rights include fair competition, transparent and streamlined procedures, investment incentives, and effective dispute-resolution mechanisms — including arbitration, mediation, and reconciliation alongside recourse to competent local courts.

Notably, the law clarifies that loans, bonds, financing instruments, and debt instruments are not counted as share capital. The framework also covers investors in special economic zones, without affecting SEZ-specific legislation.

For the many expat entrepreneurs and companies operating in Riyadh, Jeddah, and beyond, the shift matters. Existing foreign investors with valid licenses face no additional requirements simply because of the new law; their status continues under the new regime, with registration replacing licensing. MISA is expected to publish implementing regulations and a simplified registration process, along with any updated procedures and fees.

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