FDI in figures

Saudi Arabia is the main recipient of the foreign direct investments in the Gulf and Middle-East with UDS 21 billion in 2007. FDI stocks are constantly on the increase. The Saudi Arabian government has invested massively in national infrastructures in order to attract investments. Even though the global economic crisis has slowed down the national economy, Saudi Arabia nevertheless maintained a positive growth in 2009. Some of the features that attract investors to the country are a stable exchange rate and the inflation under control, as well as extensive privatization programs. The dynamic performance of the banking sector is driving the growth of the non-oil sector. Lastly, access to the world's largest oil reserves, very low energy costs and a high standard of living are decisive factors for foreing investors.

Why you should choose to invest in Saudi Arabia

Strong points

Once Saudi Arabia became a member of WTO in 2005, the foreign investment climate in the Kingdom substantially improved. From an investor's point of view, the country's strong points are economic stability, the large local market with a high spending power (and a population of over 27 million), sound infrastructures and a well-regulated banking system.

Weak points

The week points are the inadequate legal framework in resolving commercial disputes, the lack of transparency in applying the intellectual property legislation, the government imposed quotas of Saudi employees in companies, the delayed payment of some government contracts, a restrictive visa policy for all workers, a very conservative cultural environment and enforced segregation of the sexes in most business and social settings.

Government measures to motivate or restrict FDI

According to the law on foreign direct investment, revised in 2000, foreigners are now allowed to invest in all sectors of the economy, except for specific activities on a “negative list”.  This list continues to shrink as Saudi Arabia attempts to liberalize trade.

Foreign investors are no longer required to take local partners in a number of sectors and may own real estate for company activities. They are allowed to transfer their company money outside the country and can sponsor foreign employees.

In order to facilitate investments in the Kingdom, the Saudi Arabian General Investment Authority (SAGIA) has set up an Investment Services Centre (ISC). The ISC must decide to grant or refuse a license within 30 days of receiving an application from an investor.

Bilateral investment conventions signed by Saudi Arabia

Saudi Bilateral Investment Agreements

Procedures relative to foreign investment

Freedom of establishment

Not guaranteed

Acquisition of holdings

Possible

Competent organization for the declaration

Ministry of Finance, Saudi Arabia

Requests for specific authorizations

Saudi Arabia maintains a Negative List that tabulates sectors not open to foreign investment (visit SAGIA site). The sectors currently closed to foreign investment include three manufacturing categories and 13 service industries. The list includes real estate investment in Mecca and Medina, some sub-sectors in printing and publishing, audiovisual and media services, land transportation services excluding the inter-city transport by trains, and upstream petroleum. SAGIA periodically reviews the list.

Finding assistance for further information

Investment aid agency

Saudi Arabian General Investment Authority (SAGIA)

Other useful resources

Saudi Chamber of Commerce and Industry
Riyadh Chamber of Commerce and Industry
Jeddah Chamber of Commerce and Industry