Royal Decree No. (M/19) dated 16/01/1446 AH
By the grace of God Almighty
We, Salman bin Abdulaziz Al Saud
King of the Kingdom of Saudi Arabia
Based onArticle (Seventy) of the Basic Law of Governanceissued by Royal Order No. (A/90) dated 27/8/1412 AH.
And based onArticle (Twenty) of the Council of Ministers Lawissued by Royal Order No. (A/13) dated 3/3/1414 AH.
And based onArticle (Eighteen) of the Shura Council Lawissued by Royal Order No. (A/91) dated 27/8/1412 AH.
After reviewing Shura Council Decision No. (287/27) dated 27/10/1445 AH.
After reviewing Council of Ministers Decision No. (40) dated 10/1/1446 AH.
We have decreed the following:
First: Approval of the Investment Law, in the attached form.
Second: The law - referred to in item (First) of this decree - shall not prejudice any rights acquired before its effective date for any investor, including any licenses or incentives granted to them, until the expiration of the periods related to those rights.
Third: Exception to the provision of Article (One) of the law - referred to in item (First) of this decree - the competent authority referred to in Article (Eight) thereof shall mean the Permanent Ministerial Committee for Examining Foreign Investments formed under item (First) of Council of Ministers Decision No. (83) dated 30/1/1443 AH.
Fourth: The Ministry of Investment shall prepare the regulation stipulated in Article (Fifteen) of the law - referred to in item (First) of this decree - after coordination with relevant authorities as it deems appropriate, and the Ministry of Energy shall participate in preparing the provisions related to Article (Six) and paragraphs (3) and (4) of Article (Seven) of the law.
Fifth: The Prime Minister, ministers, and heads of relevant independent agencies - each within their jurisdiction - shall implement this decree.
Salman bin Abdulaziz Al Saud
Council of Ministers Decision No. (40) dated 10/01/1446 AH
The Council of Ministers
After reviewing the correspondence received from the Royal Court No. 79088 dated 3/11/1445 AH, including the telegram of His Excellency the Minister of Investment No. 392 dated 17/1/1444 AH, regarding the draft Investment Law.
After reviewing the aforementioned draft law.
After reviewingForeign Investment Lawissued by Royal Decree No. (M/1) dated 5/1/1421 AH.
After reviewingRegulation of the Saudi Business Centerissued by Council of Ministers Decision No. (456) dated 11/8/1440 AH.
After reviewing Council of Ministers Decision No. (83) dated 30/1/1443 AH.
After reviewing the National Investment Strategy, approved by Council of Ministers Decision No. (134) dated 28/2/1443 AH.
After reviewing the minutes No. (202) dated 26/6/1444 AH, and memoranda No. (3676) dated 26/11/1444 AH, No. (1622) dated 8/5/1445 AH, No. (2113) dated 12/6/1445 AH, and No. (3229) dated 7/9/1445 AH, prepared by the Bureau of Experts at the Council of Ministers.
After reviewing the recommendation of the Council of Economic and Development Affairs No. (2-45/8/T) dated 15/6/1445 AH.
After considering Shura Council Decision No. (287/27) dated 27/10/1445 AH.
After reviewing the recommendation of the General Committee of the Council of Ministers No. (12210) dated 24/11/1445 AH.
It is decided as follows:
First: Approval of the Investment Law, in the attached form.
Second: The law - referred to in item (First) of this decision - shall not prejudice any rights acquired before its effective date for any investor, including any licenses or incentives granted to them, until the expiration of the periods related to those rights.
Third: Exception to the provision of Article (One) of the law - referred to in item (First) of this decision - the competent authority referred to in Article (Eight) thereof shall mean the Permanent Ministerial Committee for Examining Foreign Investments formed under item (First) of Council of Ministers Decision No. (83) dated 30/1/1443 AH.
Fourth: The Ministry of Investment shall prepare the regulation stipulated in Article (Fifteen) of the law - referred to in item (First) of this decision - after coordination with relevant authorities as it deems appropriate, and the Ministry of Energy shall participate in preparing the provisions related to Article (Six) and paragraphs (3) and (4) of Article (Seven) of the law.
A draft Royal Decree has been prepared in this regard, its text is attached hereto.
Fifth: The Ministry of Investment shall exercise its powers stipulated in paragraph (4) of Article (Seven) of the law - referred to in item (First) of this decision - in a manner that does not conflict with Article (Four) of the Regulation of the Saudi Business Center, issued by Council of Ministers Decision No. (456) dated 11/8/1440 AH, and the Ministry shall coordinate with the Center regarding the establishment or operation of physical centers to serve the business sector, in line with the kind directive conveyed by Royal Court telegram No. 35629 dated 19/5/1444 AH.
Prime Minister
Investment Law and its Executive Regulation
Article 1: Definitions
In this Law, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:
Law: Investment Law.
Regulations: Implementing Regulations of this Law.
Competent Authority: Any ministry or public agency with an independent legal personality.
Ministry: Ministry of Investment.
Minister: Minister of Investment.
Investment: The use of capital to establish, expand, develop, finance, manage, or partially or fully own an investment project in the Kingdom for the purpose of economic gain.
Capital: Any asset which has a material value, whether cash, in-kind, or intangible, as specified in the Regulations, including the following in particular:
a) Company shares and interests.
b) Contractual rights.
c) Fixed or movable assets.
d) Intellectual property rights.
e) Rights granted under any law, such as licenses, permits, or the like. Capital shall not include loans, bonds, financing sukuk, and public and private debt instruments.
Investor: A local or foreign investor.
Local Investor: A natural or legal person of Saudi nationality who engages in investment.
Foreign Investor: A natural or legal person who engages in investment, and who is not deemed a local investor in accordance with the provisions of this Law.
Investment Incentives: The benefits, facilitations, or exemptions granted to an investor to encourage him to engage in investment, in accordance with relevant legal provisions.
List of Excluded Activities: A list of activities the investment therein by foreign investors is prohibited or restricted, as provided for in Article 8 of this Law.
Recognized Currency: Any currency recognized by the Saudi Central Bank.
Article 2: Purpose of the Law
This Law aims to develop and enhance the competitiveness of the investment environment in the Kingdom, contribute to economic development, and create job opportunities by creating an attractive investment climate, in accordance with relevant laws; this shall include the following:
1. Facilitating the establishment of investments, ownership of assets in such investments, and exit therefrom or liquidation thereof.
2. Guaranteeing and promoting the rights of investors.
3. Guaranteeing equal treatment for local and foreign investors.
4. Ensuring transparent, efficient, and fair procedures for investors and their investments.
5. Promoting the principle of competitive neutrality and fairness and ensuring equal opportunities in investments.
Article 3: Freedom of Investment
Without prejudice to the provisions of Articles 8 and 9 of this Law and the provisions of relevant laws, an investor may engage in investment in any sector or activity available for investment.
Article 4: Rights of Investors
1. Without prejudice to the provisions of relevant laws, an investor shall have the following rights:
a) He shall be treated equally to other investors, and local and foreign investors shall be treated equally, under similar circumstances.
b) He shall be treated fairly and justly.
c) His investment may not be fully or partially confiscated except pursuant to a final judicial ruling, nor may such investment be directly or indirectly expropriated except for public interest, in accordance with legal procedures and in return for fair compensation.
d) He shall have the right to transfer his funds within or outside the Kingdom without delay; this shall include, but shall not be limited to, transferring the proceeds of his investment and the profits gained therefrom as well as the proceeds of the sale or liquidation thereof through legal channels using any recognized currency, and disposing of such funds through any other lawful means.
e) He shall have the right to manage his investment, dispose of such investment in accordance with the law, and own any property necessary for the conduct of his business.
f) Protection of his intellectual property and trade secrets.
g) Facilitation of administrative procedures and provision of necessary support and assistance by the competent authority.
2. The competent authority shall, upon taking any measures for public interest, including measures necessary to fulfill the Kingdom's international obligations, maintain public order, or protect national security, observe the rights stipulated in paragraph (1) of this Article.
3. The Ministry shall, as specified in the Regulations, provide the investor with any available information or statistical data as well as the necessary services to facilitate any procedures relating to his investment, and shall seek to resolve complaints filed thereby, in accordance with clear and transparent procedures.
Article 5: Obligations of Investors
The investor shall comply with all the laws and legislations applicable in the Kingdom and with the Kingdom’s obligations under international agreements to which it is a party.
Article 6: Investment Incentives
Without prejudice to relevant laws, the competent authority shall grant investment incentives to investors in accordance with objective and fair eligibility criteria. The Regulations shall specify the provisions necessary for the implementation of this provision.
Article 7: Registration
1. The Ministry shall establish a national register for investors in which all the information and data relating to their investments are entered. The Ministry shall manage and update said register and maintain its confidentiality.
2. A foreign investor shall register with the Ministry prior to engaging in any investment, as specified in the Regulations. This shall not apply to investments in securities that are subject to the provisions of the Capital Market Law.
3. The competent authority shall provide the Ministry with any information or data required to establish or update the register provided for in paragraph (1) of this Article, in accordance with the manner specified in the Regulations. The Ministry may communicate with the competent authority to satisfy any requirements for establishing or updating said register.
4. The Ministry may, through its comprehensive service center, receive the investor’s applications to obtain the legal approvals necessary for engaging in an investment activity, including any licenses or permits. The Ministry shall coordinate with the competent authority in charge of issuing such approvals to ensure that the investor satisfies the necessary legal requirements.
Article 8: List of Excluded Activities
1. The competent authority shall issue and update the list of excluded activities, and the Ministry shall publish said list.
2. The foreign investor shall, prior to engaging in any investment activity included in the list of excluded activities, apply to the Ministry for approval. The Ministry shall refer the application to the competent authority.
3. The foreign investor shall, prior to making any change affecting the ownership of his investment in any of the restricted activities included in the list of excluded activities, apply to the Ministry for approval. The Ministry shall refer the application to the competent authority.
Article 9: Protection of National Security
The Ministry may suspend any foreign investment for the purpose of protecting national security, provided that the suspension decision is based on objective grounds, is consistent with the Kingdom's obligations under international agreements to which it is a party, and is in accordance with the procedures specified in the Regulations.