An Overview of the Updated Saudi Investment Law

On February 17, 2025, 180 days after the date of its publication, the updated Saudi Investment Law came into force, replacing the previous Foreign Investment Law issued by the Royal Decree No. (M/1) dated 5/1/1421H. The Updated Saudi Investment Law aims to align with the Kingdom’s Vision 2030 and the national strategic objectives for investment, in addition to following international best practices, improving and enhancing the competitiveness of the investment environment in the Kingdom, contributing to economic growth, and creating job opportunities.

It should be noted that this Law aligns with the principles and policies adopted in the Kingdom in accordance with Directive No. (16917) dated 27/3/1440 AH, and seeks to increase GDP and promote economic diversification by supporting the development of investment sectors, increasing the contribution of the private sector to GDP, protecting investors’ rights, providing for the guarantees against expropriation, and protecting intellectual property rights.

This Law consists of sixteen articles which govern the rights and duties of local and foreign investors, and specify the incentives, in addition to the procedures for registering investments and investors’ rights, as well as the means available to settle disputes that may arise. The Updated Saudi Investment Law also includes penalties for violating its provisions. Moreover, this Law includes definitions of a range of investment terms, most notably the definition of local and foreign investors, and investment incentives.

As part of easing the procedures, the registration of investments has become smoother as it is no longer necessary to obtain licenses for foreign investment. However, the Law specifies certain sectors that are prohibited for foreign investment to protect the national security and strategic industries, with periodic updates to these sectors, unless prior approval is obtained from the designated ministry.

Finally, the Updated Saudi Investment Law addresses the penalties associated with violating its provisions, categorizing violations into two types: simple violations, and serious violations. In this regard, the penalties shall be applied gradually, starting from a notification to the investor in case of a simple violation, and in case of failure to correct the violation within the specified period, the investor may be penalized with either a warning or a fine of up to three hundred thousand Saudi riyals (SR300,000), with the possibility of doubling the fine in case of repeated violations or canceling the registration in eligible cases.

Through these amendments, the Updated Saudi Investment Law represents an important step towards enhancing the investment environment in Saudi Arabia, promoting the realization of Vision 2030 goals and placing the Kingdom among the leading investment destinations globally, through a flexible and comprehensive legal framework that guarantees the rights of investors and stimulates sustainable economic growth.

If you are local or foreign investors looking to take advantage of the promising opportunities offered by the updated Saudi Investment Law, our specialized legal team is ready to provide comprehensive legal consultations to ensure your full compliance with the law and maximize your business benefits from the available incentives.

📞 Don’t hesitate to contact us for exceptional professional consultation that guarantees the success of your investments in the Kingdom!

Walid Othman
Head of Investment & Transactions Department
📧 [email protected]

Mahitab Agelan
Associate Lawyer
📧 [email protected]