Saudi Arabia aims to reduce bureaucracy to attract foreign investments, enhancing its position as a leading investment hub in the Middle East amid growing regional competition.
Easing Obstacles
In a statement sent to “Bloomberg,” the Ministry of Investment stated that Saudi Arabia seeks to facilitate the process of foreign investors injecting funds into the country.
The ministry revealed that a “one-time registration” process for investors will be implemented, according to updated investment regulations.
This eliminates the need for multiple licenses and prior approvals, significantly reducing paperwork and bureaucratic hurdles.
So what
The updated law, announced in August, will ensure “equal treatment” between foreigners and locals.
It will also guarantee freedom to manage investments, transfer funds, and appeal against penalties and violations.
Additionally, investors will have more flexibility in resolving disputes, including the option to settle them outside of court.
These changes come as the Kingdom “struggles” to achieve its goal of attracting foreign direct investment.
This is a key component of the “Vision 2030” agenda led by Crown Prince Mohammed bin Salman, which aims to diversify Saudi Arabia’s economy away from oil revenues.
Some context
Saudi Arabia faces “strong competition” from hubs like Dubai and Abu Dhabi, which rely on English common law as the basis for their legal systems.
They also implement investor-friendly regulations, which have enabled them to attract foreign investments, global companies, and talent in recent years.
Last year, Saudi Arabia received a little over USD 19 billion in foreign direct investment, according to its calculations.
Although this exceeds the annual average of USD 17 billion for the period from 2017 to 2022, it falls short of the annual target of $22 billion.
The “largest Arab economy” hopes to surpass USD 100 billion in annual foreign direct investment by 2030.
This goal seems distant at present, but “reducing bureaucracy” will be the first step toward achieving it.
Now what
The Ministry of Investment is expected to publish details of the updated investment regulations at the end of this month, which will come into effect at the beginning of next year.
The Saudi Cabinet had approved the Investment Law, which is one of the pillars of the National Investment Strategy.
