Saudi Arabia FDI control

The following Competition practice note provides comprehensive and up to date legal information covering:

  • Saudi Arabia FDI control
  • 1. What is the applicable legislation?
  • 2. Which government or other body (or bodies) reviews foreign investments?
  • 3. What is the scope of the foreign investment regime? Does it only apply to specific sectors or types of investors (eg foreign or non-EU / non-WTO)? Are there specific rules for certain types of investors (eg state-owned enterprises)?
  • 4. What are the triggers or thresholds for the regime to apply? What types of transactions are caught? Is there a minimum level of shareholding or a control test that applies?  Are there any other thresholds that need to be met (eg based on turnover or market shares)?
  • 5. Are there any exceptions that may apply?
  • 6. Is there any discretion to review transactions that do not meet any thresholds for review?
  • 7. What are the grounds for review, eg public or national security or other grounds?
  • 8. What level of discretion do the relevant authorities have to approve or reject transactions? Is there scope for any other body to intervene?
  • 9. Where a transaction is caught by the regime, is notification mandatory and must closing be suspended pending clearance?
  • More...

Saudi Arabia FDI control

A conversation with Nicolas Bremer, partner at regional law firm BREMER, on key issues on foreign direct investment (FDI) control in Saudi Arabia.

1. What is the applicable legislation?

The principal legislations governing foreign investment in Saudi Arabia are Royal Decree M1/1421H on Foreign Investment in the Kingdom of Saudi Arabia (the FDI Law) and the Executive Regulations on the Foreign Investment Law (the Regulations). These establish a more traditional FDI regime that relies predominantly on providing incentives for foreign investment in some sectors and restricting or prohibiting engagement of foreign investors in other sectors. Incentives as well as some restrictions and prohibitions are aimed at economic goals. Through incentives Saudi Arabia seeks to entice foreign investment into specific sectors to grow industries that are underrepresented in the Saudi economy and attract talent, know-how and technology. Through restricting certain sectors the Kingdom aims to preserve some sectors of its economy for Saudi investment, thereby, securing revenues for its population. Other restrictions and prohibitions aim at protecting sectors that are of strategic importance to Saudi Arabia for economic, political—including social morals—security and other reasons from foreign influence.

There are some rumours about reforms that would establish an active FDI review regime similar to those recently emerging in European jurisdiction. Currently, Saudi law does not provide for such an FDI review process. Still, we have recently FDI

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