The Saudi Council of Ministers (CoM) has recently approved full foreign investments in the transport, recruitment, audio visual and real estate sectors (the Sectors). Foreign direct investments (FDI) can be made in Saudi Arabia in all business activities that are not restricted to those which must be exclusively undertaken by Gulf Cooperation Council nationals or companies owned by them. This article provides a brief summary of the recent changes.
The negative list
The prohibited business activities for FDIs are listed in what is known as the "Negative List" (the Negative List) or any activities identified as such by the Saudi Arabian General Investment Authority (SAGIA). Based on the recent changes, the CoM has approved the amendment of the Negative List allowing foreign investors to undertake the following business activities in Saudi:
- Manpower recruitment services including recruitment agencies and offices;
- Media services related to audio-visuals;
- Real estate brokerage services; and
- Road transportation services.
Following the recent CoM, a number of foreign investors are expected to explore market entry and be part of this transformation phase. The precise licensing and investment requirements are yet to be announced by the officials. Based on our recent communications with the Saudi regulatory authorities, we have become aware that they are currently coordinating their efforts to develop and implement clear licensing procedures to facilitate FDIs in the Sectors.
The Saudi investment environment is going through constant changes with the implementation of Vision 2030 and the National Transformation Plan (2020). SAGIA has eased its restrictions and foreign investors are now able to obtain foreign investment licenses, in some cases, in less than a week with eased procedures and minimum requirements.
It is anticipated that Saudi officials will communicate further details regarding the licensing requirements and potential investments in due course