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The Kingdom of Saudi Arabia realizes
that achieving its ambitious economic goals requires a steady flow of
technology and expertise into the country. Therefore, its policy is to
welcome foreign capital and invite it to participate in economic
development projects in cooperation with Saudi business. The
government's established policy is not to impose any restrictions on
the movement of capital into and out of the Kingdom and always to
respect private ownership.
In addition, foreign
investment that fulfills the requirements of the Foreign Capital
Investment Code enjoys all privileges of national capital and is
entitled to the same treatment, protection, and incentives accorded to
national capital. The Code requires that foreign capital be invested
in economic development projects (which, under the Code, do not
include petroleum and mineral projects) and that it be accompanied by
technical knowledge. Development projects are defined by the Ministry
of Industry and Electricity.
Provided that the share
of national capital is at least 25 percent, industrial or agricultural
projects that fulfill the above requirements enjoy the following
benefits:
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An income tax holiday
of up to 10 years from the commencement of commercial production.
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Ownership of land
according to the regulations governing land ownership by non-Saudis.
-
For industrial
projects, the same privileges as those enjoyed by Saudi capital
under the National Industries Protection and Encouragement
Regulations. These include:
-
Exemption from customs
duties on machinery, equipment, tools and spare parts imported for
industrial products.
-
Exemption from customs
duties on primary raw materials, semi-finished goods, containers,
etc., necessary for industrial projects (provided that similar items
are not sufficiently available locally).
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Provision by the
government of plots of land at a nominal rate for factories and
residential quarters for workers.
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Low electricity and
water rates.
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No restriction on
repatriation of profits.
-
Preferential treatment
for local products in government procurement in addition to
preferential treatment accorded to national products by Arab League
and Saudi Arabian bilateral trade agreements.
Saudia-Online.com
PRESS
RELEASE -- April 10, 2000Saudia-Online.com
Saudi Arabia
Approves New Foreign Investment Law
In a landmark decision,
Saudi Arabia Council of Ministers approved a new Foreign Investment
Law on Monday, April 10th, following the recommendation of
the Supreme Economic Council and the Majlis Al-Shura. King Fahd issued
a Royal Decree approving the law, thus significantly revising the way
foreign investment has been conducted in the Kingdom for more than 20
years.
The Council of Ministers
also approved the establishment of the General Investment Commission,
which will be responsible for proposing and implementing policies to
promote foreign investment in Saudi Arabia, and for issuing investment
licenses to foreign investors. H.R.H. Prince Abdullah bin Faisal bin
Turki has been appointed as the new investment body governor, with the
rank of Minister.
In a dramatic change
from the previous investment law, the new Foreign Investment Law
allows foreigners 100-percent ownership of the projects, as well as
the property required for the project itself or for housing company
personnel, while enabling them to retain the same incentives given to
national companies. For example, projects that are 100 percent
foreign-owned will be eligible for loans from the Saudi Industrial
Development Fund. Investors will also be able to hold investment
licenses in more than one type of activity. The new law has brought
significant changes to the previous sponsorship regulations. Foreign
investors and their non-Saudi employees will be sponsored under the
new licensed firm.
Another very significant
change is the reduction in the corporate tax rate for foreign
companies with profits over SR100,000 a year, from 45 percent to 30
percent. The new law also enables companies to carry forward corporate
losses for an unspecified number of years.
The General Investment
Commission will work towards streamlining the foreign investment
application process by creating a one-stop shop facility. It will be
required to respond to investment applications within 30 days. If the
Commission does not make a decision within this time frame, the
license will be issued. If the Commission declines the application for
some reason, the foreign investor is allowed to appeal the decision.
The new Foreign
Investment Law will become effective 30 days after it is published in
the Official Gazette.
UPDATES:
SAGIA rules stipulate
that no license should be issued if the minimum FDI is less than SR25
million for a project in the agricultural sector, SR 5 million in the
industrial sector, or SR2 million in the service sector.
RIYADH
(Saudi Arabia), August 17, 2002 –
The Saudi Arabian
General Investment Authority’s (SAGIA’s) Board of Directors approved
several changes to the “Executive Rules of the Foreign Investment Act”
on June 24, 2002 which were published in the local media on August 9,
2002.
The changes were
primarily aimed at making the provisions more business-friendly by
providing more flexibility to foreign investors and by strengthening
the legal framework of investor rights in the Kingdom, particularly in
relation to property ownership, parity with national companies and
avoidance of double taxation.
more...
Tax on Foreign Firms Slashed
JEDDAH, 29 April 2003 — Saudi businessmen have welcomed yesterday’s
Shoura Council decision to cut taxes on profits of foreign companies
from 45 percent to a maximum of 25 percent, saying the move will boost
foreign investment
more...
New Income Tax Act for non-Saudi and Gulf
Cooperation Council (GCC) companies and individuals
In its weekly
session held on 20/11/1424 (12/1/2004), The Cabinet endorsed a new
income tax law for non-Saudi and Gulf Cooperation Council (GCC)
companies and individuals doing business in the Kingdom. |more|
Additional Resources
and Links
Read The Full
New Investment Law Text
-New
investment opportunities in Saudi Electricity Company
-Saudi Arabia's accumulated financial assets abroad
amount to $ 650 billion |more|
-Foreign investors pump $12.5 billion into Saudi projects
|more|
-Bidding process for 2nd cellular-phone network license
|more|
-Saudi Electricity Co., Posts Profits of SR1.48 Billion
|more|
-Al Waleed expects Citigroup to halve share in SAMBA
|more|
Activities
exempted from the foreign investment Law.
The Kingdom of Saudi Arabia has unveiled new rules and regulations for
the ownership of real estate by foreigners
Shoura Council approves ownership of real estate by non-Saudis
Saudi Arabia Approves New Foreign Investment Law
License Application for a Service Project
License Application for an Industrial
Project
License Application for a Agricultural
Project
 a
Sources:
SAGIA,
SPA, The Commercial office,
Embassy of Saudi Arabia,
Washington, D.C. and compiled by Saudia-Online staff
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