Saudi Arabia's New Investment Law: What Changed?

Saudi Arabia's new Investment Law replaced licensing with registration, and the Ministry of Investment notifies the investor of registration, for activities open to investment, within no more than 10 working days of meeting all requirements, according to the law's Implementing Regulations. The law was issued by Royal Decree No. (M/19) dated 16/1/1446H and replaced the Foreign Investment Law issued by Decree (M/1) dated 5/1/1421H. It applies to local and foreign investors alike.

What changed in the new Investment Law?

Of the eight principles in the Ministry of Investment's executive summary, four bear on the change:

• A registration mechanism in place of licensing procedures.
• The possibility of granting incentives under announced objective criteria.
• Alternative dispute resolution routes: arbitration, mediation and conciliation.
• Application of the law to local and foreign investors together.

In our reading the default has become registration followed by notice from the Ministry, and what the text provides is that applications in excluded activities are the ones referred to the Examination Committee. Registration may be cancelled in the event of a breach.

What guarantees does the law provide?

According to the text of the law on the Ministry's website, and subject to the related laws and the exceptions the law and its Regulations set, the investor is guaranteed equal treatment in similar circumstances, no confiscation except by a final court judgment, no expropriation except for the public interest and against fair compensation, the right to transfer funds into and out of the Kingdom without delay, and protection of intellectual property and trade secrets.

Must a foreign investor register before investing?

Yes. The law requires a foreign investor to register with the Ministry before undertaking any investment, except investment in securities governed by the Capital Market Law. The law provides this exemption.

How long do the procedures take?

The Implementing Regulations provide the following:

• The Ministry notifies the applicant of registration, for activities open to investment, within no more than 10 working days of meeting all requirements.
• If an application is incomplete, the investor has at least 15 working days to complete it, failing which the application is treated as cancelled.
• Registration has an annual update whose outcome the Ministry notifies within 5 working days.
• Applications to invest in excluded activities are referred to the Examination Committee, and the Ministry notifies the investor of the Committee's decision within 5 working days of receiving it. The Regulations set no period for the Committee's own decision.

When did the law take effect?

The law takes effect 180 days after publication in the Official Gazette. The US Department of State reports that it came into force in February 2025 and that its implementing regulations were published in April 2025. The law's page on the Umm Al-Qura Gazette website carries the date 11 August 2024 without the issue number; adding 180 days gives about 7 February 2025 (Zeej calculation), consistent with the US Department of State. The exact effective date is fixed by the Gazette issue itself.

What is the penalty for a breach?

The fine for a serious breach of the registration provisions or the excluded activities reaches SAR 300,000, which may be doubled on repetition, and registration may be cancelled.

Which minimums apply today?

Minimums for certain routes apply today, including, for a commercial activity with full foreign ownership, capital of SAR 30 million and a commitment to invest SAR 300 million over five years that includes SAR 30 million in cash (or SAR 200 million with conditions), according to the Investor Guide. On the OECD FDI Regulatory Restrictiveness Index, which describes the rules in force on 31 December 2024, before the updated law took effect, Saudi Arabia ranks 8th among 104 economies by the order of Figure 1.1, from the most restrictive. The index therefore does not measure the effect of the new law.

What do we not know yet?

We did not find in the open official Saudi sources a figure for the time needed to obtain a foreign investment licence before the law, so the difference cannot be measured in days. The US Department of State, describing general reforms, says the investor licence approval period fell from days to hours, without tying that to the 2024 law; it is not an official Saudi figure. What can be said is that the law provides for registration and notice. We found no published data yet showing the law's effect on foreign-ownership minimums or flow volumes; our full study, "How to Invest in Saudi Arabia: New Law and Capital Flows", examines this when it is published at the end of this month.

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