Foreign investment in Saudi Arabia

 By  Advocate Md Halim Bepari  :

King Salman bin Abdul Aziz made a landmark declaration during his visit to USA and announced dramatically changes to economic system. The Saudi Arabian General Investment Authority (SAGIA) has stated that the reform would be subject to conditions, which would be revealed at a later stage.
The declaration employ big change from the previous investment law, the new Foreign Investment Law allows foreigners 100-percent ownership of the projects or company, 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 t are 100 percent foreign-owned will be eligible for loans from the Saudi Industrial Development Fund or bank. 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.
The Kingdom of Saudi Arabia has made in recent years to improve its business environment and develop some of the most liberal foreign investment laws in the region.  Nevertheless, private equity investors have voiced concerns about how these laws are applied in practice.
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.
SAGIA wants to attract more high-end investors into the kingdom of Saudi Arabia to create white collar or technical jobs for Saudi citizens, introduce modern technology and maintain economic growth – goals that may become increasingly important if oil prices stay low.
Gulf Cooperation Council (GCC) countries, there is no general limit on the amount of foreign investment which can be made in a Saudi company and the establishment of 100% foreign-owned companies is permitted, with certain exceptions such as strategically significant sectors including Medical , defence, oil exploration, Communication & media, professional companies and trading companies.
All foreign companies who wish to set up Business in Kingdom of Saudi Arabia are required to obtain a foreign capital investment license from the Saudi Arabian General Investment Authority (SAGIA). SAGIA is obliged to respond to an application within thirty (30) days after issuance of a receipt acknowledging that the application is in the prescribed form. If SAGIA does not do so, the application is deemed to be accepted.
However, SAGIA has considerable discretion in deciding whether or not an application is in order. It is not uncommon for SAGIA to request documents and information in support of the application over and above what is required by the SAGIA application form and the Investment Laws generally. If further information or documents are required by SAGIA, they must be provided within sixty (60) days of the request, otherwise the application lapses.
There are new opportunities for foreign banks to enter the kingdom, as most of the banks already operating there were nearing maximum credit limits imposed by the central bank.
Banking subsectors such as services for individuals and smaller companies would be among areas for new opportunities, the official said, adding that UK and U.S. banks entering the kingdom for business.
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 agency is streamlining its investment rules and visa regulations for investors, new rule would come into force early of next year or as soon as possible.
Recommendation:
1. All of procedure will be online /Electronic system in Arabic and English language
2. Open Economy and free share capital market
3. Company Name search and company Registration/ establishment system will easy way like as UK and USA system.
4. Company registration /establishment fees  like as SR 100
5. Easy way to recruit expert professional employees and skill workers from abroad.
Conclusion:
Kingdom of Saudi Arabia is country with modern global economical system and it is a best place to live, work, Business and entertainment.

Reference:
1. Reporting by Angus McDowall; Editing by Andrew Torchia and Clelia Oziel)
2. Daily news paper
3. USA and UK News report
4. Business Journals

Advocate Md Halim Bepari
bmhalim01@icloud.com