Saudi Arabia Introduces New Investment Framework to Advance Vision 2030 Goals

published on 5 May 2025 | reading time approx. 3 minutes

Saudi Arabia has recently enacted a comprehensive overhaul of its foreign investment framework with the introduction of a new Investment Law and its accompanying Implementing Regulations (IRs), both of which entered into force in February 2025. This legislative reform reflects the Kingdom’s broader commitment to economic diversification under Vision 2030 and aims to position Saudi Arabia more firmly as a competitive global investment destination. The new legal regime replaces the former Foreign Investment Law and is the product of extensive comparative research, drawing on international benchmarks from jurisdictions including Singapore, the United Arab Emirates, Germany, the United States, Indonesia, and Turkey.

Equal Treatment and Strengthened Investor Rights

At the heart of the reforms lies a reaffirmation of investor protections and a more inclusive approach to foreign and domestic investment. The IRs codify the principle of equal treatment between foreign and Saudi investors operating under similar conditions, subject to considerations of public interest and national security. Additionally, investors are granted robust protections against indirect expropriation and are ensured the free transfer of capital, profits, and other investment-related proceeds.

Other key guarantees include safeguards for intellectual property and trade secrets, as well as a commitment to more transparent and efficient administrative processes. The government is also expected to support investors by providing access to relevant data and information.

A Shift from Licensing to Registration

One of the more notable changes introduced by the new regime is the replacement of the traditional licensing process with a more streamlined registration mechanism. Under this new system, foreign investors must register their investments with the Ministry of Investment (MISA), while domestic investors may register voluntarily. Registration requires the submission of declarations confirming the accuracy of submitted documentation, which must be renewed annually. Although the registration process retains elements of the previous licensing regime, it reflects a shift toward greater procedural efficiency and reduced bureaucratic burden.

Restricted and Prohibited Sectors

The IRs introduce a two-tiered classification for sectors subject to foreign investment limitations: activities that are prohibited outright without special approval, and activities that are restricted but accessible if certain conditions are met. A dedicated interministerial committee will maintain and update a list of such activities, published within MISA’s Investor Guide.

Foreign investors seeking to operate in restricted or prohibited sectors must submit an application through MISA, which will review the request in line with specific regulatory criteria. This structure provides a level of flexibility while maintaining regulatory oversight in sensitive areas.

Compliance and Sanctions Regime

A modernized enforcement framework has also been implemented. It differentiates between minor and serious violations, taking into account the investor’s conduct, business scale, and recurrence of infractions. For non-serious breaches, investors are generally given an opportunity to rectify issues within 30 business days following an official warning. More serious or repeated violations may result in fines of up to SAR 300,000, revocation of registration, or both. The list of sanctionable violations will be maintained and regularly updated by MISA.

Looking Ahead

The new Investment Law and IRs mark a critical step in Saudi Arabia’s transformation into a more investor-friendly jurisdiction. The legal framework not only opens new avenues for international investors, but also reinforces confidence through clearer rules, stronger protections, and a commitment to regulatory consistency.

As the implementation phase progresses, further updates—particularly regarding restricted sectors and incentive schemes—are expected. We will continue to monitor developments closely and provide timely updates.

How We Can Help

Our team advises clients on all aspects of doing business in Saudi Arabia, including market entry strategies, investment structuring, regulatory compliance, and government relations. Should you require guidance on navigating the new investment framework or wish to explore opportunities in the Kingdom, please do not hesitate to contact us.