Saudi Arabia’s executive regulation for the new investment law was published by the state official gazette Umm Al Qura last Friday (pdf). The new law — which replaced the old Foreign Investment Law and its executive regulations last year — introduces changes designed to attract more FDI by leveling the playing field between foreign and local investors under a unified set of rules.

Transfer of funds: The new regs allow investors to freely transfer investment-related funds to and from the Kingdom without delay — subject to applicable law. Transfers cover capital, reinvestments, incomes, dividends, royalties, fees, sale proceeds, and worker earnings.

BUT- Transfers may be delayed or restricted under fair, non-discriminatory laws in cases such as bankruptcy, creditor protection, securities activities, criminal matters, or court rulings.

Other important changes: The law abolishes the investment license requirement for foreign investors, introduces a new framework for handling violations — categorizing them as serious or non-serious — and applies a gradation principle to penalties. Penalties now take into account factors such as repeated offenses and the size of the entity, creating a fairer enforcement system. It also strengthens dispute resolution by allowing both local and foreign investors to appeal to relevant courts.

BACKGROUND- The amendments drew on international best practices from other countries, including the US, Turkey, the UAE, Germany, Singapore, and Indonesia. This process was designed to ensure that the updates align the Kingdom’s investment environment with international practices.

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