Updated Saudi Arabia Investment Law marks pivotal moment for country’s business climate

The new regulations, which came into effect on 25 April, comprise 37 articles and establish guidelines aimed at providing clarity and boosting transparency while maintaining necessary economic and national security safeguards.

The regulations, which repeal the country’s existing Investment Law, guarantee equal treatment for local and foreign investors in KSA, thereby facilitating an investor-friendly environment for both foreign investors and KSA companies seeking foreign partnerships or investments in the country.

Significantly, the regulations also guarantee investors the freedom to transfer funds into and out of KSA freely, including revenues generated from the liquidation or sale of all or part of an investment and the earnings and salaries of contracted employees abroad who perform work related to these investments.

Commenting on the regulations, KSA-based legal expert Dr. Sairah Narmah-Alqasim of Pinsent Masons said: “The approval of the executive regulations of the new Investment Law in KSA in April 2025 marks a pivotal moment for both foreign investors and local businesses. It mandates equal treatment for local and foreign investors, ensuring a level playing field and introduces enhanced protections for investors, including intellectual property and trade secrets. The new Investment Law simplifies the registration process, replacing the need for a foreign investment license with a new mechanism under the Ministry of Investment. These changes align with KSA’s Vision 2030, aiming to diversify the economy and attract global investment.”

Corporate law expert Ibrahim Alajaji of Pinsent Masons said that a comprehensive understanding of the new regulations would be crucial for foreign investors, government agencies and local businesses looking to understand the investment opportunities and compliance requirements.

“For our clients, this means new opportunities for growth and collaboration,” he said. “Foreign investors can now navigate the KSA market with greater confidence, while local businesses can leverage increased foreign capital to innovate and expand. It is crucial for our clients to stay informed about these regulatory changes and adapt their strategies accordingly to maximise the benefits. Engaging with local legal and financial advisors will be key to ensuring compliance and optimising investment outcomes.”

The new regulations come as foreign investment into the country continues to increase. In January, news website Argaam reported that foreign investments in KSA rose 19% in Q3 2024 compared to the same quarter in 2023, according to data from the Saudi Central Bank.

Commenting on the executive regulations, Sarah Khasawneh of Pinsent Masons said: “The new law also builds on previously announced reforms under KSA’s Vision 2030 and the country’s national investment strategy, which is designed to help streamline processes and improve the country’s investment climate.”