Brief on the Investment Law 1446H

To enhance our clients’ legal awareness, AT Lawyers & Consultants monitors and studies new laws and regulations issued by the relevant authorities connected to our clients’ activities and provides them with copies, to help them observe the highest levels of legal compliance and avoid future legal issues.

We inform you as follows:

• The new Investment Law has been issued with provisions aligned with the Kingdom’s economic developments consistent with Vision 2030.
• The law was published in the Official Gazette on 7-2-1446H (11-8-2024) and becomes effective after 180 days from publication, i.e., on 11-8-1446H (10-2-2025).
• It repealed the former Foreign Investment Law issued by Royal Decree No. (M/1) dated 5-1-1421H.
• The new law combines local and foreign investors under a single regime and grants them equal competitive treatment in similar circumstances.
• It introduced the concept of "investment incentives," meaning advantages, facilitations, or exemptions granted to encourage investment, to be awarded by the competent investment authority under defined rules.
• A key feature is permitting alternative dispute resolution such as arbitration and mediation, whether with the competent authority or with others, which was not possible under the former law.

The new law clearly sets out investor rights and obligations, reflecting the state’s commitment to a competitive investment environment and economic development. Rights include:

• Equal treatment of local and foreign investors in similar circumstances.
• No confiscation of investment in whole or in part except by a final court judgment.
• No expropriation except for public interest and against fair compensation.
• Freedom to transfer funds within or outside the Kingdom without delay, in any currency recognized by the Saudi Central Bank.
• Protection of intellectual property and confidential business information.
• Streamlined administrative procedures and necessary support from the competent authority.

In return for these rights, investors must:

• Foreign investors must register with the Ministry of Investment before undertaking any investment.
• Seek prior approval from the Ministry before investing in any activity listed as excluded.
• Obtain Ministry approval before any change in ownership of an investment in excluded activities.

Violations are classified into serious and non-serious, with meanings and controls to be detailed in the executive regulations.

Upon committing a non-serious violation, the Ministry notifies the investor to remove it within a specified period.

If removal does not occur or a serious violation is committed, the investor may face one or more of the following:

• Warning.
• A fine not exceeding SAR 300,000 (doubling upon recurrence).
• Cancellation of registration.

The Committee for Investment Law Violations considers violations and imposes penalties, and the investor may appeal before the competent court within 30 days from notification.

We provide full legal support so clients can conduct business and investment with the highest compliance. Our key services:

1. 1.
   First: Legal and advisory services for investors

• Legal assessment and recommending the suitable legal form.
• Incorporating foreign companies and regional headquarters, and registering branches, commercial agencies, and trademarks.
• Issuing operating licenses according to the economic activity.

1. 2.
   Second: Contracts and agreements

• Drafting investor contracts and framework agreements with partners, clients, and suppliers.
• Drafting dispute-resolution clauses using arbitration or mediation and representing clients in legal negotiations.

1. 3.
   Third: Representation

• Representing investors before public and private bodies in negotiations and meetings.
• Litigation before courts and judicial and quasi-judicial committees.
• Studying the litigation posture, planning dispute management, and preparing all required legal documents.

📩 Contact:

[email protected]

📞 0507755229