DIRECTORATE OF INDUSTRIAL INFORMATION

INVESTMENT LAWS AND REGULATIONS

SEPTEMBER 2000

TABLE OF CONTENTS

1.Foreign Investment Act                                                                

2.Regulation of the Foreign Investment Act                                   

3.Law of General Investment Authority                                          

4.Regulation of the Order of The General Investment Authority    

THE FOREIGN INVESTMENT ACT

ARTICLE 1:

The following expressions and terms shall have the meaning ascribed beside each, unless the context deems otherwise:

ARTICLE 2:

Without prejudice to the requirements of regulations and agreements, the Authority shall issue a license for a Foreign Capital Investment in any investment activity in the Kingdom, whether permanent or temporary.

The Authority shall make a decision about the investment application within thirty days after the completion of documents provided for in the  Rules.  In the event that the specified period elapsed without the Authority rendering a decision about the application it shall be obligated to issue the required license for the investor.

If the Authority shall deny the said application within the specified period, then the pertinent decision of denial shall be justified, and the party against whom the decision of denial had been issued shall have the right to contest such decision according to regulations.

ARTICLE 3:

The Council shall have the authority to issue a list of activities excluded from Foreign Investment

ARTICLE 4:

Subject to Article 2, the Foreign Investor may obtain more than one license in different activities, and the Rules shall specify the necessary measures.

ARTICLE 5:

Foreign Investments licensed under the provisions of this Act, may be in either of the following forms:

1.                  Facilities owned by a national and a Foreign Investor.

2.                  Facilities wholly owned by a Foreign Investor.

The legal form of the Facility shall be determined according to regulations and directives.

ARTICLE 6:

A project licensed under this Act shall enjoy all the benefits, incentives and guarantees enjoyed by a national project according to regulations and directives.

ARTICLE 7:

The Foreign Investor shall have the right to reallocate his share as derived from the selling of his equity, or from the liquidation surplus or profits generated by the facility, out of the Kingdom or to use by any other legal means, and he shall also be entitled to transfer the required amounts to settle any contractual obligations pertaining to the  project.

ARTICLE 8:

The foreign facility licensed under this Act shall be entitled to possess the required real estates as might be reasonable for practicing the licensed activity or for the housing of all or some of the staff as per the provisions for non-Saudi nationals real estate acquisition.

ARTICLE 9:

The Foreign Investor and his non-Saudi staff shall be sponsored by the licensed facility.

 ARTICLE 10:

The Authority shall provide all those interested in investment with all necessary information, clarifications and statistics, together with all services and procedures to facilitate and accomplish all matters pertaining to the investments.

ARTICLE 11:

Investments related to the foreign investor shall not be confiscated wholly or partially without a court order, moreover, it may not be subject to expropriation wholly or partially except for public interest against an equitable compensation according to Regulations and Directives.

ARTICLE 12:

1.                  The Authority shall inform the Foreign Investor in writing when violating the

Provisions of this Act and its Rules in order that such violation be rectified

            within a period of time determined appropriate by the Authority for rectifying

            such violation.

2.                  Without prejudice to any greater penalty, the Foreign Investor under the

            existence of the violation shall be subject to any of the following penalties:   

1.  Withhold all or part of the incentives and benefits allocated for the Foreign Investor.

2. Imposition of a financial fine not exceeding SR. 500,000 (Five hundred thousand Saudi Riyals).

3. Cancellation of the Foreign Investment license.

3.                  The imposition of the penalties referred to in paragraph (2) herein above, is rendered by a resolution by the Board of Directors.

4.                  A petition against the penalizing resolution may be brought before the Board of Grievances according to its regulations.    

ARTICLE 13:

Without prejudice to the Agreements in which the Kingdom of Saudi Arabia shall be a party of:

1.                  Disputes arising between the Government and the Foreign Investor relating to his licensed investments under this Act shall as far as possible be settled amicably, and if this shall prove to be impossible, then the dispute shall be settled according to regulations.

2.                  The disputes arising between the Foreign Investor and his Saudi partners relating to his licensed investments under this Act shall as far as possible be settled amicably, and if this shall prove to be impossible, then the dispute shall be settled according to regulations.

ARTICLE 14:

All Foreign Investments licensed under this Act shall be treated in accordance with the Tax codes valid in Saudi Arabia and its amendments.

ARTICLE 15:

The Foreign Investor undertakes go abide by all regulations, rules and directives valid in Saudi Arabia together with international agreements in which it is a part thereof.

ARTICLE 16:

The implementation of this Act shall not prejudice the vested interests of Foreign Investments that legally existed before this Act shall come into force, however, these projects in conducting their activity or increasing their capital shall be subject to its provisions.

ARTICLE 17:

The Authority shall issue the Rules, which shall be published in the Official Journal, and shall be effective as of the date of its publishing.

ARTICLE 18:

This Act shall be published in the Office Journal, and shall be effective thirty days after its publishing, and shall invalidate the Foreign Capital Investment Act issued by the Royal Decree no. (M/4), dated 2/2/1399 (H) together with any contradicting provisions.

REGULATION OF THE FOREIGN INVESTMENT ACT

FIRST:   DEFINITIONS

ARTICLE 1:

For the purpose of implementing this Regulation, the following expressions and terms shall have the meaning ascribed beside each, unless the context deems otherwise:

Ownership of the Foreign

SECOND:   AREAS FOR INVE STMENT           

ARTICLE 2:

The Authority shall have the power to license investment of any foreign capital in the Kingdom whether permanent or provisional and in all investment activities except the activities excluded under Article 3 of the Act or that the power to license is assigned to an organization other than the Authority itself.

ARTICLE 3:

The Board of Directors shall suggest a list of the activities excluded from foreign investment and shall submit the same to the Council pursuant to Article 3 of the Act.  The Board of Directors shall from time to time update and suggest amendments to the list, which shall be published in the Official Gazette after the Council’s approval.

THIRD:   PRIVILEGES, INCENTIVES AND GUARANTEES

ARTICLE 4:

The foreign investment projects shall enjoy the privileges, incentives and guarantees enjoyed by national projects in accordance to laws valid in the Kingdom that include freedom of flow of funds to the Kingdom and outside, recognition of private ownership, and that the investments shall be not confiscated without a court judgment or subjected to expropriation except for public interest against an equitable compensation, obtaining loans and customs duties exemptions.  In addition to that, the said projects shall have the right to own land required to perform the licensed activity or for housing staff in accordance to the rules of Real Estate Acquisition for non-Saudi Act.  The projects are also entitled to recruit and sponsor the foreign investor and his non- Saudi staff.

FOURTH:  CONDITIONS AND CRITERIA FOR LICENSING

ARTICLE 5:

The conditions for granting a foreign investment license by the Authority shall include the following:

1. The investment activity requested for licensing should not fall under the list of activities excluded from foreign investment and it should be among those within Authority’s power to license.

2. Product standards and production processes should be approved by the Kingdom laws, or in case such laws do not exist, the laws of the European Union or the laws of the United States of America.

3. The amount of the capital invested should not be less that twenty five million Saudi Riyals with respect to agricultural projects, and five million Saudi Riyals for industrial projects and two million Saudi Riyals for other projects.

4. The foreign investor must not have been found guilty of violating this Act, the previous Acts or any such Acts relating to investment.

5. The Investor must not have been previously convicted for financial or commercial violations whether in the Kingdom or in other countries as he must submit an affidavit in this respect together with his investment application.

6. A grant of license shall not result in breaching any international or regional agreements endorsed by the Kingdom.

ARTICLE 6:

The investor may obtain a license for more than one project in different activities upon the following conditions:

1. The conditions set forth under Article 5 of this Regulation must be satisfied.

2. The investor, when submitting a new request, must not own or be a partner in a  project proven by the Authority to be in default or delay of operation for reasons due to the investor.

3. The investor should not have committed a major violation to the rules of the Act and its Regulation.

ARTICLE 7:

The investor may purchase local or foreign investment entities or the share thereof provided that he should satisfy the conditions set forth under Article 5 & 6 of this Regulation.

FIFTH:            LICENSE PROCEDURES

ARTICLE 8:

The Authority shall prepare an investment guidebook containing a description of licensing procedures, forms, and documents required for granting a license.  The guidebook shall also include the necessary information for investors, including the applicable laws and regulations governing the investment, incentives, privileges and guarantees the investor may enjoy so as to ensure  awareness of the investment climate in the Kingdom before submitting a license application.  The guidebook shall contain in addition to the privileges, incentives and guarantees provided for in Article 4 of this Regulation, adequate disclosure of the following information e.g.:

1.                  Foreign Investment Act, its Regulations and supplement decisions.

2.                  Support of National Industries Act.

3.                  Zakat Laws, taxation, customs, customs exemption and condition thereof.

4.                  Labor and Social Insurance Act and other directives related to labor employment.

5.                  The Company Act and Commercial Registry Act.

This guidebook shall also contain information about the social custom prevailing in the Kingdom and residence laws.  This guidebook shall be updated regularly.

ARTICLE 9:

The application for Foreign Capital Investment shall be submitted to the Application Reception Unit at the Center on the provided form after satisfying all required information and documentation, as indicated within, and duly signed by the applicant or his authorized agent.  The form should at least contain the following particulars:

1.            The information about the applicant, his title, the shareholder in the project and their references.

2.            The information about the project intended to be established.

3.            A detailed statement of the capital intended to be invested in the project.

4.            The permanent address of the Saudi and foreign partners:  State, City, P.O. Box, Phone and Fax numbers, E-mail address, if any.

5.            Contact person, when need to contact arises, during the review process of information and documents.

The said form shall also contain an acknowledgement by the investor stating that he had reviewed the Investment Act and this Regulation and that he shall abide by the rules stated therein,

The required documents shall consists of the following:

1.         (a)            Companies, corporations and similar institutions:

Resolution by the Proprietors, the Board of Directors or the Chief Executive for Investment provided that the said Resolution includes the name of the partner or other partners, if any; a certified copy from the professional license and commercial registry for Saudi companies and corporations, or similar documents for the foreign companies and corporations; an authorization for the person assigned to complete the licensing procedures that indicates his name and identity. 

(b)               Individuals

Copy of the investors’ passport for foreign investors and identity card for Saudi nationals.  In case of authorization, the power of attorney should state the name and identity of the agent and the name of the partner or other partners, if any.

2.         A time schedule indicating the phases of execution by the investor after obtaining   the license.

The Authority shall announce in due time any documents or particulars that it deems necessary in the future.

The investor or his agent shall be responsible for the information and statements submitted, and the Authority may revoke the project license if it becomes evident that the investor concealed material information that if disclosed the license would have been denied and the investor shall assume the consequences of this conduct.

ARTICLE 10 :

After depositing the documents, the Center shall provide the applicant with a preliminary delivery receipt that shows application number and date.  The Center shall examine these documents within five working days from the date of deposit to ensure that the said documents comply the licensing requirements.  The Center shall contact the applicant through the contact channel provided in the application, and the investor should immediately answer the Center with regards to any inquiry or request.

After completion of review, the investor shall be given a final receipt indicating that the required documents under this Regulation are deposited, stating the date, hour, day, month and year.  This given date shall be considered as the initiating date for the official period required for deciding on the license request.

The Center shall prepare a distinct record to log license requests immediately upon receipt and shall create a file for each request with a specific file number.

ARTICLE 11:

The Center shall, within fifteen days - apart from national holidays –from the date of completion of the required documents, examine the documents submitted by the investor and consider the criteria and conditions set forth under Articles 5 and 6 of this Regulation.  Applications together with a recommendation of an approval or denial are then submitted to the Governor or his authorized delegate for finalization.

ARTICLE 12:

The Authority may accept documentation pertaining to requests specified under Article 9, or copies thereof, through mail or other communication means and shall examine these documents pursuant to Articles 10 and 11, however a decision to license shall be made only after receiving and examining the original documents.

ARTICLE 13:

Decisions on submitted requests shall be made in accordance to the rules specified in this Regulation and resolutions by the Board of Directors.  The Governor, or his assigned delegate, shall sign the license decisions within thirty days – apart from national holidays – from the date of the completion of the required documents.

ARTICLE 14:

The Center shall notify the investor, either by direct delivery or by registered mail, on the final decisions issued with respect to his application.  The Authority shall provide the investor with the facilities and information available to assist in completing the procedures and the steps required to be taken after the grant of license.  The Authority should state its reasons for denial when a request is rejected.

ARTICLE 15:

A decision to amend a license shall be made by the Governor upon a request by the project owners and a recommendation by the Center, provided that such amendment falls within the licensed activity.  However, amendments involving a change of activity shall be treated as a new license request.

ARTICLE 16:

The foreign investor whose request is denied, despite an appeal to the Board of Directors, shall have the right to contest the denial decision before the Grievance Board.

SIXTH:   OBLIGATIONS OF THE INVESTOR

ARTICLE 17:

The licensed investor shall commence the process and execute the steps required for executing the project in accordance to the applicable laws in the Kingdom and subject to the time schedule the investor submits together with the license request to the Authority.  The Authority may, if the investor shows reasonable cause that prevents taking steps to execute the project according to the timetable, extend the period specified in the schedule for periods that shall not exceed one year in total.  The said extension should not be extended beyond a year unless a decision to that effect is made by the Board of Directors.  However, if the investor is found frivolous after the extension the Board of Directors may then cancel the license.  The investor whose license is cancelled under this Article shall bear the consequences of cancellation.

ARTICLE 18:

Licensed projects must abide by the conditions and the basic objectives contained in the investment request submitted by the owners and upon which they obtained the license.  No modification shall be made on these projects unless approved by the Authority.

ARTICLE 19:

Owners of  the licensed projects shall adhere to the laws applicable in the Kingdom and shall adopt an approved accountancy system for their projects, and upon the Authority’s demand shall provide the Authority with statistics or information in respect to their projects.

SEVENTH:   VIOLATIONS

ARTICLE 20:

Authority officials, assigned by written authorization by the Governor or his delegate, shall have the right to monitor implementation of the provisions of the Act and its Regulation.  For this purpose they have the right to examine records, and all the documents relating to its activity and shall check for violations and submit necessary reports to the Governor.  The assigned officials shall maintain the confidentiality of information and documents they examine.

ARTICLE 21:

The Authority shall notify the foreign investor in writing of violation of the provisions of the Act, its Regulation or license conditions and will allow a suitable period of time to remove the violation.  If he fails to remove the violation he shall be subject to any of the sanctions provided for in Article 12 of the Act.

ARTICLE 22:

The Board of Directors shall form a committee consisting of at least three members, one of them shall be a legal counselor, and shall make the rules and procedures required for performing its task.  The duty of the said committee shall be to review violations and to hear the parties accused of these violations, consider their defenses and suggest suitable penalties.  The Board of Directors shall render the penalty decision.

ARTICLE 23:

The Center shall notify the owner of the project in violation about the decision of the Authority regarding the violation by registered mail, thus the date of the signed receipt or refusal to accept the registered mail shall be considered the date the decision was notified.  The project in violation, which the Board of Directors denies its petition against the penalty decision, may appeal that decision before the Grievance Board.

EIGHTH:   DISPUTE SETTLEMENT COMMITTEE  

ARTICLE 24:

The Authority shall establish a Committee identified as the Dispute Settlement Committee consisting of at least three members, one of them a legal counselor.  The Committee shall act to reach amicable settlements for disputes that arise between parties referred to under Article 13 of the Act.  The Board of Directors shall specify the required procedures for performing the task of this Committee.

LAW OF THE GENERAL INVESTMENT AUTHORITY

ARTICLE 1:

 

The following expressions and terms shall have the meaning ascribed beside each, unless the context deems otherwise: 

The Council:                             The Supreme Economic Council

 

The President:                           The President of the Supreme Economic Council

 

The Board of Directors:             The Board of Directors of the General Investment

                                                   Authority

 

The Authority:                           The Authority                           The General Investment Authority

 

The Governor:                          The Governor of the General Investment Authority

 

The Rules:                                The Rules of Implementation of this Order

 

ARTICLE 3:

The main objective of the Authority is to oversee investment affairs in the Kingdom including foreign investment. This includes, without limitation to its powers, the following functions:

 

1.   Preparation of state policies in the field of developing and enhancing local and

      foreign investment, and its submission to the Council.

2.   Proposing executing schemes and criteria that shall improve the investment climate in the

      Kingdom and its submission to the Council.

3.   Monitoring and evaluating the performance of local and foreign investment, and drafting

      a periodical report in this regard, the report’s items are determined by the Rules.

4.   Conducting studies about investment opportunities in the Kingdom and promoting them.

5.   Coordinating and cooperating with pertinent governmental bodies to enable the Authority to   

      accomplish its mission.

6.   Organizing conferences, symposiums, local and international exhibitions and workshops

       relevant to investment and the formation and participation in it.

7.   Developing databases and carrying out statistical surveys required for the conduct of its

      functions.

8.   Any tasks officially assigned to the Authority.

ARTICLE 4

The Board of Directors of the Authority shall be formed as follows:

1.         The Governor                                                                                    Chairman

2.         A Representative from the Ministry Interior                                         Member

3.         A Representative from the Ministry of Foreign Affairs                          Member

4.         A Representative from the Ministry of Commerce                                Member

5.         A Representative from the Ministry of Agriculture & Water                  Member

6.         A Representative from the Ministry of Petroleum & Mineral                  Member

            Resources

7.         A Representative from Ministry of Industry & Electricity                       Member

8.         A Representative from the Ministry of Finance & National                    Member

            Economy

9.         A Representative from the Ministry of Planning                                     Member

10.       A Representative from the Ministry of Labor and Social                       Member

            Affairs

11.       A Representative from the Saudi Arabian Monetary Agency                Member

Two members of the private sector are appointed by a decision by the Chairman upon a nomination by the Governor.

Representatives of government bodies in the Board of Directors shall not be less in rank than the fourteenth.  Membership tenure in the Board of Directors shall only be for three years.

ARTICLE 5

The Board of Directors is the governing power over the Authority’s affairs, the conduct of its business, and renders all relevant decisions necessary for realizing its objectives within the provisions of this Order.  It shall be specifically charged with the following:

1.                   Deciding on investment applications and their termination.

2.                   Proposing a list of types of activities excluded from foreign investment and submitting it to the Council.  

3.                   Approval of by-laws, financial and administrative rules and the organizational structure of the Authority, which will ensure the systematic progress of its works.

4.                   Supervision and revision of the administrative and financial management of the Authority.

5.                  Approval of the Authority’s budget plan and its final statement of account, the report of the comptroller and the annual report, in preparation for its submission according to regulations.

6.                  Forming committees by members of the Board of Directors and others to perform the duties assigned to the Authority as may be decided by the Board of Directors.

7.                  To examine the matters referred to it by the Governor and the committees formed by the Board of Directors.

8.                  Proposing the amendment of this Order and other regulations pertaining to investment.

9.                  Delegating officials of the Authority to sign the various agreements and contracts within the limits determined by the Board of Directors.

10.              Endorsing the Authority’s work plan and its operational scheme.

11.              Accepting donations, endowments, grants and aids.

ARTICLE 6

The Board of Directors shall hold its meetings upon an invitation by the Governor at least once each month.  The Governor shall invite the Board of Directors when requested by at least half the members. The invitation shall include an agenda.  A valid quorum requires the presence of the majority of members including the Chairman of the Board of Directors or a member including the Chairman of the Board of Directors or a member representing him; resolutions are issued by a majority of present votes.  Whenever the votes are equally divided, the casting vote shall be that of the Chairman.  The Board of Directors has the right to invite to its meetings those whom it deems to benefit from their knowledge and experiences without having the right to vote.  Proceeding and resolutions of the Board of Directors shall be entered in minutes signed by the Chairman and present members.

The Board of Directors shall not have the right to issue resolutions by independent submissions to members except when necessary, provided, in such case, a  written unanimous consent members of the Board of Directors for the resolution is obtained. The resolution shall be presented to the Board of Directors in its first subsequent meeting to be entered in the minutes of the meeting.

ARTICLE 7

The Authority shall have a Governor in the rank of a minister appointed by a royal decree upon the Chairman’s nomination.

ARTICLE 8

The Governor shall be the executive officer responsible for managing the Authority and conducting its business.  His responsibilities are primarily within the context of this Order and those decided by the Board of Directors.  He is vested with the following powers:

1. Overseeing preparations for the Board of Directors’ meetings.

2. Monitoring the implementation of the Board of Directors; resolutions.

3. Drafting the Authority’s plan, the final statement of account and the annual report in preparation of its submission before the Board of Directors.

4. Supervising the Authority’s employees, staff and workers according to his vested powers and rules.

5. Issuing orders on the Authority’s expenditures according to the approved annual budget.

6. Submitting periodical reports to the Board of Directors concerning the business of the Authority, its achievements and activities.

7. Proposing the Authority’s strategies and programs and supervising of its discharge after being approved by the Board of Directors.

8. Representing the Authority before other government bodies and others.

The Governor has the right to delegate some of these powers to other officials of the Authority.

ARTICLE 9

1.  A Comprehensive Service Center shall be established at the Authority, consisting of liaison offices including full-time representatives for all government departments with relation to investment, i.e. the Ministries of Interior (The General Directorate of Passports, The General Administration for Recruitment), Foreign Affairs, Commerce, Industry and Electricity, Finance and National Economy (Zakat and Income Department, Saudi Industrial Development Fund), Agriculture and Water, Labor and Social Affairs (Labor & Laborer’s Office), Petroleum and Mineral Resources.  The Board shall the right to amend the parties mentioned in this Order upon a proposal from the Board of Directors.

2. The above mentioned Comprehensive Service Center shall operate under the supervision of the Governor.  It shall extend its services to investors in a manner that ensures consolidating the locale for application reception and processing, prompt finalization of the affairs and issuance of licenses, approvals, visas and residence permits required for practicing the activity.

ARTICLE 10

The Authority shall have an independent budget issued in accordance with the issuance of the general state budget and the Authority’s funds shall consist of the following:

1.         The allotted appropriations in the state budget.

2.         Income derived by the Authority from conducting an activity that falls within its objectives.

3.         Any other funds which the Board of Directors may accept, i.e. donations,

endowments, grants and aids.

4.         All movables and immovable properties passed to it from the Saudi Consulting             Services House.

The Authority’s funds shall be deposited in an independent account and discharged in accordance with the Authority’s financial regulations.

ARTICLE 11

The fiscal year of the Authority is as the state fiscal year, save for the first fiscal year of the Authority which shall start as of the date this Order come into effect.

ARTICLE 12

Without prejudice to the right of the Comptroller General in monitoring the Authority’s accounts, the Board of Directors shall appoint one or more comptrollers either being natural or body corporate licensed to work in the Kingdom and shall determine their fees.  Should there be more than one comptroller then they shall be jointly liable for their activities before the Authority.  The comptroller’s report shall be addressed to the Board of Directors with a copy to the Board of the Comptroller General.

ARTICLE 13

The Board of Directors shall issue the Rules within thirty days as from the date this Order is issued.  It shall be published in the Office Journal and shall be effective as of the dated of its publishing.

ARTICLE 14

This Order shall be published in the Official Journal and shall be effective thirty days after its publishing and shall invalidate any contradicting provisions.

REGULATION OF THE ORDER OF

THE GENERAL INVESTMENT AUTHORITY

FIRST:            DEFINITIONS

Article 1

For the purpose of implementing this Regulation, the following expressions and terms shall have the meaning ascribed beside each, unless the context deems otherwise:

The President:                      The President of the Supreme Economic Council

The Council:                          The Supreme Economic Council

The Board of Directors:        The Board of Directors of the General Investment Authority

The Chairman of the              The Chairman of the Board of Directors of the General

Board of Directors:                 Investment Authority

The Governor:                         The Governor of the General Investment Authority

The Authority:                         The General Investment Authority

The Order:                                The Order of the General Investment Authority

The Regulation:                         The Regulation for Implementation of the Order of

                                                    the General Investment Authority

The Center:                                The Comprehensive Service Center provided for in Article

                                                    (9) of the Order of the Authority

SECOND:            AUTHORITY’S MAIN OFFICE

ARTICLE 2

The Authority shall be situated in Riyadh, and the Board of Directors may establish branches and offices of the Authority within and outside the Kingdom.

THIRD:            OBJECTIVES OF THE AUTHORITY

ARTICLE 3

The Authority shall oversee investment affairs in the Kingdom and shall prepare state policies in the field of developing and enhancing local and foreign investment and to submit the same to the Council.  The said policies shall include, but are not limited to, the following elements:

1.                  Increase of national income and diversification of its sources.

2.                  Transfer of settlement of technology.

3.                  Developing exportation.

4.                  Development of national resources which shall include creating employment opportunities of high economical and experimental yield for citizens.

5.                  Support of competition, improvement of services and products and diversification of alternatives for the consumers.

6.                  Integration of investment in the Kingdom.

7.                  Utilization of the relative advantages the Kingdom enjoys and each region on its own.

8.                  Establishing the strategic aspect of investment and its priorities.

9.                  Consideration for environment preservation in investment projects.

ARTICLE 4

The Authority shall propose executive plans and rules capable of forming the investment climate in the Kingdom, some of these areas are the following:

1.                  Incentives which foster the development of local investment and attracts foreign investment, both being directed in conformity with state  policies and plans, and to ensure their ability to compete accordingly with other countries.

2.                  The course of technical education and training in conformity with the plans and requirements of investment development.

3.                  Conditions for granting concessions for projects and companies.

4.                  State investment in projects and privatization programs.

5.                  International conventions and laws related to investment.

6.                  Finance programs.

7.                  Custom exemptions and tax incentives capable of attracting and settling investment.

ARTICLE 5

The Authority shall monitor the performance of the investment activity and assess its ability to meet the target.  It shall prepare regular reports in this regard and submit the same to the Council which shall include the following elements:

1.                  Investment indicators.

2.                  Growth of national product and per capita income.

3.                  Increase in employment opportunities and the assimilation of Saudis within.

4.                  Transfer and settlement of technology.

5.                  Investment impediments.

6.                  The extent and cause of local and foreign capital participation in, or retreat from, investment in the Kingdom.

7.                  Proposals for improving the climate for investment in the Kingdom including proposals to amend pertinent laws.

To realize these objectives, the Authority may request the necessary information and statistical data from investment projects and owners of these projects are to answer the request.

ARTICLE 6

The Authority shall prepare studies on investment opportunities in the various economic sectors of the Kingdom consistent with the public policies of the state, investment priorities, development plans and objectives and shall promote these opportunities through:

1.                  Direct contact channels with investor through the Authority and its branches in the Kingdom and representatives offices abroad in cooperation with Saudi Industrial Chambers of Commerce and Saudi Consulates abroad.

2.                  Organizing conferences, symposiums, exhibitions and participation in those organized by others.

3.                  Organizing lectures inside the Kingdom and abroad to introduce the Kingdom’s policy towards investment, governing laws and available incentives and facilities.

4.                  Issuing information pamphlets and booklets in different suitable languages and publishing these through the various means of media.

5.                  Inviting delegations of investors and relevant regional and foreign institutions to visit the Kingdom and have immediate knowledge about investment opportunities.

6.         Creating channels for cooperation with international, regional and local organizations and institutions specialized in the area of investment.

7.         Encouraging the establishment of joint-venture projects between Saudi investors and their foreign counterparts.

8.            Advertising the Authority’s activities and the available investment opportunities in the Kingdom through the various communication means especially those concerned with investment affairs.

ARTICLE 7

The Authority shall undertake to develop a multiple investment database that relies on the statistical surveys conducted by the Authority or the information received from related bodies and to connect the same to local, regional and international databases specialized in investment affairs.  These databases must cover all information, statistics and indicators available which the Authority needs in the preparation of policies, plans and the assessment of performances, or that which investors need in feasibility studies or use of their projects.  The Authority shall apply the advance means of the information technology.

ARTICLE 8

The Authority shall coordinate and act with the relevant government or private entities concerned and related international and regional organizations in order to enable the Authority to carry out its duties through the following:

1.                  Comprehensive Service Center.

2.                  Permanent or ad hoc Committees formed from time to time between the Authority and government and private entities.

3.          Participation in related international organizations and institutions.

FOURTH:            THE BOARD OF DIRECTORS

ARTICLE 9

The Board of Directors shall formulate the policies and rules governing the Authority’s operations and shall oversee its implementation.  It shall approve the plans and executive programs of the Authority and shall monitor its performance.  The Board of Directors shall also determine the conditions to issue, amend and revoke local and foreign capital investment licenses and the necessary time period to issue licenses and shall determine the fees to be collected by the Authority for its services.

ARTICLE 10

The Governor may call the Board of Directors to convene and shall preside over its meetings and may deputize any of its members to preside.  The meetings shall be convened at the Authority’s main office in Riyadh.  The Governor may call for a meeting to be convened at another venue, if necessary.

ARTICLE 11

The Board of Directors shall propose a list of types of activities excluded from foreign investment prior to its submission to the Council.  The Board of Directors may suggest an update to this list as required by circumstances.

ARTICLE 12

The Board of Directors shall upon the Governor’s proposals and within six months from the promulgation of this Regulation approve the following:

1.                  Organizational structure of the Authority’s units and main executives offices indicating its powers and duties in conformity with the nature of the Authority’s task and enabling it to carry out its duties as specified in the Order and this Regulation.

2.         Financial and administrative regulations in conformity with the nature of the Authority’s task.  These regulations should include the financial and administrative powers conferred on the various administrative levels of the Authority.

3.          Regulation for the Authority’s personnel in accordance to the Authority’s order and stipulating the rules relevant to their appointment, promotion, allowances and bonuses and any other rules relating thereto.

ARTICLE 13

The Board of Directors shall have a secretary appointed by the Governor’s order, who shall arrange its tasks, schedules of meetings and shall enter the minutes of the meetings and decisions in regular records.  The said secretary shall send notice of meetings to the members at least two weeks prior to the date of meeting and shall send the meeting agenda and memos to the members one week prior to the meeting . The minutes of the meetings of the Board of Directors shall be duly signed by the Chairman, the members, and the secretary. The Board of Directors’ deliberations are confidential and shall not be disclosed unless the chairman otherwise permits.

FIFTH:            THE GOVERNOR

ARTICLE 14

The Governor reports to the President of the Council and shall exercise his duties as an executive responsible for the administration of the Authority as set forth in the Order and this Regulation and as assigned by the Board of Directors and shall be responsible for the execution of the Authority’s policies, the administration of its operations and the running of its affairs including the issuance of investment licenses in accordance to Article 9 of this Regulation, provided that rejection decisions shall be made by the Board of Directors.

ARTICLE 15

The Governor or any one he deputizes shall represent the Authority before any parties and shall act to coordinate its works with the concerned governmental bodies and shall sign the contracts and agreements on behalf of the Authority according to the rules determined by the Board of Directors.

ARTICLE 16

The Governor shall propose activity plans for the Authority, make the required programs for its execution and monitors the execution therein after assuring the availability of the necessary financial and human resources and shall submit to the Board of Directors, the regular reports the performance of the Authority.

ARTICLE 17

The Governor shall oversee preparations for meetings of the Board of Directors, which shall include calling for the Board to convene, determining the articles of the agenda according to priorities and suggestions by members of the Board of Directors or that received by the administrative organ of the Authority and shall monitor execution of issued resolutions.

ARTICLE 18

The Governor or his deputy shall supervise the application process for an investment license as to assure promptness of action and shall review the investors’ grievances concerning their application or other decisions by the Authority relating to investment affairs and shall submit the same to the Board of Directors.

SIXTH:            ADMINISTRATIVE ORGAN OF THE AUTHORITY

ARTICLE 19

The administrative organ of the Authority shall be appointed according to the organizational structure and the administrative powers approved by the Board of Directors.  The said organ shall have sufficient personnel of adequate experiences to perform the tasks assigned to the

Authority.  The Authority may seek the assistance of outside experts to perform these tasks through limited contracts.

SEVENTH:            COMPREHENSIVE SERVICE CENTER

ARTICLE 20

The Comprehensive Service Center shall undertake the following:

1.                  Receive applications for investment projects licenses and verify the completion of documentation.

2.                  Evaluate and verify license applications and eligibility and render recommendations of approval or rejection of application.

3.         To serve investors and facilitate their requests with respect to procedures and steps necessary to execute the project.  Complete and follow-up on applications for services needed in coordination with represented governmental bodies.

ARTICLE 21

The Governor, in coordination with the concerned government circles as provided for in Article (9) of the Order of the General Investment Authority, shall issue a decision specifying the method for selecting representatives of these governmental circles for the Center, specifying their duties and how they shall be carried out through the Center,  coordinating their relation with the Center and determining their reference in such a way that shall guarantee the realization of the objectives set forth.

ARTICLE 22

Representatives of the authorities concerned with investment shall facilitate  the task of the Center in examining documents by providing information from the authorities they represent and shall act to assist investors and their requirements for information, issuance of licenses, approval, visas, and permissions that investors may need.