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FOREIGN INVESTMENT POLICY
The Kingdom of Saudi Arabia realizes that achieving its ambitious economic goals
requires a steady flow of technology and expertise into the country. Therefore, its policy
is to welcome foreign capital and invite it to participate in economic development
projects in cooperation with Saudi business. The government's established policy is not to
impose any restrictions on the movement of capital into and out of the Kingdom and always
to respect private ownership.
In addition, foreign investment that fulfills the requirements of the Foreign Capital
Investment Code enjoys all privileges of national capital and is entitled to the same
treatment, protection, and incentives accorded to national capital. The Code requires that
foreign capital be invested in economic development projects (which, under the Code, do
not include petroleum and mineral projects) and that it be accompanied by technical
knowledge. Development projects are defined by the Ministry of Industry and Electricity.
Provided that the share of national capital is at least 25 percent, industrial or
agricultural projects that fulfill the above requirements enjoy the following benefits:
- An income tax holiday of up to 10 years from the commencement of commercial production.
- Ownership of land according to the regulations governing land ownership by non-Saudis.
- For industrial projects, the same privileges as those enjoyed by Saudi capital under the
National Industries Protection and Encouragement Regulations. These include:
- Exemption from customs duties on machinery, equipment, tools and spare parts imported
for industrial products.
- Exemption from customs duties on primary raw materials, semi-finished goods, containers,
etc., necessary for industrial projects (provided that similar items are not sufficiently
available locally).
- Provision by the government of plots of land at a nominal rate for factories and
residential quarters for workers.
- Low electricity and water rates.
- No restriction on repatriation of profits.
- Preferential treatment for local products in government procurement in addition to
preferential treatment accorded to national products by Arab League and Saudi Arabian
bilateral trade agreements.
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