Saudi Arabia: New Law to Protect Interests of Foreign Investors

[FaGal]

Saudi Arabia: New Law to Protect Interests of Foreign Investors
www.zawya.com - April 2, 2005


JEDDAH - A new investment law, which removes the obstacles facing investors and complies with WTO regulations, will be unveiled shortly, according to Amr Al-Dabbagh, governor of Saudi Arabian General Investment Authority (SAGIA).

"The new regulations realize the dual goal of protecting national interests and conforming to the conditions of World Trade Organization," Al-Jazirah Arabic daily quoted the official as saying.

Dabbagh also indicated that foreigners, who have established businesses in the name of Saudis, would be able to transfer them to their names. "Measures are being taken to protect the interests of these foreign businessmen," he added.

Informed sources said the Kingdom would revoke the minimum investment condition which it had imposed on foreign investment projects as part of its efforts to win WTO membership.

As per the present law, foreigners should make a minimum investment of SR5 million to win license for industrial projects, SR25 million for agricultural projects, SR30 million for real estate projects and SR2 million for service, contracting and other sectors.

Some Saudi businessmen opposed the move to revoke the minimum investment condition saying it would negatively affect their business interests. But some others said it would help reduce prices and boost economy.

Economic observers also said the move would help transfer of technology in projects which do not require big capital. However, they insisted that foreign investors must be asked to provide quality products and services and employ Saudis.

Dabbagh called upon Saudi and foreign investors, whose projects are concentrated in Riyadh, Jeddah and Dammam, to establish new projects in other parts of the country.

"This can also prevent migration of Saudis to the three major cities and reduce pressure on the infrastructure of these cities," he said.

The SAGIA chief also spoke about his department's efforts to facilitate issuance of business visas. "Any European businessman can now get a visa to the Kingdom without obtaining an invitation from a Saudi company," he pointed out.

He said the present taxation system in the Kingdom was attractive to foreign investors compared to many other countries.

Dabbagh said his authority would not work as an agency for early warning against the dangers of globalization. "Globalization has many benefits apart from the challenges it poses. If any industry is closed as a result of globalization, it means it was established on wrong foundation. It should not have been established in the first place. Saudi Arabia need not have all the industries," he explained.