The Kingdom of Saudi Arabia is one of the countries that has begun to experience economic growth. It has sought to take its share in this field and has worked diligently to build its national economy on sound scientific foundations, to organize the exploitation of its natural resources, and to enhance its productive capacity.
The primary mission of the Foreign Capital Investment Authority at the Ministry of Commerce and Industry is to exercise full supervision over national and foreign capital, to encourage it, and to extend support to it.
In truth, our country is in need of capital in order to establish solid foundations for the industries we aspire to or intend to establish, so that it does not become necessary to impose customs duties to protect the new industrial wealth — even though the real reason for such measures is weak administration and technical inefficiency.
The proper approach, in our view, and the one that must be followed, is to open the way and provide opportunities for capital seeking investment fields, especially since we are in urgent need of strengthening existing industries and establishing new ones that meet the needs of the local market, satisfy the needs of the country, and reduce imports.
Adopting a policy that encourages the entry of foreign capital into our country — capital that is seeking investment opportunities — provides foreign businessmen with the chance to establish new industries in all fields. We consider this a fundamental factor in training our workers, who form a promising nucleus for preparing an industrial workforce of Saudi Arab workers.
Investment System
The Foreign Capital Investment Law was issued on 2/1/1376 AH to guide foreign capital operating in the Kingdom in various fields of trade, industry, and agriculture in a manner consistent with the interests of the country.
The law stipulated that Saudis must participate with no less than 51% of the project’s capital. It also defined the types of activities that such institutions should undertake and encouraged the entry of foreign capital to operate in the Kingdom. Before the abolition of currency control, the law allowed institutions to transfer part of their profits in the same currency in which the capital was brought from abroad, or in any currency approved by the Currency Control Authority. It also permitted the transfer of all or the remaining portion of the foreign capital along with accumulated profits after eight years.
Furthermore, in order to encourage the entry of foreign capital, the law took into account the cases of banks, major industrial companies, international tourism companies, and airlines, allowing them to operate in the Kingdom through their branches without requiring participation of national capital.