2000 Public Statement
 

04/11/2000
Royal Decree formulating the System of Foreign Investment

System of Foreign Investment
as formulated by Royal Decree
April 11, 2000

(1) definitions:

(2) Without violation of any regulation, licenses for foreign investment are issued by the Commission either on temporary or permanent basis. The commission should settle any application for investment within thirty (30) days, effective from the date of receipt of the required documents as stipulated in the statute. If the fixed time expires without the settlement of the application, then the commission should issue the required license to the investor. If the commission turns down the application within the fixed time, then such a decision should be based on reasons and justifications. The applicant has the right to appeal in line with the system if his application is rejected.

(3) The Council is authorized to issue the list of activities excluded from foreign investment.

(4) In consideration of Article (2), the foreign investor has the right to obtain more than one license in various activities. The statute determines the required restrictions.

(5) Licensed foreign investments can be either installations owned by a national investor together with a foreign investor, or installations wholly owned by the foreign investor. The legal form for the installation is to be in line with the system and the directives.

(6) Projects licensed in line with this system will enjoy all privileges, incentives and guarantees of national projects.

(7) The foreign investor is authorized to remit abroad his share, either from selling his portion or from the profits earned by a project or to use it in any legal manner. He is also authorized to remit the necessary sums to meet any contractual obligations pertaining to the project.

(8) The licensed foreign company has the right to own the required real estate for practicing the licensed activity or housing some or all of the personnel in line with the real estate regulations for non-Saudis.

(9) The sponsorship of the foreign investor and his non-Saudi employees will be undertaken by the licensed company.

(10) The Commission will provide all interested persons with the required information, clarifications and statistics as well as with the needed services and procedures so as to facilitate all matters pertaining to the investments.

(11) It is not permitted for the investments of the foreign investor to be confiscated either partially or in entirety without a judicial verdict, nor for his property to be expropriated, either partially or in entirety, except for in the public interest in return for fair compensation in line with the system and directives.

(12) In the event of any violation, the foreign investor is informed in writing to eliminate the violation within a certain period that is to be fixed by the Commission. If the violation still remains without correction, the foreign investor will be subject to one of the following punishments: either he will be deprived of all or some of the incentives and privileges, or pay a fine not exceeding SR 500,000, or have his foreign investment license revoked. The aforementioned punishments will be carried out by a decision to be issued by the board of directors. The foreign investor has the right to appeal the punishment meted out to him before the Court of Grievances in line with its system.

(13) Without violation of the agreements to which the Kingdom of Saudi Arabia is party, settlement of disputes between the government and the foreign investor as regard to the latter's licensed investments, in line with the system, is to be carried out in an amicable manner, but if amicable settlement is not reached, the dispute will be settled in line with the regulations.

(14) All licensed foreign investments will be treated in line with the rules of taxes implemented in the Kingdom of Saudi Arabia.

(15) The foreign investor will adhere to the systems, statutes and instructions carried out in the Kingdom of Saudi Arabia and to the international agreements to which the Kingdom of Saudi Arabia is party.

(16) The implementation of the system does not contravene with the acquired rights for foreign investments that were in existence prior to the implementation of the system, but the practicing of these projects with their activities or increasing of their capitals, will be subject to the rules of the system.

(17) The commission will issue the statute and publish it in the official gazette, and it will be implemented effective from the date of its publication.

(18) The system is to be published in the official gazette and implemented after thirty (30) days, effective from the date of its publication; it will thereby annul the system for investment of foreign capital that was issued by the Royal Decree dated 2/2/1399 H, and will also cancel all matters that contradict with the rules.

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