Foreign Investment Regulation

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3 KEY ELEMENTS FOREIGN INVESTMENT REGULATION

 

LICENSING REGULATION AND PROCESS FOR FOREIGN INVESTMENT

  • Being licensed to operate in Saudi Arabia as a foreign investor is necessary to obtain any permit to start operations
  • The Saudi Arabian General Investment Authority (Saudi Arabian General Investment Authority) is the Kingdom’s investment promotion agency, responsible to setup and govern the foreign investment regulation, facilitate the entrance of investors into the country and license investors
  • Different types of investment licenses are available, each with its own requirements, such as minimum acceptable capital and a cap on foreign capital
  • Prospective investors can apply for a license online on SAGIA’s portal

     

    FISCAL REGIME ELEMENTS RELEVANT TO FOREIGN INVESTMENT

    Four main fiscal regime elements are particularly relevant to foreign investment

      • Corporate income tax, applicable on foreign ownership of Saudi-based companies; with  statutory corporate rate set at 20%, the lowest in  the G20
      • Zakat, applicable on local ownership of Saudi-based companies; set at 2.5% of the Zakat base
      • Introduction of a 5% value-added tax
      • INTERNATIONAL TRADE AGREEMENTS
      • Saudi Arabia is member of WTO with commitment to further liberalize trade regime and accelerate  integration in the global economy
      • On a regional dimension, Saudi Arabia is member of the Gulf Cooperation Council and of the Greater Arab  Free Trade Area1
      • Bilaterally, Saudi Arabia signed treaties for the avoidance of double taxation of income and capital  (DTAs) with 29 countries2 as well as agreements aimed  at promoting and protecting the investments of the  enterprises of one contracting party in the territory of  the other with 23 countries3
      Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen, Algeria, Azerbaijan, Austria, Bangladesh, Belarus, China, Egypt, Ethiopia, Greece, Hungary, India, Italy, Japan, Kazakhstan, Luxembourg, Macedonia, Malaysia, Netherlands, Pakistan, Portugal, Russia, South Africa, South Korea, Spain, Sweden, Turkey, Uzbekistan, Venezuela, Vietnam Azerbaijan, Austria, Belarus, Belgium, China, Czech Republic, Egypt, France, Germany, India, Indonesia, Italy, Luxembourg, Malaysia, Philippines, Singapore, South Korea, Spain, Sweden, Switzerland, Taiwan, Turkey, and Ukraine

 

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