The Legal Framework Governing Foreign Investment in Saudi Arabia: Challenges and Prospects

Abstract

This article provides a structured analysis of the contemporary legal framework governing foreign investment in the Kingdom of Saudi Arabia (KSA) and assesses the principal challenges that influence investor confidence. It positions the 2024 Investment Law within a wider reform agenda that encompasses the 2022 Companies Law, the 2023 Civil Transactions Law, the 2020 Commercial Courts Law, and the 2012 Arbitration Law, together with its practical implementation through the Saudi Center for Commercial Arbitration (SCCA) 2023 Rules. The discussion further considers the regulatory mandates of the Ministry of Investment (MISA), the growing role of special economic zones (SEZs) administered by the Economic Cities and Special Zones Authority (ECZA), and the market-access regime overseen by the Capital Market Authority (CMA). The analysis focuses on critical issues such as market-entry routes, licensing processes, foreign-ownership allowances, localisation requirements, and dispute-resolution mechanisms. Particular emphasis is placed on how recent legislative reforms interact with established commercial practices, especially in relation to investor onboarding, regulatory compliance, and exit planning. The article concludes with policy recommendations aimed at enhancing legal certainty, improving licensing and advisory pathways, reinforcing investor-protection standards, promoting transparency, and adopting international benchmarks to support regulatory coherence and strengthen investor confidence in alignment with Saudi Arabia’s Vision 2030 objectives.