Foreign Investment Law (FIL)

The main regulation of foreign investment is derived from the foreign investment law issued by Royal Decree in 2000(“FIL”). all foreign investors must have a license issued under the FIL.
THE FIL:
·Regulates the procedures and requirements for investing in KSA and the rights and obligations of foreign investors.
·Lists the businesses prohibited from having foreign investment.
·Includes provisions dealing with tax, with holding tax, the regulatory regime and foreign investment dispute resolution.
Strict anti-harbouring legislation, in the form of the anti commercial covering up law (anti-harbouring law), issued by Royal Decree in 2004, is in place. The anti-harbouring laws prohibits a non-KSA citizen from investing or practicing, for his own personal account or in collaboration with others, any activity that the FIL or other related laws and instructions do not permit. A person who facilitates inappropriate investment or practice is considered to be a covering up (harbouring) accomplice, severe penalties, including imprisonment, apply.