Successfully investing in Saudi Arabia

Saudi Arabia’s investment climate remains stable and promising, supported by a range of reforms designed to attract international investors. The country benefits from favorable conditions, including the ability for foreign investors to own up to 100 percent of businesses in many sectors, streamlined licensing processes, and tax-advantaged special zones. Additionally, Saudi Arabia’s credit rating was recently upgraded by S&P Global Ratings from “A” to “A+,” reinforcing confidence in its economic stability.

As part of its Vision 2030, the national transformation strategy, Saudi Arabia is focused on diversifying its economy. The goal is to reduce reliance on the oil sector while promoting future-oriented sectors such as renewable energy, artificial intelligence, tourism, and infrastructure. Investment opportunities in green technologies, including solar energy and hydrogen, as well as large-scale infrastructure projects like NEOM, are particularly promising and align with the country’s shift towards a technology-driven, sustainable economy.

The mining sector offers substantial investment potential, supported by new licensing processes and progressive mining laws, with untapped mineral resources estimated to be worth around 2.5 trillion US dollars. Additionally, the Kingdom's rapidly growing digital economy, driven by initiatives in artificial intelligence and cloud computing, is attracting significant investments from global players like Amazon Web Services (AWS), Microsoft, and Google Cloud.

Moreover, the tourism sector is benefiting greatly from Vision 2030, which aims to attract 150 million international visitors annually. This vision seeks to position Saudi Arabia as a global tourism hub, with major infrastructure developments and expansions in the hospitality and leisure sectors. This creates abundant business opportunities for investors in areas such as hospitality, leisure, and infrastructure.

Overall, Saudi Arabia offers a growth-oriented and future-ready investment environment in 2025, driven by strategic reforms, extensive infrastructure projects, and the Vision 2030 plan, paving the way for sustainable and profitable investments.

Challenges in Project Implementation: Many ambitious projects in Saudi Arabia, particularly those under Vision 2030, are still in the planning or early construction phases. While these large-scale infrastructure and economic initiatives present significant potential, their realistic completion by 2030 remains a challenge.

Expansion of Emiratisation Requirements (“Saudization / Nitaqat-Program”): Companies in Saudi Arabia are required to employ a specified quota of Saudi nationals. This localization policy, known as the Nitaqat Program, has been in place since 2011 and has undergone several revisions and expansions since its introduction. As a result, international companies often face increased recruitment and training efforts, particularly if their local professional networks are limited. Non-compliance with these requirements may result in penalties, including license restrictions or visa issuance limitations, highlighting the importance of thorough workforce planning.

Saudi Arabia’s new Investment Law, which came into effect in February 2025, plays a pivotal role in positioning the Kingdom as a competitive destination for international investors. This reform is a central component of Vision 2030, which seeks to diversify the country’s economy and reduce its dependency on oil.

The law enhances the Kingdom's competitiveness by ensuring the equal treatment of both domestic and foreign investors. Investor rights are significantly strengthened, including protections against indirect expropriation, the right to free transfer of capital, profits, and other investment-related proceeds, as well as the safeguarding of trade secrets and intellectual property.

A key element of the reform is the shift from a licensing system to a streamlined registration process, which notably includes the elimination of the separate foreign investment license previously required. This change enhances transparency and reduces administrative burdens, offering international companies a more efficient and clearer process.

The law also differentiates between prohibited and restricted activities for foreign investors. Prohibited activities require explicit approval, while restricted activities are accessible under certain conditions. The lists of such activities are regularly updated and published in the Investor Guide, providing greater clarity for investors. Combined with a modernized sanctions regime that distinguishes between minor and serious violations, the law ensures that the rules for all actors are clear and enforceable.

In summary, the new Investment Law promotes a more transparent, stable, and competitive investment environment in Saudi Arabia. These reforms not only make the Kingdom a more attractive location for international investors but also lay a solid foundation for sustainable economic growth in line with Vision 2030.