In the renaissance and development era, there is no doubt that our beloved Kingdom is at a stage of great transformation; and as we explained in the previous articles, the Kingdom has provided many opportunities for the country’s optimal development, thus opening the foreign investment business opportunities in the country, while organizing and clarifying the requirements explicitly to obtain or complete the procedures for obtaining the investment licenses.

As we mentioned before, the investment licenses for any activity require (basic requirements and certain conditions), where the requirements for the obtainment of this investment license differ from one license to another, depending on the type of activity; i.e. either before or after obtaining the investment license.

In order to illustrate this further, the Saudi Arabian General Investment Authority (SAGIA) optimally defined and clarified them under the following nominations: – Specialized Activities; which include Restricted Activities – and the Non-Specialized Activities.

Specialized Activities are the ones carried out and provided but require the approval of the affiliated government authority and that is (before) contracting with the beneficiary, such as the financial activities (e.g. financial advice, archiving and coverage undertaking) and the affiliated governmental authority in this case is the Capital Markets Authority (CMA); and there is also the airline activities, where no licenses will be issued for these activities unless after obtaining the approval of the competent authority, namely:- The General Authority of Civil Aviation (GACA).

In contrast, there are Restricted Activities, which fall under the specialized activities, but require the approval of the government authorities (after) obtaining the investment license, i.e. they obtained the investment license, but their activities are still restricted; as their next step require obtaining the approval of the competent government authority.

For example:

• The advertising agencies’ activity, which requires the approval of the competent authority (Ministry of Culture and Information), after the issuance of the investment license.
• Investment licensing for human and animal pharmaceutical industry activity, which requires the approval of the Saudi Food and Drug Authority (SFDA).
• Investment licensing for the activities of the quality and qualitative laboratories, which require the approval of Saudi Standards, Metrology and Quality Organization (SASO).
• Investment licensing for the activities of the foreign media offices and their representatives, which require the approval of the Ministry of Culture and Information.

The other type of activities include: Non-Specialized Activities

They are “activities carried out and provided through direct contracting with the beneficiary of the service, without the presence of a requirement to obtain the approval of government authorities”.

Upon the issuance of the investment license, there are restrictions that will be written on it, according to the type of this license for a particular activity, and they are binding on the Licensee or the establishment.

For Example:

In the Contracting Activity: It must be stated “the Licensee is not entitled to practice the consulting work of all its types and forms”.

In the Commercial Licenses: It must be stated “the Licensee must:

• Train 15% of the Saudis.
• Not to open more than one store in a single neighborhood”.

In the Information Technology Activities: It must be stated “it is not permissible to open a store”.

Note that there are also restrictions and general conditions written on the back of all the licenses, including:

• Inadmissibility to accommodate the workforce within the establishment.
• Usage of the establishment’s trade name, as stated in the SAGIA’s license.
• Work in a licensed investment activity only.
• Implementation of the investment project at the time specified in this application or the licensed branch.
• Inadmissibility to produce or market products other than the licensed ones.

Followed by the investors’ acknowledgement of the undertakings, whose contents state that the investors must abide by all the rules and controls according to the foreign investment system in the Kingdom of Saudi Arabia, and they undertake that their objective from submitting this application is to obtain a license to practice a real investment activity, based on the provided valid documents and information; otherwise, the Authority shall be entitled to cancel the investment license and apply the taken measures against the applicant and the Licensee.

I will talk about the SAGIA’s rights, the investors, the violations and the penalties in the next article, with God’s willing.