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The National Investment Strategy in Saudi Arabia
Definition of the National Investment Strategy:
His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Prime Minister and Chairman of the Council of Economic and Development Affairs, launched the National Investment Strategy, which is one of the main enablers to achieve the objectives of the Saudi Arabia’s Vision 2030.
The national investment strategy aims to significantly increase the volume and quality of investments through the following:
- - Increasing the contribution of the private sector to the balance of payments and the economy in Saudi Arabia.
- - Supporting the development of strategic sectors.
- - Improving investment to promote innovation and support local content development.
Sectors of particular interest in addition to the traditional sectors include green energy, technology, healthcare and biotech, advanced modes of mobility and logistics, as well as Topics covering all sectors such as innovative start-ups and entrepreneurship.
When did Saudi Arabia launch the National Investment Strategy in Saudi Arabia?
In October 2021, Saudi Arabia launched the National Investment Strategy aimed at boosting investment and improving the Saudi Arabia’s competitive environment.
What are the goals and objectives of the national investment strategy?
Based on the current strengths and competitive advantages of Saudi Arabia, the overall goal of the National Investment Strategy is to increase the quality and volume of investments in Saudi Arabia, which will help promoting economic development according to Saudi Arabia’s Vision 2030. In all priority sectors, in the presence of a stronger role for the national and international private sector. The volume of required investments shall be supported, and the gap between current and target performance shall be reduced, by promoting effective improvements from government agencies and combination of policies, institutional capacities and programs to attract capital. Sectors of particular interest (in addition to traditional sectors) include green energy and technology, Healthcare, biotech, advanced mobility and logistics, as well as Topics covering all sectors such as innovative start-ups and entrepreneurship. The strategy seeks to achieve this goal through three comprehensive pillars:
- 1. Raising the contribution of the private sector, balance of payments and the economy in Saudi Arabia.
- 2. Support and develop the growth of strategic sectors
- 3. Improving investment to promote innovation and support local content development.
These pillars directly contribute to achieving the goals of Saudi Arabia’s Vision 2030
What are the goals of the national investment strategy to achieve the following investment goals by 2030:
- • Triple the volume of annual investments (as measured by gross fixed capital formation) to reach two trillion Saudi riyals by 2030 (equivalent to 30% of GDP).
- • Increasing the gross domestic investment component, in gross fixed capital formation, by more than double, to reach 1.65 trillion Saudi riyals (the average annual growth rate is about 9%)
- • Increasing foreign direct investment flows approximately twenty times by 2030 (5.77 of GDP by 2030).
- • The following figure shows the expected growth of the goals during the decade ending in 2030. The joint growth rate of investments is estimated at about 13% annually.
What are the main pillars of the national investment strategy?
• Each of the strategy pillars has a comprehensive objective of the initiatives and programs that aim to achieve the objectives of the strategy.
- > First Pillar: Investment Opportunities, which aims to unlock the full investment potential in Saudi Arabia and to develop and accelerate strong and diverse investment opportunities in all economic sectors through targeted programs.
- > Second pillar: Investors, which aims to increase the contributions of various investors in the investment system (local and international, public and private sectors, large, small and medium companies).
- >Third pillar: financing, which aims to diversify the financing options available to investors, by deepening capital markets and introducing new financial tools and platforms.
- >Fourth Pillar: Competitiveness and Assistive Enablers, which aims to enhance Saudi Arabia's competitiveness for local and international investors by adopting the best laws, regulations and rules related to, but not limited to, enhancing private sector participation and increasing transparency, clarity and predictability.
Second-track initiatives:
Second track program to improve the regulatory environment for investment:
Saudi Arabia shall be a leader in policy formulation, regulation and ease of doing business, compared to its counterparts, including OECD, G20 and regional States, through the following major corrective regulatory initiatives:
- • Coordination between the role of the Ministry of Investment and the National Competitiveness Center to organize and unify efforts and promote the integration of roles.
- • Formulating an investment system that supports the objectives’ achievement of the national investment strategy.
- • Collecting and inventorying relevant laws and regulations and facilitating access to them.
- • Translating investment-related projects and regulations, and including these translations in a survey platform for public review, including investors, in order to provide notes and visuals about them.
- • Studying and monitoring opportunities for signing free trade agreements with important trade blocs and promoting GCC integration, to increase access to the international markets, in cooperation with the General Authority for Foreign Trade.
- • Adopting international best practices in bilateral investment agreements related to investment promotion and investor protection.
- • Establishing arbitration centers in cities and special economic zones.
- • Encouraging consultation with the private sector regarding draft laws and regulations, to enhance the Private sector participation in determining the legislative environment in Saudi Arabia.
- • Develop and apply appropriate mechanisms and standards to measure the impact of legislation on the investment environment.
- • Reviewing, evaluating and amending existing legislation and regulations that negatively affect investors.
- • Establishing a regulatory framework that enables government agencies to evaluate investment offers that were submitted without prior request.
- • Establishing specialized courts, including investment courts.
- • Reviewing and evaluating tax systems and regulations in order to improve the competitiveness of the investment environment.
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