Written by Hassan Al-Fayoumi

The General Investment Authority has requested from the Supreme Economic Council to remove the land transport services activity from the List of Activities Excluded From Foreign Investment; thus giving way for foreign companies to enter the Saudi labor market and compete in this field.

Please note that the list of activities currently excluded from the foreign investment are as follows:-

Firstly: The Industrial Sector

• Petroleum Exploration, drilling and production; excluding the mining related services internationally classified by numbers.
• Manufacturing of Military Equipment, Devices and Clothing.
• Manufacturing of Civil Explosives.

Secondly: The Services Sector

1. Catering services for military sectors.
2. Security and investigation.
3. Insurance services.
4. Real estate investment in both Makkah and Medina.
5. Tourism guidance services related to Hajj and Umrah.
6. Personnel servicing and provision services, including the local recruitment and employment offices.
7. Real estate brokerage services.
8. Printing and publishing services.
9. Distribution services (wholesale) and (retail), including medical retail such as private pharmacies, and (commercial agents), with the exception of the franchising services, internationally classified under the no. 8929; provided that foreign ownership rate does not exceed 49%; along with sufficing with a single condition for each region.
10. Audio and video services.
11. Education services (primary / secondary / adult education).
12. Communication services.
13. Land and air transport services.
14. Transmission and distribution of electricity services through the public network.
15. Space transport services.
16. Pipeline transport services.
17. Services provided by midwives and nurses, physiotherapy services and paramedical personnel services internationally classified under the no. 093191.
18. Fisheries-related services.
19. Poison centers, blood banks and quarantines.

As a result of such request, the Supreme Economic Council studied the General Investment Authority’s request to reach a decision accordingly, and it has actually issued several recommendations as follows: –

First: to Amend the clause on the list of the activities excluded from the list of foreign investment by removing the land transport activity from said list.

Second: to coordinate with all authorities related to the General Investment Authority; in order to establish controls and conditions, upon which the investment license will be granted; and the most important of such controls is the need to obtain approval from the Ministry of Transport and its issuance of special licenses to allow practicing such activity.

It must also be taken into account that the amendment has a positive impact on the Saudi labor market, as it increases the proportion of the localization business; in addition to creating plenty of real job opportunities for the Saudi youth.

Based on the aforementioned, these recommendations have been actually sent from the Supreme Economic Council to the Royal Court for review and approval and are to be worked upon accordingly as soon as possible.