The Kingdom of Saudi Arabia: Emerging Horizons for Foreign Investment

In recent years, Saudi Arabia has rapidly emerged as one of the most attractive destinations for global investors. At the heart of this transformation is Vision 2030, the country’s ambitious plan to diversify its economy, reduce reliance on hydrocarbons, and create a world-class investment environment.

Since Vision 2030 was launched by Crown Prince Mohammed bin Salman in 2016, foreign direct investment (FDI) inflows have increased tenfold, with the Kingdom now standing as the largest repository of FDI stock in the Arab region, as confirmed by the United Nations Conference on Trade and Development (UNCTAD) in its World Investment Report.

I. A SYSTEMATIC RESTRUCTURING OF THE INVESTMENT REGIME

At the institutional level, the Saudi State has undertaken far-reaching legislative and administrative reforms designed to render its investment climate not merely hospitable, but actively facilitative. Among these reforms is the removal of ownership restrictions for foreign investors in a broad array of sectors—ranging from retail and manufacturing to ICT and logistics. The country has also embraced the OECD Investment Guidelines, committing to:

• Equal treatment for foreign investors

• Legal protections and transparency

• Easier visa and residence processes for international employees

• Incentives for knowledge and technology transfer

These reforms are already paying off. According to UNCTAD, FDI into Saudi Arabia grew by 7% between 2018 and 2019, reaching $4.6 billion, while total FDI stock hit $236 billion—the highest in the region.

II. MODES OF INVESTMENT IN SAUDI ARABIA

Foreign investors in Saudi Arabia have access to a range of entry options designed to accommodate various strategic goals and business models. They may establish public joint-stock companies, enter joint ventures with local Saudi partners, or operate fully independent businesses with 100% foreign ownership, subject to regulatory approval. Investment opportunities span multiple channels, including equity investments in the form of shares or bonds, real estate acquisitions such as land and residential property, financial instruments like stocks and futures contracts, and direct involvement in commercial enterprises—whether by launching new ventures or acquiring stakes in existing companies. This flexibility reflects the Kingdom’s commitment to fostering a dynamic and inclusive investment environment.

III. SPECIAL ECONOMIC ZONES: INSTRUMENTS OF TARGETED ATTRACTION

To support its new investment strategy, Saudi Arabia has launched several Special Economic Zones (SEZs) designed for specific industries. These zones offer world-class infrastructure and highly competitive incentives, including:

• 0% withholding tax on profit repatriation

• Reduced corporate income tax for up to 20 years

• 0% VAT on intra-zone transactions

• No customs duties on capital equipment

• Exemptions from expat levies

• Eased Saudization requirements, with support for hiring local talent

Whether you're in advanced manufacturing, logistics, maritime, or digital technologies, there's likely an SEZ tailored to your needs.

III. MACROECONOMIC STABILITY AND GLOBAL RECOGNITION

On the macroeconomic plane, the Kingdom enjoys a reputation for financial prudence and institutional stability. Its inflation is controlled, its currency pegged and predictable, and its fiscal policy characterized by long-range discipline. In recognition of these factors, the World Bank’s Doing Business 2020 report observed Saudi Arabia’s unprecedented ascent—rising 30 positions in a single year, marking the greatest improvement of any nation assessed.

IV. FRANCE: A MODEL INVESTOR

Among the states engaged in substantial commercial relations with the Kingdom, the French Republic holds a prominent position, ranking third globally in terms of FDI flows into Saudi Arabia. French conglomerates such as TotalEnergies and Accor have established durable presences in the energy and hospitality sectors, respectively. Moreover, France has extended its participation to the cultural, educational, and environmental domains—most notably through its involvement in the development of AlUla, a project of immense archaeological and touristic significance.

Such partnerships reflect a broader reality: that the Saudi investment regime not only tolerates but actively cultivates foreign capital, especially where it brings with it technical proficiency, institutional discipline, and long-term alignment with national priorities.

V. A CLEAR PATH TO ENTRY

Foreign investors are supported by a streamlined and transparent entry process designed to facilitate ease of establishment and regulatory compliance. The steps include;

• Register with the Ministry of Investment and obtain the required commercial license.

• Choose an appropriate legal structure that aligns with the nature of the intended investment.

• Open a local bank account and transfer the required capital into Saudi Arabia.

• Secure all sector-specific permits and approvals necessary for operational compliance.

• Register with the General Organization for Social Insurance (GOSI) and onboard the required workforce.

• Ensure full compliance with ESG standards and Saudi labor regulations throughout the investment lifecycle.

VI. HOW MOLMO CAN ASSIST

At Molmo, we help foreign investors navigate Saudi Arabia’s evolving business landscape with confidence. Our services include:

• Market entry assessments and regulatory navigation,

• Structuring of operations within SEZs,

• Facilitation of local partnerships and stakeholder engagement, and

• Compliance with legal, labor, and tax frameworks.

It is our considered view that the Kingdom of Saudi Arabia offers, at this juncture, a rare alignment of policy clarity, institutional support, and economic potential. For the discerning investor, this is not merely an opportunity—it is an imperative.

For confidential inquiries or to arrange a preliminary consultation, please contact the Molmo investment advisory desk.