The Council of Ministers also approved the establishment of the General Investment Commission, which will be responsible for proposing and implementing policies to promote foreign investment in Saudi Arabia, and for issuing investment licenses to foreign investors. H.R.H. Prince Abdullah bin Faisal bin Turki was appointed as the new investment body governor, with the rank of Minister.
In a dramatic change from the previous investment law, the new Foreign Investment Law allows foreigners 100-percent ownership of the projects, as well as the property required for the project itself or for housing company personnel, while enabling them to retain the same incentives given to national companies. For example, projects that are 100 percent foreign-owned will be eligible for loans from the Saudi Industrial Development Fund. Investors will also be able to hold investment licenses in more than one type of activity. The new law has brought significant changes to the previous sponsorship regulations. Foreign investors and their non-Saudi employees will be sponsored under the new licensed firm.
Another very significant change is the reduction in the corporate tax rate for foreign companies with profits over SR100,000 a year, from 45 percent to 30 percent. The new law also enables companies to carry forward corporate losses for an unspecified number of years.
The General Investment Commission will work towards streamlining the foreign investment application process by creating a one-stop shop facility. It will be required to respond to investment applications within 30 days. If the Commission does not make a decision within this time frame, the license will be issued. If the Commission declines the application for some reason, the foreign investor is allowed to appeal the decision.
The new Foreign Investment Law will become effective 30 days after it is published in the Official Gazette.