Foreign Investment Law: Essential Expressions & Terms - Essay Sample

Introduction

Article one of the 2000 Foreign Investment Law provides for expressions and terms that are essential for understanding the law. For instance, the council is described as the Supreme Economic Council. The Board of Directors is used to mean the General Investment Authority board.

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Additionally, the foreign investor is defined as the person who is not from the Kingdom of Saudi Arabia, but such a person can invest in the country. Foreign investment is an undertaking of a business activity that is approved by the law. Article two stipulates that and without prejudice to the provisions of the agreements and set laws, the government as the authority to issue licensing permits for business investment in Saudi Arabia.

All the submitted applications are considered and approved within thirty days. The relevant documents should adhere to the set regulations. If the set period expires without the approval of the document by the authority, the license shall be issued to the relevant investor. Nonetheless, if the authority rejects the application within the given period, its decision shall be final, and the concerned party is allowed to appeal the decision following the relevant law channel. The article three stipulates that the council has the autonomous authority to make the issuance of the activities excluded from the foreign investment. According to article four, a foreign investor is allowed to secure more than two licenses for various business activities, and the law shall stipulate the necessary procedures to be followed.

New Draft Law

Article two of the newly drafted law mentions that the law is aimed to contribute towards enhancing attractive investment opportunities for foreigners in Saudi Arabia. The law also seeks to generate employments of the citizens, encourage foreign investment, and improve the economic growth of the country. The law is said to apply to both domestic and international investors. Under Article four, the law outlines that the lists of Restricted and Reserved Areas shall be approved and accredited by the Minister council. The list will be subjected to reviewing and updated regularly by the board. The restrictions and reservations will be utilized by the Kingdom to enhance the protection of its economy under the circumstances where the government considers the domestic businesses to be vulnerable and at risk. The restrictions put a threshold on the minimum number of investments that can be applied.

Article five specifies the requirements that have to be met for foreign investment in the Kingdom. A foreign investor is required to register with the relevant authority and offer full details of their business investments, and in adherence with the set procedures. The criterion requirement under paragraph (2) makes no exemption for a foreign investor from any other condition or requirement that the government may deem fit to impose. Foreign investors are subjected to the same clearance and licensing criteria as domestic investors. Article seven treats all the investments, either domestic or foreign, with minimum treatment standards and by the international law practices, including equitable and fair treatment and physical security and full protection of the law.

I think that both the investment laws are crucially remarkable for enhancing the sound protection of the investors in the Kingdom. Smooth business operations can only be enhanced through the use of healthy rules, and of which seek to promote the interests of investors. The Saudi Investment laws, for instance, are essential and exhaustive in ensuring the adoption of relevant mechanisms that seek to encourage foreign investment in the country. The new draw law is also incorporative in its structures - aims to promote infirmity in business practices in the Kingdom.