Foreign investments

Saudi Arabia Launches New Committee To Review Foreign Investment | Pillsbury – Global Trade Law and Sanctions

On September 14, 2021, the Cabinet of Ministers of the Kingdom of Saudi Arabia launched a new Standing Ministerial Committee for the Review of Foreign Investments (CEFI) that would review foreign investments for potential threats to national security. This development comes at an important time as the Kingdom opens its doors to foreign investment in pursuit of the Vision 2030 plan. The Ministry of Investment recently reported that foreign investment licenses in Saudi Arabia had increased by 108% in the past. first semester 2021 compared to the previous year. The committee is expected to operate in a similar fashion to the Committee on Foreign Investment in the United States (CFIUS) and the UK National Security and Investment Bill, although its future role and implementation remains to be seen. determine.

Article 3 of the Saudi Foreign Investment Law previously authorized the Saudi Council for Economic and Development Affairs (SEDA) to “publish a list of prohibited activities” for foreign investors. The recent decision of the Cabinet of Ministers modifies Article 3 to indicate that “The Standing Ministerial Committee is responsible for screening foreign investments…”. The new amendment establishes a ministerial committee under the chairmanship of the Minister of Investment. CEFI members will also include ministers, presidents and heads of government agencies and authorities.

CEFI is responsible for several initiatives, in particular:

  • Identify sensitive and strategic industries in relation to national security and public policies;
  • Decide on maximum ownership percentages for foreign investors in Saudi companies working directly or indirectly in sensitive and strategic sectors.
  • Publication of procedures, rules and regulations for the screening of foreign investments; and
  • Creation of a list of sanctioned persons and entities.

CEFI will meet regularly in accordance with the new amendment and must submit an annual report to the Cabinet of Ministers.

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