Foreign Investment Law
Royal Decree No. (M/1) dated 5/1/1421H (Corresponding to 10/4/2000AD)
WITH THE HELP OF ALMIGHTY ALLAH,
WE, FAHD IBN ABDULAZIZ AL-SAUD, KING OF THE KINGDOM OF SAUDI ARABIA,
Based upon the Article (70th) of the Basic Law of Saudi Arabia, issued by the Royal Decree No. (A/90) dated 27/8/1412H (corresponding to 2/3/1992AD),
Based upon the Article (20th) of the Law of the Council of Ministers of Saudi Arabia, issued by the Royal Decree No. (A/13) dated 3/3/1414H (corresponding to 21/8/1993AD),
Based upon the two Articles 17 and 18 of the Law of the Consultative Assembly of Saudi Arabia “Majlis Ash Shura” issued by the Royal Decree No. (A/19) dated 27/8/1412H (corresponding to 2/3/1992AD),
After reviewing the Statute of the Supreme Economic Council issued by the Royal Decree No. (A/111) dated 17/5/1420H (corresponding to 28/8/1999AD),
After reviewing the Foreign Capital Investment Law issued by the Royal Decree No. (M/4) dated 2/2/1399H (corresponding to 1/1/1979AD),
After reviewing the Supreme Economic Council Resolution issued by the Royal Decree No. (1) Dated 14/11/1420H (corresponding to 20/2/2000AD)
After reviewing Majlis Ash Shura Resolution No. (64/60),
And after reviewing the Council of Ministers of Saudi Arabia Resolution No. (1) Dated 5/1/1421H (corresponding to 10/4/2000AD),
DO HEREBY DECREE THE FOLLOWING:
First: The approval of the Foreign Investment Law with the attached form.
Second: His Excellency Deputy Prime Minister and Ministers, each under his jurisdiction, shall take this Decree into action -.
Fahd Ibn AbdulAziz
Foreign Investment Law in the Kingdom of Saudi Arabia Article 1:
The following terms and expressions shall have the meanings assigned to them, unless the context requires otherwise:
(a) The Council: The Supreme Economic Council.
(b) Board of Directors: The Board of Directors of the General Investment Authority.
(c) The Authority: The General Investment Authority.
(d) The Governor: The Governor of the General Investment Authority.
(e) Foreign Investor: A natural person who is not of Saudi nationality or a legal person whose partners are not all Saudi.
(f) Foreign Investment: Investment of foreign capital in an activity licensed by this Law.
(g) Foreign Capital: In this Law, foreign capital shall mean, for example, but not limited to, the following funds and rights so long as they are owned by a foreign:
(1) Cash, securities and negotiable instruments.
(2) Foreign investment profits, if invested to increase capital, expand existing projects, or establish new ones.
(3) Machinery, equipment, furnishings, spare-parts, means of transport and production requirements related to the investment.
(4) Intangible rights, such as licenses, intellectual property rights, technical know- how, administrative skills and production techniques.
(h) Commodity Firms: enterprises that produce industrial, agricultural, plant and animal commodities.
(i) Service Firms: Service and contracting enterprises.
(j) Law: The Foreign Investment Law.
(k) Regulation: The implementing regulation of this Law.
Article 2:
Without prejudice to the provisions of the laws and agreements, the authority shall issue a license for foreign capital investment in any investment activity in the Kingdom, whether permanent or temporary.
The authority shall act on the investment application within 30 days of the submission of all the documents required by the regulation. If the specified period lapses without the authority acting on the application, it shall issue the required license to the investor.
If the authority rejects the application within the prescribed period, the decision must be justified, and the party whose application has been rejected shall have the right to appeal such decision according to laws.
Article 3:
The Council shall have the authority to issue a list of activities excluded from foreign investment.
Article 4:
Subject to the provisions of Article 2, the foreign investor may obtain more than one license for different activities, and the regulation shall specify the necessary requirements.
Article 5:
Foreign investments licensed under the provisions of this Law may be in either of the two following forms:
(1) Firms owned by a national and foreign investor.
(2) Firms wholly owned by a foreign investor. The legal form of the firm shall be determined in accordance with Regulation and directives.
Article 6:
The enterprise licensed under this Law shall enjoy all the benefits, incentives and guarantees extended to a national enterprise, according to laws and directives.
Article 7:
A Foreign Investor may transfer his share that is derived either from the sale of his equity, the liquidation surplus, or from profits generated by the firm, or to dispose of it in any other lawful manner. The foreign investor may also transfer the amounts required to settle any contractual obligations related to the project.
Article 8:
A foreign firm licensed under this Law may acquire necessary real estate as needed for operating the licensed activity, or for housing all or some of its staff, subject to the provisions governing real estate ownership by non-Saudis.
Article 9:
The foreign investor and his non-Saudi staff shall be sponsored by the licensed firm.
Article 10:
The authority shall provide all interested investors with required information, clarifications and statistics as well as providing them with all services and procedures to facilitate and complete all transactions related to investment.
Article 11:
The foreign investor’s investments may not be confiscated, wholly or partially without a court judgment. Moreover, they may not be subject to expropriation, wholly or partially, except for public interest, in exchange for a fair compensation according to laws.
Article 12:
(1) The authority shall notify the foreign investor in writing when violating the provisions of this Law and its regulation, in order to rectify such violation within a period of time specified by the authority for the rectification of the violation.
(2) Without prejudice to any harsher penalty, the foreign investor shall be subject to any of the following penalties if the violation persists:
(a) Withholding all or some of the incentives and benefits given to the Foreign Investor.
(b) Imposing a fine not exceeding SR 500 thousands.
(c) Revoking the foreign investment license.
(3) The penalties referred to in paragraph (2) shall be applied pursuant to a resolution by the board of directors.
(4) The penalty resolution issued may be appealed before the Bureau of Grievances in accordance with its Law.
Article 13:
Without prejudice to agreements in which the Kingdom of Saudi Arabia is a party:
(1) Disputes arising between the government and the foreign investor in relation to his investments licensed in accordance with this Law shall, as far as possible, be settled amicably. Failing such settlement, the dispute shall be settled according to the relevant laws.
(2) Disputes arising between the foreign investor and his Saudi partners in relation to his investments licensed in accordance with this Law shall, as far as possible, be settled amicably. Failing such settlement, the dispute shall be settled according to relevant laws.
Article 14:
All foreign investments licensed under this Law shall be treated in accordance with the applicable tax provisions and amendments thereto in the Kingdom of Saudi Arabia.
Article 15:
The foreign investor shall comply with all laws, regulations and directives in force in the Kingdom of Saudi Arabia, as well as international agreements in which the Kingdom is a party.
Article 16:
The implementation of this Law shall not prejudice the acquired rights of the foreign investments, legally existing before this Law, to come
into force. However, the process of conducting activities or increasing capital by such enterprises shall be governed by provisions of this Law.
Article 17:
The authority shall issue the regulation and it shall be published in the Official Gazette and shall become effective as of the date of its publication.
Article 18:
This Law shall be published in the Official Gazette and shall become effective after 30 days of its publication date. The Foreign Capital Investment Law, issued upon Royal Decree No. (M/4), dated 2/2/1399H (corresponding to 1/1/1979AD), as well as any provisions inconsistent therewith shall be canceled.
List of Activities Excluded from Foreign Investment.
First: Industry Sector
1. Exploring, excavating and producing petroleum products. This doesn't include mining related services that are classified internationally under the numbers 883 and 5115.
2. Manufacturing military uniforms, equipment's, and devices.
3. Manufacturing civil explosives.
Second: Services Sector
1. Catering services for military sectors.
2. Investigation and security.
3. Insurance Services.
4. Real estate investment in the two Holy Cities of Makkah and Medina.
5. Tourist guidance services related to Hajj and Umra (visit to the Holy Cities).
6. Recruitment and employment services including local recruitment offices.
7. Real estate brokerage services.
8. Printing and Publishing Services
9. Distribution services (wholesale and retail trade) including medical retail trade such as the private pharmacies classified under the numbers of 632631, and 612161136111, and (commercial agents) except Franchising Services that are classified internationally under the number 8929, provided that the foreign property percentage does not exceed 49% as well as it shall be sufficient to stipulate one condition for every area.
10. Audio and visual services.
11. Education services (primary/secondary/adult education).
12. Communication services.
13. Land and air-transport services.
14. Distribution of electricity services as part of the general network.
15. Space transport services.
16. Pipe line transport services.
17. Services rendered by mid-wives and nurses, physiotherapy services, and Para- medical services classified internationally under the number of 93191.
18. Services related to the field of fishing.
19. Services related to toxic centers, blood banks and quarantines.
Resolution No. (20) Dated 5/1/1421H (corresponding to 10/4/2000AD) concerning the Statute of the General Investment Authority
THE COUNCIL OF MINISTERS OF SAUDI ARABIA,
After reviewing the transaction No. 7/Y/20517 dated 29/12/1420H (corresponding to 4/4/2000AD) coming from the Divan of the Cabinet Presidency, including a letter No. 625 dated 28/8/1420H (corresponding to 6/12/1999AD) sent by His Excellency the Minister of Industry and Electricity, and enclosed with the minutes of the ministerial committee formed by the Royal Decree No. 48// dated 8/2/1420H (corresponding to 23/5/1999AD) stipulating the review of proposals submitted by the Ministry of Commerce and Ministry of Industry and Electricity concerning the investment atmosphere in the Kingdom,
After reviewing the Draft Statute of the General Investment Authority,
After reviewing the paragraph (2) of the Article (24th) of the Law of the Council of Ministries issued upon the Royal Decree No. (1) Dated 14/11/1420H (corresponding to 20/2/2000AD),
And after reviewing the memorandum No. (382) dated 30/12/1420H (corresponding to 5/4/2000AD) prepared by the Bureau of Experts,
DO HEREBY DECREE THE FOLLOWING:
1. The approval of the Statute of the General Investment Authority with the attached form.
2. The General Investment Authority shall replace the Saudi Consulting Services House. Besides, the rights and obligations assigned to the Saudi Consulting Services House shall be referred to the General Investment Authority.
3. The Formation of a committee made up of the Ministry of Civil Service, Ministry of Industry and Electricity, and the Ministry of Finance and National Economy in order to study the ways of benefiting the General Foreign Investment Authority of the Ministry of Industry and Electricity and submit its recommendations to the Council of Ministers.
The Statute of the General Investment Authority
Article 1:
The following terms and expressions shall have the meanings indicated opposite to them thereto, unless the context requires otherwise:
The Council: The Supreme Economic Council.
The Chairman: The Chairman of the Supreme Economic Council.
The Board of Directors: The Board of Directors of the Saudi Arabian General Investment Authority.
The Authority: The Saudi Arabian General Investment Authority.
The Governor: The Governor of the Saudi Arabian General Investment Authority.
The Regulation: The Implementing Regulation of the Statute.
Article 2:
Under this Statute, a general authority named “Saudi Arabian General Investment Authority” is to be established. Such an Authority shall enjoy the legal personality, pertinent to the chairman, and Riyadh City is the Headquarter of the Authority.
Article 3:
The main objective of the Authority is to care for the affairs of investment in the Kingdom including the investment. This includes the stipulation of its responsibilities as following:
4. Providing the State's policies in the field of developing and increasing local and foreign investment and submitting it to the Council.
5. Proposing operational plans and rules in order to improve investment atmosphere in the Kingdom and submitting them to the Council.
6. Following up, and estimating the performance of the local and foreign investment and preparing a periodic report about it; the Regulation shall determine the elements of the report.
7. Preparing studies about the opportunities of investment in the Kingdom and promoting them.
8. Cooperating with the concerned governmental bodies in the way that enables the Authority to perform its tasks.
9. Organizing, setting up, and participating in conferences, seminars internal and external exhibitions and activities related to investment.
10. Developing databases and conducting statistical surveys in order to enable the Authority to perform its tasks.
11. Any regular tasks assigned to the Authority.
Article 4:
The Board of Directors of the Saudi Arabian General Investment Authority is to be formed as follows:
1. Governor
member 2. A representative of the Ministry of Interior
member 3. A representative of the Ministry of
Commerce
member 4. A representative of the Ministry of Foreign Affairs
member 5. A representative of the Ministry of Agriculture and
Water
member 6. A representative of the Ministry of Petroleum and Mineral
Resources
member 7. A representative of the Ministry of Industry and
Electricity
member 8. A representative of the Ministry of Finance and National
Economy
member 9. A represent vie of the Ministry of Planning
member 10. A representative of the Ministry of Labor and Social Affairs
member 11. A representative of the Saudi Arabian Monetary Agency
12. Two members from the private sector are appointed by a decision of the Chairman upon a proposal of the Governor; the number of representatives of the governmental bodies in the Board of Directors must not be 14 representatives at least and the duration of membership in the Board of Directors is three years only.
Article 5:
The Board of Directors is the authority dominating and administrating the affairs of the Saudi Arabian General Investment Authority. The Board also shall take all the required decisions to achieve the authority targets under the provisions of this Statute and shall do, specifically, the following:
1. Taking decisions on the investment applications and abolishing them.
2. Proposing a list of the activities excluded from foreign investment and submitting it to the Council.
3. Ratifying internal, financial and administrative regulations as well as the organizational structure of the Authority in the way that enables the Authority to perform its tasks.
4. Monitoring and reviewing the administrative and financial aspects of the Authority.
5. Certifying the draft budget, balance sheet, auditor report and annual report of the Authority as a preliminary step to submit them to the Council as the Statute stipulates.
6. Forming committees from the members of the Board of Directors and others to practice the responsibilities assigned to the Authority in accordance with the decision of the Board of Directors.
7. Reviewing matters submitted by the Governor and committees formed by the Board of Directors.
8. Proposing the amendment of such Statute and the other laws related to investment.
9. Assigning individuals in charge of the Authority's administration to draw all kinds of agreements and contracts within the rules ratified by the Board of Directors.
10. Approving business and operational plans of the Authority.
11. Accepting donations, gifts, grants and endowments.
Article 6:
The Board of Directors meets upon an invitation offered by the Governor at least once every month. The Governor must invite the Board of Directors for meeting in case at least the half of members requested so. The invitation should include the agenda, given that the meeting shall not be valid unless the majority of members, including the Chairman of the Board of Directors or whoever represents him of members, present.
The meeting decisions shall be issued by majority votes of members present. In case of a tie, the decision of the party including Chairman will be the casting vote. The Board of Directors may invite individuals deemed to be experts or having information, but they shall not be given the right of voting. Deliberations and decisions of the Board of Directors are to be recorded in minutes signed by the meeting chairman and the members present
.
The Board of Directors shall have the right of issuing decisions by referring them to members severally only in cases of necessity. In this case, all members of the Board of Directors should approve the decisions in writing and such decisions are to be submitted to the Board of Directors in the first subsequent meeting for recording them in the minutes of meeting.
Article 7:
The Authority should have a Governor in a rank of Minister who is appointed by a Royal Decree upon a proposal of the Chairman.
Article 8:
The Governor shall be the chief executive officer of the Authority's administration and conducts its business. His responsibilities are determined by the provisions of this Statute and decisions of the Board of Directors. The Governor shall be entitled to do the following tasks:
1. Supervising the preparation for the meetings of the Board of Directors.
2. Making sure the decisions taken in the meetings of the Board of Directors are implemented.
3. Preparing the draft budget, draft balance sheet, and annual report of the Authority as a preliminary step to submit them to the Board of Directors.
4. Monitoring the staff and clients of the Authority in accordance with the authorities assigned to him and provisions of the Regulations.
5. Taking actions in regards to expenses of the Authority under the certified annual budget.
6. Submitting annual reports to the Board of Directors on the works, achievements and activities of the Authority.
7. Proposing the plans and schemes of the Authority and monitoring the implementation thereof after obtaining the approval of the Board of Directors.
8. Representing the Authority before the governmental bodies and others.
The Governor shall assign some of such tasks to other officials in charge of the Authority's administration.
Article 9:
1. An Investors Service Center shall be established within the Authority, consisting of liaison offices including full-time representatives from all government departments concerned with investment, such as the Ministry of Interior (the General Directorate of Passports, the General Department of Expatriate Affairs), Ministry of Foreign Affairs, Ministry of Commerce, Ministry of Industry and Electricity, Ministry of Finance and National Economy (Zakat and Income Tax Department, Saudi Industrial Development Fund), Ministry of Agriculture and Water, Ministry of Labor and Social Affairs (Labor & Workmen's Office), Ministry of Petroleum and Mineral Resources.
2. The Council shall have the right to change the departments mentioned in this Statute upon a proposal from the Board of Directors.
3. The above mentioned Investors Service Center shall operate under the supervision of the Governor, extend its services to investors in a manner that ensures centralizing the receipt of applications, taking actions thereof, finalizing such matters promptly and issuing licenses, approvals, visas and residence permits required for carrying out the activities.
Article 10:
The Authority shall have an independent budget allocated in accordance with the arrangements of allocating the State's general budget and the Authority's funds shall consist of the following:
1. The allocated appropriations in the State budget.
2. Income derived by the Authority from conducting activities that fall within its objectives.
3. Any other funds which the Board of Directors may accept such as donations, gifts, grants and endowments.
4. All movable and immovable properties passed to the Authority from the Saudi Consulting Services House.
The Authority's funds shall be deposited in an independent account and disbursed in accordance with the Authority's financial regulations.
Article 11:
The fiscal year of the Authority is the State's fiscal year; Except that the first fiscal year of the Authority shall commence as of the date this Statute comes into effect.
Article 12:
Without prejudice to the right of the General Audit Bureau in monitoring the Authority's accounts, the Board of Directors shall appoint one or more auditors who are either natural persons or legal persons licensed to work in the Kingdom and shall determine their fees.
In case of the plenty of auditors, they shall be jointly liable for their activities before the Authority. The auditors shall submit reports to the Board of Directors with a copy to the General Audit Bureau.
Article 13:
The Board of Directors shall issue the Regulation within 30 days from the date of issuing this Statute.
The Regulation shall be published in the Official Gazette and shall become effective on the date of its publication.
Article 14:
This Statute shall be published in the Official Gazette and shall become effective after thirty days from the date of publication and shall supersede any other contradicting regulations.
The Implementing Regulation for the Foreign Investment Law First: Definitions
Article 1:
For implementing this regulation, the following terms and expressions shall have the meanings assigned to them, unless the context requires otherwise:
(a) The Council: The Supreme Economic Council.
(b) Board of Directors: The Board of Directors of the General Investment Authority.
(c) Chairman of the Board of Director: Chairman of the Board of Directors for the General Investment Authority.
(d) The Authority: The General Investment Authority.
(e) The Governor: The Governor of the General Investment Authority.
(f) Foreign Investor: A natural person who is not of Saudi nationality or a legal person whose partners are not all Saudi.
(g) Foreign Investment: Investment of foreign capital in an activity licensed by this Law and by this regulation.
(h) Foreign Capital: In this Law and regulation, foreign capital shall mean, for example, but not limited to, the following funds and rights so long as they are owned by a foreign investor:
(1) Cash, securities and negotiable instruments.
(2) Foreign investment profits, if invested to increase capital, expand existing projects, or establish new ones.
(3) Machinery, equipment, furnishings, spare-parts, means of transport and production requirements related to the investment.
(4) Intangible rights, such as licenses, intellectual property rights, technical know- how, administrative skills and production techniques.
(i) Law: Foreign Investment Law.
(j) Commodity Firms: enterprises that produce industrial, agricultural, plant and animal commodities.
(k) Service Firms: Service and contracting enterprises.
(l) Regulation: The Implementing Regulation of the Foreign Investment Law.
(m) Center: The Comprehensive Service Center, stipulated in article (9) of the Authority Law.
Second: The areas of investment:
Article II:
The Authority shall authorize any investment of foreign capital in the Kingdom, whether permanently or temporarily, and in all investment activities, except the activities excluded under Article III of the law.
Article III:
The Board of Directors regularly review the list of activities excluded from foreign investment for the purpose of reducing them, and then submit that to the Board of Directors for consideration and approval.
Article IV:
The foreign investment licensed to work in accordance with the provisions of the law and these regulations may be taken one of the following forms:
• Enterprises owned by national investor and a foreign investor.
• Enterprises wholly owned by a foreign investor.
Third: The Benefits, Incentives and Guarantee:
Article V:
The foreign investment enterprises would enjoy the benefits, incentives and guarantee enjoyed by the national institutions, including for example:
1. Incentives stipulated in the Protection and Promotion of National Industries, issued by Royal Decree No. 50 dated 23/12/1381 AH.
2. Own real estate necessary for the conduct of the licensed activity or to the investor residence or the residence of his employees in accordance with the provisions of the non-Saudis owning a property and investing it, issued by Royal Decree No. M / 15 dated 17/04/1421 AH.
3. Advantages of agreements to avoid double taxation, and agreements related to promotion and protection of investments concluded by the Kingdom.
4. Inadmissibility of the confiscation of investments as a whole or partly without a court order or expropriation in whole or in part except for the public interest and against fair compensation.
5. Re-transferring of the foreign investor's share outside the Kingdom, of his share`s sale or from liquidation surplus or profits made by the institution, and dispose of it for any other legitimate obligations, also he has the right to transfer the amounts necessary to meet his contractual obligations for any particular project.
6. The freedom of movement of shares among the partners and others.
7. Sponsorship of the foreign investor and his non-Saudis staff would be on the licensed institution.
8. Obtain industrial loans, according to the provisions of the Industrial Development Fund.
9. Deport losses generated by the institution to subsequent years, and not be accounted, at the settlement of tax, for the years where the institution achieves profits.
Fourth: The Terms and Conditions of the License.
Article VI:
Terms and Conditions of the License Granted to Foreign Investment:
1. Absence of the investment activity requesting a license of the list of activities excluded from foreign investment.
2. The product specifications, the method and the materials are licensed by the Kingdom Regulations, and in the absence of such Regulations, it would be referred to the European Union or the United States or Japan Systems
3. The amount of capital invested for the agricultural institutions should not be less than twenty-five million riyal.
4. The amount of capital invested for industrial institutions should not be less than five million Saudi riyals.
5. The amount of capital invested for other institutions should not be less than two million Saudi riyals in accordance with the control and detailed rules set by the Board of Directors.
The Board of Directors may reduce the minimum capital invested in projects established in areas determined by the Board, or in projects that need high technical expertise, or for products intended for export.
6. The foreign investor had not been issued against him final verdicts because of substantial violations of the provisions of this Regulation.
7. The foreign investor had not been sentenced previously in financial or commercial irregularities, whether in the Kingdom or in other countries.
8. The granting of a license should not lead to violation of international or regional agreements signed by the Kingdom.
Article VII:
The foreign investor may get more than one license to engage in the same activity or different activities in accordance with the following controls:
1. The foreign investor is applied to the conditions set forth in Article VI of these Regulations.
2. The license applications to be treated for exercising the same activity provided by the natural or legal persons for the extension of their current project.
3. The Board of Directors will reconsider these controls periodically or when needed.
Article VIII:
The foreign investor may buy local or foreign investment institutions or joint venture or acquire stakes in them, provided that the terms contained in articles VI and VII of these Regulations, should be available for him.
Fifth: licensing procedures.
Article IX:
The Authority shall prepare an Investment Guide includes a description of the procedures for obtaining permanent or temporary licenses, and their amendments thereto, and the forms and documents that must be submitted before obtaining the license and the information needed by an investor in addition to the presentation of the incentives, benefits and guarantee to be enjoyed by the foreign investor, also the Guide would include adequate information about the following:
1. Foreign Investment Law and its implementing regulations and the complementary resolutions.
2. The Rules of the General Authority for Investment and its implementing regulations.
3. The System of non-Saudis acquiring and investing a property.
4. The System of protecting and promoting the national industries.
5. The Labor and workmen Law and the Social Insurance System.
6. The systems of zakat, taxation and customs.
7. Islamic Court Law.
8. Law of Criminal Procedures.
9. Attorneyship Law.
10. Companies Systems (CR, Anti- commercial fraud, Banking Control).
11. Systems of Intellectual Property Protection (trademark system, system of copyright protection, and Patent System).
12. Residency System.
The Guide should devote a special part for the social customs in the Kingdom, and this Guide to be updated periodically.
Article X:
Applications for licenses of foreign investment to be submitted to the Application Reception Unit at the center, on the prescribed form, which should satisfy the data and documents mentioned in the Guide of investment, and to be signed by the applicant or his agent. The center will give the applicant a written or electronic receipt note including the number and date of the application.
Article XI:
The Authority may accept the applications for licenses received completely by mail or e-mail or fax, and then issue a resolution for the license, but it should not be handed over only after obtaining the original documents in cases that require that.
Article XII:
Decisions would be taken about the applications submitted in accordance with the rules and regulations, and in accordance with the decisions issued by the Board of Directors. The license decree would be issued by signature of the Governor or his authorized representative, within thirty days, the official holidays would not be counted within the mentioned period.
Article XIII:
The center informs the investor about the final decisions issued on his request, either by direct delivery or by registered mail, or by e-mail or by any other means.
Article XIV:
If the authority has rejected the application or the amendment, its rejection should be attached with reasons, the foreign investor is entitled to object to the Board of Directors within thirty days from the date of notification of the rejection decision.
Article XV:
The Board of Directors will consider the objection and decided upon that within thirty days from the date of submission, and if its decision with rejection, the applicant is entitled to appeal to the Bureau of Grievances within sixty days from the date of notification of the decision.
sixth: Obligations of the Foreign Investor
Article XVI:
The investor who has got the license should start with the procedures and the necessary executive steps for exercising the investment activity in accordance with the timetable submitted by him to the authority, and the authority, if the investor expressed reasonable grounds preventing him from the executive steps to exercise the activity, may extend the period specified in this table for a period or periods not
exceeding a year as a whole, this period can not be extended for more than a year, except by a decision of the board of directors.
Article XVII:
In cases where the authority does not approve the requests for extension of the time period specified in the timetable, and cases prove the lack of seriousness of the investor after the extension of this period, then the Board of Directors may revoke the license permanently and the investor will bear the consequences of cancellation.
Article XVIII:
The licensed institutions should comply with the conditions and the basic purposes of their license, adding any amendment is not allowed without the consent of the authority.
Article XIX:
The owners of the licensed institutions should follow certified accounting system for their institutions and certified budget as well by a licensed accounting offices, and provide what the authority may request of statistics and data about that.
Seventh: Violations
Article XX:
The staff of the authority in charge, who are assigned by the Governor in writing or by his representative, the right to follow up the implementation of the provisions of the rules and regulations, for that purpose, they have the right to access books, documents and all papers relating to the activities and detect the violations and prepare records and provide the necessary reports to the Governor or his
representative. And the mentioned staff in charge of these tasks should maintain the confidentiality of information and documents which they have accessed.
Article XXI:
The Board of Directors shall issue a list of violations and penalties related
to violating the provisions of the rules, regulations, licensing conditions and rules of application and the application of penalties contained therein.
Article XXII:
The authority shall notify in writing the foreign investor when violating the provisions of this law and Regulation and the terms of the license, and would give him a period of time determined by the list of violations and penalties to remove the violation, if he did not do that, the penalties stipulated in the list of violations and penalties would be applied.
Article XXIII:
The Board of Directors would constitutes a committee composed of at least three members, one of them would be chartered counsel, and set rules and procedures for the conduct of its work, and its task is to consider the violations of the provisions of the law and its implementing regulations and licensing conditions. The Committee would hear the sayings and the defender of the violators, and suggest the
appropriate actions according to what is specified in the law and the list of
violations and penalties, and the penalty decision would be issued by the Board of Directors.
Article XXIV:
The investor, who passed on him the penalty decision in accordance with Article XXIII, may object at the Board of Directors within thirty days from the date of notification of the decision.
Article XXV:
The Board of Directors will consider the objection and would take a final decision within thirty days from the date of submission, and if the decision leads to
approving the punishment, the investor may appeal to the Bureau of Grievances within sixty days from the date of notification of the decision.
Eighth: Committee of Disputes Settlement.
Article XXVI:
The Board of Directors, in accordance with the second paragraph of Article XIII of the law, would establish a Committee composed of a chairman and at least two members to be called (Committee for the Settlement of Investment Disputes), to consider disputes that arise between the foreign investor and his Saudi partners regarding investing issues licensed under this law, the committee would work to settle the dispute amicably, If this is not possible, then it will resolve the conflict once and for all by arbitration in accordance with the arbitration system issued by the Royal Decree No. (46) dated 12/07/1403 AH, and its implementing regulations, this committee is intended originally to settle the dispute set forth in the arbitration system.
