Saudi Arabia - Country Commercial Guide
Investment Climate Statement

This information is derived from the State Department's Office of Investment Affairs, Investment Climate Statement. Any questions on the ICS can be directed to

Last published date: 2019-10-13

The Saudi Arabian government (SAG) has embarked upon an ambitious series of socio-economic reforms, collectively known as “Vision 2030.”  Aimed at diversifying the Saudi economy, creating more private sector jobs for a growing population, improving government finances and services, and creating entertainment and tourism opportunities for the Saudi populace, Vision 2030 contemplates the development of entirely new economic sectors and a significant transformation of the economy in general.  Spearheaded by Crown Prince Mohammed bin Salman, the reform program seeks to transition from Saudi Arabia’s traditional, government-led economic growth model to a one driven by the private-sector.  In connection with these ambitious plans, the SAG seeks to expand and sharpen the country’s knowledge base, technical expertise, and commercial competitiveness.  To help accomplish these goals, Saudi Arabia seeks increased foreign investment.

During 2017, the SAG took several positive steps to improve the investment climate in the Kingdom.  The SAG moved forward with plans to privatize many state-owned entities across a range of sectors, including transportation, education, energy, and healthcare, albeit at a gradual pace.  The SAG also continued to ease requirements for foreign investors trading on Saudi Arabia’s stock exchange, the Tadawul (though foreign investment still comprises a small percentage of the local stock market).  Preparations continue for an initial public offering of up to 5 percent of Saudi Aramco’s shares; the shares are likely to be listed on the Tadawul and may also be listed on a major international exchange.  Further, the SAG has sought to attract foreign investment in entirely new sectors, including renewable energy, entertainment, and waste management.   The SAG also seeks to increase the participation of women in the workforce; a royal decree to permit women to drive starting in 2018 is expected to ease some transportation challenges previously cited as barriers for women’s entry into the labor market.

At the same time, the SAG has regressed in several key areas affecting the investment climate in the Kingdom.  Over the past year, certain U.S. pharmaceutical companies have alleged that the SAG violated their intellectual property rights and the confidentiality of their trade data in licensing local firms to produce competing pharmaceuticals.  The use of unlicensed U.S. software, including on SAG computer systems, has continued unabated.  The detention of prominent Saudi businessmen during an anti-corruption campaign launched in November 2017 introduced uncertainties into the business climate.  Furthermore, economic pressures to generate non-oil revenue and provide more jobs for Saudi citizens have prompted the SAG to implement measures that may prove harmful to the country’s investment climate, including significant fee hikes for business visas, new taxes, higher prices for fuel and utilities, increased fees for expatriate workers, tighter labor quotas, and more stringent localization polices.  Recent examples, which went into effect on January 1, 2018, include:  doubling residential electricity rates; increasing the price of gasoline by more than 80 percent; collecting an across-the-board value-added tax (VAT) of five percent; and charging employers a monthly fee for each expatriate worker they employ.  Additionally, the SAG has signaled its intent to introduce new local content requirements for foreign firms in a bid to stimulate domestic manufacturing, create jobs for Saudi nationals, and transfer technology and know-how.

Foreigners are permitted to invest in all sectors of the economy, except for specific activities contained in a “negative list” that currently precludes foreign investment in three industrial sectors and 13 service sectors, among them upstream petroleum and real estate investment in Mecca and Medina.


Table 1




Website Address

TI Corruption Perceptions Index


57 of 180

World Bank’s Doing Business Report “Ease of Doing Business”


92 of 190

Global Innovation Index


55 of 127

U.S. FDI in Partner Country (USDM USD, stock positions)



World Bank GNI per capita