Saudi-Arabien Wirtschaftshandbuch Saudi Arabia Business ... - Ghorfa

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former state-controlled sectors are currently undergoing
deregulation. The private commercial development
of the production and sale of electricity is now possible
and has already been accomplished on a low scale in combination
with water desalination plants. In the telecommunications
field, shares of the Saudi Telecom have been
available for purchase on the Saudi stock exchange since
the start of 2003 and are highly popular among Saudi
private persons and investors.
A second private commercial license for GSM was issued
to the Etisalat that comes from the United Arab Emirates,
which had founded a public limited company in Saudi
Arabia for this purpose. The insurance sector was removed
from the negative list in 2004. This was closely tied
to the statutory regulations relating to the control of the
insurance sector governed by the Cooperative Insurance
Companies Control Law and its implementation regulations,
which came into effect in 2003 and May 2004.
The sales concepts of the contract dealer, i.e. wholesale
and retail, were finally struck off the negative list in March
2007. This was undertaken during the scope of commitments
that Saudi Arabia had entered into on becoming a
member of the WTO in December 2005. It remains to be
seen whether or not decisive changes will be completely
realised and a minimum domestic interest as stated in the
WTO declaration of commitment is realised. In the negotiations
prior to its entry to the WTO, Saudi Arabia
committed itself to opening up the commercial agency
and/ or wholesale sector gradually from a foreign capital
investment level of 51% to up to 75% within 3 years
of entering the WTO. However this would mean that the
foreign investor would need to invest at least 20 million
SR (approx. 3.6 million Euro).
The SAGIA located in Riyadh is the central authority
for licensing foreign investment projects in Saudi Arabia.
Also, SAGIA is responsible for promoting investment in
Saudi Arabia. As an incentive for this, it offers the foreign
investor its services as a “one-stop shop”. The foreign investor
thus also has access to employees of other relevant
authorities, such as e.g. the customs authorities, the labour
office, the immigration office, the Ministry of Trade
etc. all under SAGIA’s roof. SAGIA has set up so-called
investor service centres in Riyadh, Jeddah, Dammam and
Medina. For more information about SAGIA, please visit
the website www.sagia.gov.sa.
SAGIA must provide notification about a licence application
within 30 days after its date of receipt has been
documented by the authority. If the application is re-
jected, reasons need to be provided. If no notification is
given, the licence application is seen as approved. In all
cases, i.e. even if the application is approved, registration
with the Ministry of Trade and Industry is also necessary
to ensure entry into the commercial register. The project
only exists legally after it has been registered here.
the investment capital
The investment law differentiates between industrial, agricultural,
service and other projects. Originally there used
to be statutory minimum capital requirements that were
defined in Art. 5 No. 3 of the implementation regulations
of the investment law, however these have now been lifted
and there is no longer any prescribed minimum capital
requirements. In the past, the minimum capital for agricultural
projects was 25 million SR, for industrial projects
5 million SR and for service and other projects 2 million
SR. However in practice, the Saudi authorities still differentiate
between project types and specify the minimum
investment capital according to project type as follows:
– Service licence 500,000 SR for companies,
100 SR for individual investors
– Industry licence 1 million SR
– Trading licence 20 million SR
– Agricultural licence 25 million SR
– Real estate licence 30 million SR
Also, the investment capital is based on the respective size
of the project.
Furthermore there may also be minimum capital requirements
as a result of other mandatory statutory regulations.
For example, the minimum registered capital of a
Saudi limited company with a foreign capital interest is
500,000 SR. This corresponds to the registered capital
for limited companies that was stipulated by law in the
Saudi Companies Law up until July 2007. This was then
replaced with the ruling that the partners of the limited
company could define the amount of registered capital in
the company articles. However this ruling only applies to
limited companies that do not have any foreign capital.
This ruling serves to make the limited company as a legal
form more attractive.
the foreign capital ratio
The investment law specifically states that foreign companies
are allowed to invest in a project that is completely
owned by foreign capital. Also, it is possible to found joint
companies with Saudi partners. Accordingly, both com-