JEDDAH: Legal and regulatory reforms in Saudi Arabia have led to an unprecedented surge in foreign investment and applications for business licenses, the Ministry of Justice said on Tuesday.
Saudi Arabian General Investment Authority (SAGIA) data shows a 130 percent increase in the number of foreign investment licenses granted in Saudi Arabia in the first quarter of 2018 — 157 compared with 68 in the same period for the previous year.
In 2017, 377 new investment licenses worth SAR5.7 billion ($1.52 billion) were issued.
The ministry credits wide-ranging legal and regulatory reforms across the country for the increase surge. For example, foreign investors now have the right to 100 percent ownership of assets and businesses in the engineering, education and recruitment sectors. The time and effort required to secure a business license have also been drastically reduced.
The Kingdom’s commercial courts began operation in September 2017, with three dedicated courts in Riyadh, Jeddah and Dammam. In addition, specialist commercial chambers within existing public courts also opened in several cities, as did a number of appeals chambers.
In October 2017, at the official launch of the commercial courts system, Justice Minister and Chairman of the Supreme Judicial Council Waleed Al-Samaani highlighted the “paperless court” project, which is estimated to have reduced procedural bottlenecks by 45 percent.
He also noted that the ministry had shortened the execution lag of judicial orders from two months to just 72 hours, through the introduction of an e-link system that connects courts to related entities.
Commercial courts are set to be joined by specialist labor courts in early 2019. The Supreme Judicial Council has approved the establishment of courts in Riyadh, Makkah, Madinah, Buraidah, Dammam, Abha, and Jeddah, and 96 chambers across other cities, to serve the country’s 13-million-strong workforce.
The ministry expects the court system to invigorate the labor market, optimize the routing of skilled employees to key roles, further boost investment in the kingdom, and significantly assist the achievement of Vision 2030 objectives.
Al-Samaani also pointed to the Kingdom’s enforcement of foreign rulings, citing a decision in May 2018 that upheld that of a court in Virginia, US. A Saudi judge forced a nationally based tourism company to pay a US firm SAR14 million. Following the May ruling, such recoveries by Saudi enforcement courts surpassed $3.4 billion, with some 400 applications still pending.
“Saudi Arabia is looking to the future, to 2030 and beyond, to the next century, and the next millennium,” said Farraj Al-Dossary, head of commercial court in Riyadh.
“The Ministry of Justice has always taken the view that robust, reliable, pragmatic legal processes serve the continued prosperity of the nation. We are deeply proud of the enormous strides we have taken in our commercial courts and soon to be launched labor courts, as well as our e-link project that is eliminating paper and reducing legal-processing times across the Kingdom. We will continue to invest time and ingenuity to send a clear message that there has never been a better time to invest in Saudi Arabia.”