Article 3 of the Saudi Investment Law
المادة 3 من نظام الاستثمار
The article establishes the right of local and foreign investors to invest in any sector or activity open to investment, subject to Articles 8 and 9 and the relevant laws.
Official text (Arabic)
This article has not been amended since the law was issued.
دون إخلال بأحكام المادتين (الثامنة) و(التاسعة) من النظام، وما تقضي به الأنظمة ذات العلاقة، يحق للمستثمر الاستثمار في أي قطاع أو نشاط متاح للاستثمار.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 3 explained in plain English
This article sets the general rule of the Investment Law: an investor may invest in any sector or activity open to investment. Under the definitions in Article 1, "investor" includes both local and foreign investors, which is consistent with the objective in Article 2 of facilitating the establishment of investments and guaranteeing equality between them.
This right is not absolute, however. The article expressly limits it in three ways:
- Article 8 (the list of excluded activities): the competent authority issues a list of activities that are prohibited or restricted for the foreign investor, and the Ministry publishes it. Before investing in any activity on the list, and before any change in the ownership of an investment in the restricted activities, the foreign investor must submit an application for approval to the Ministry.
- Article 9 (protection of national security): the Ministry may suspend any foreign investment to protect national security, by a decision based on objective grounds, consistent with the Kingdom's international obligations and in accordance with the procedures in the Implementing Regulations.
- The relevant laws: any other law that sets conditions or requirements for a particular sector or activity remains applicable.
Article 4 follows and lists the investor's rights in its investment. In practice, a foreign investor should first check that the activity it wants is not on the list of excluded activities, or apply for approval if it is. A lawyer who specializes in foreign investment and commercial matters can help assess a specific activity.
Practical example
A foreign company wants to open a commercial business in Dammam. In principle it may invest in any activity open to investment, but it must first check the list of excluded activities published by the Ministry of Investment. If the activity is on the list, the company must apply to the Ministry for approval before starting.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 3 of the Saudi Investment Law
Can a foreigner invest in any activity in Saudi Arabia?
A foreigner may invest in any sector or activity open to investment, subject to the list of excluded activities in Article 8, the power of suspension to protect national security in Article 9, and the relevant laws.
What if the activity is on the list of excluded activities?
Under Article 8, the foreign investor must apply to the Ministry of Investment for approval before investing in it, and the Ministry refers the application to the competent authority.
Can a foreign investment be suspended after it has started?
Yes. Article 9 allows the Ministry to suspend any foreign investment to protect national security, provided the decision is based on objective grounds and follows the procedures in the Implementing Regulations.
Articles this article refers to
- Article 8
The article requires the competent authority to issue the list of excluded activities, which the Ministry publishes, and requires the foreign investor to seek approval before investing in them and before changing ownership in restricted activities.
1- تتولى الجهة المختصة إصدار قائمة الأنشطة المستثناة وتحديثها، وتقوم الوزارة بنشرها. 2- على المستثمر الأجنبي، قبل الاستثمار في أي من الأنشطة المحددة في قائمة ال
- Article 9
The article gives the Ministry of Investment the power to suspend any foreign investment to protect national security, by a decision based on objective grounds, consistent with international agreements and following the Implementing Regulations' procedures.
للوزارة الحق في إيقاف أي استثمار أجنبي لحماية الأمن الوطني، على أن يكون قرارها في الإيقاف مبنيًّا على أساس موضوعي وبما يتمشى مع التزامات المملكة بموجب الاتفاقيا
More articles on Investor Rights and Freedom to Invest
- Article 2
The article explains that the Investment Law aims to strengthen the competitiveness of the investment environment, support economic development and create jobs through an attractive investment climate.
يهدف النظام إلى تطوير وتعزيز تنافسية البيئة الاستثمارية في المملكة والمساهمة في التنمية الاقتصادية وخلق الفرص الوظيفية عن طريق توفير مناخ استثماري جاذب للاستثما
- Article 4
The article lists the investor's rights, such as equal treatment, fair treatment, no confiscation except by a final judgment and freedom to transfer funds, and requires authorities to observe them and the Ministry to provide information and services.
1- دون إخلال بما تقضي به الأنظمة ذات العلاقة، يتمتع المستثمر بالحقوق الآتية: أ- مساواته في التعامل مع المستثمرين الآخرين، والمساواة في التعامل بين المستثمر المح
- Article 5
The article requires every investor to comply with all laws and legislation in the Kingdom and with the Kingdom's obligations under the international agreements to which it is a party.
يلتزم المستثمر بالتقيد بكافة الأنظمة والتشريعات في المملكة، وبالتزاماتها بموجب الاتفاقيات الدولية التي تكون طرفًا فيها.
- Article 6
The article provides that investment incentives are granted by the competent authority according to objective, specific and fair eligibility criteria, and refers the provisions for implementing this to the Implementing Regulations.
دون إخلال بما تقضي به الأنظمة ذات العلاقة، يكون منح المحفزات الاستثمارية للمستثمر من الجهة المختصة وفقًا لمعايير استحقاق موضوعية محددة وعادلة، وتحدد اللائحة الأ
- Article 14
The article provides that the Investment Law does not prejudice the laws on specific economic activities or special economic zones, while the investor keeps a minimum of the rights set out in the law.
لا تخل أحكام النظام بالأنظمة الخاصة بالجهات الأخرى التي تسري على أنشطة اقتصادية محدَّدة، أو المناطق الاقتصادية الخاصة في المملكة، على أن يتمتع المستثمر بحد أدنى
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.