The evolving Saudi Arabia Foreign Investment law framework: Does the current law ensure that Foreign Direct Investment (FDI) is secured by the Kingdom in a competitive global market?

Abstract

In the approaching mid 21st century period, it seems likely that States’ ability to attract, secure, and maintain greater levels of foreign investment (both direct (FDI) and indirect forms) will be crucial to their future overall economic destinies. The Kingdom of Saudi Arabia (KSA) was traditionally regarded as a place where FDI was not necessarily welcomed, given its significant oil industry wealth and laws that were not foreign investor friendly. The KSA position has demonstrably changed in recent years, as the Kingdom senior leadership has realised that it cannot diversify the national economy and create greater opportunities for its large, and still growing youth a young adult employment demographic, unless it can encourage foreign investors to enter the KSA economy. For this reason, the five Chapter dissertation presented here in critical discussion form poses the following research questions. These are: (1) the extent to which current KSA domestic law influences overall KSA desirability within the global investment community for FDI; (2) whether these laws effectively align with prevailing foreign investor expectations concerning what ‘foreign investment-friendly host States’ offer as FDI safeguards; and (3) what, if any KSA law reforms will enhance overall Kingdom FDI destination attractiveness, whilst preserving the Kingdom’s sovereign rights to oversee and control all investment operations within KSA. The various discussion points developed in Chapters Two through Four tend to confirm the Chapter Five conclusions that the Kingdom’s innovative Vision 2030 program has successfully contributed to greater overall FDI than was evident when the KSA Foreign Investment Law 2000 was first enacted. There are some significant qualifications provided with this conclusion, ones that are based on how KSA bilateral and multilateral investment treaties as understood in International Investment Law (IIL) are fully appreciated. Selected investor host State dispute settlement cases (ISDS), academic commentaries, and high-level international reports each contribute to this conclusion Chapter Five opinion.