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Saudi Arabia: Parliament Approves New Type of Residency Permit to Promote Foreign Investments

(July 16, 2019) On May 15, 2019, Saudi Arabia’s Consultative Council approved a law establishing a new residency system to enable investors to reside in the country. Following parliamentary approval, the new law was referred on the same day to the Saudi cabinet—the Council of Ministers—which approved the law after reviewing the Consultative Council’s decision and the recommendation of the Council of Economic and Development Affairs. (Cabinet Approves Special Privilege Iqama Law, SAUDI GAZETTE (May 15, 2019).)

Provisions of the New Law

The Law grants a special residency permit to qualified individuals who plan to invest in Saudi Arabia and allows them to bring their family members with them to reside in the country. Furthermore, such individuals have the legal right to own real estate in the kingdom and establish their own corporations. (Premium Residency to Stimulate Saudi Economy, Say Experts, SAUDI GAZETTE (May 15, 2019).)

The new residency permit has two forms: one that serves as a permanent residency permit and one that is renewable annually. The permanent residency permit is granted after the investor pays a lump sum of 800,000 Saudi riyals (SAR) (about US$213,000) to Saudi authorities. The annually renewable residency permit is granted after the investor pays SAR100,000 (about US$26,000). (Yasser Najdi, Benefits of the Special Residency Permit and Violations That Could Cause Its Suspension, SAPQ NEWS (June 23, 2019) (in Arabic).) The requirements for the new residency permit include a valid passport, adequate financial resources, a sound health report, and a certificate of no criminal record. (Cabinet Approves Special Privilege Iqama Law, supra.)

According to Ibrahim Al-Omar, the governor of the Saudi Arabian General Investment Authority (SAGIA), the newly established residency permit targets mainly investors and entrepreneurs, who will help the kingdom to enhance the economic growth of the private sector and build the economic foundation that will play a key role in the country’s future development. (New Residency Permit to Support Investment in Saudi Arabia, SAUDI GAZETTE (May 15, 2019).)

The Law establishes the Center for the Special Residency System, a government body designated to work on the new Law’s executive regulation, which reportedly is to be issued within 90 days from the date the new Law is issued. (Center for Special Residency: The Center Is in the Process of Preparing an Executive Regulation of the Law Within 90 days to Determine the Conditions and Procedures for Non-Saudis to Apply for the Special Residency Permit, SAUDI GAZETTE (May 15, 2019).)

Others Measures to Enhance Private Sector

In 2018, SAGIA launched a specialized entrepreneur license allowing international entrepreneurs to create 100% foreign-owned startup corporations in Saudi Arabia. According to SAGIA, this measure led to a 70% increase in the number of foreign corporations established in the kingdom. (Id.)

Local Reactions to Recent Measures

The Saudi Gazette has reported that economic experts in Saudi Arabia have endorsed the government’s recent measures to enhance foreign investment in the kingdom and believe that those measures will achieve the objectives of the kingdom’s “Vison of 2030” plan. These experts also claim that the new residency system is expected to bring in capital that will assist in developing medium and small enterprises and prevent the flight of domestic capital abroad. (Premium Residency to Stimulate Saudi Economy, supra.)