WT/TPR/S/256/Rev.1 Trade Policy Review 
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II. TRADE AND INVESTMENT REGIME 
(1) THE INSTITUTIONAL FRAMEWORK  
1. The Kingdom of Saudi Arabia is a monarchy.  Th e Government is headed by the King, who is 
also the commander in chief of the military.1  The King governs with the help of the Council of 
Ministers (Cabinet).2  The Council of Ministers is headed by the King who also holds the post of 
Prime Minister.  The Council of Ministers exercise s both executive and legislative powers, the latter 
with the assistance of the Consultative Council (Majlis Al-Shura).3  The Council of Ministers is also 
responsible for the internal, extern al, financial, economic, education, and defence policies, as well as 
the general affairs of the State.4  There are no political parties or national elections, although 
municipal elections were held in 2005 and 2011. 
2. The judicial system of Saudi Arabia is based on Shariaa (Islamic law) and the Basic Law of 
Governance.5  At the top of the judicial system is th e King.  The independence of the judiciary and 
judges is protected by the Constitution.  On 1 October 2007, the judicial system was reorganized dividing courts into:  (i) specialized courts of firs t instance (i.e. civil public courts, commercial courts, 
family courts, criminal courts and la bour courts);  (ii) courts of app eal;  and (iii) the Supreme Court.  
These courts are responsible for adjudicating all except administrative cases, which are the 
responsibility of the Board of Grievances.
6  Commercial courts are responsible for adjudicating 
disputes on trade-related matters;  their decision may be appealed before the courts of appeal and 
the Supreme Court.  The law also provides for alte rnatives to adjudicate comm ercial matters, such as 
arbitration.7 
3. Most policies, including trade policies, are fo rmulated and implemente d by means of legal 
instruments.  In terms of hierarchy, Shariaa is followed by Royal Decrees8, Royal Orders9, Council of 
Ministers Decisions10, Ministerial Decisions11, and Circulars.12  Draft legislation is prepared by the 
relevant government agency, which submits it to  the Council of Ministers and the Consultative 
Council for comments.  Both bodies review the draf t law and either agree with the text or propose 
changes.  If the Council of Ministers and the Cons ultative Council have divergent views on the draft 
                                                      
1 The King appoints the Crown Prince (second in line to the throne) to help him with his duties. 
2 The Council of Ministers is composed of 22 government ministries. 
3 The Consultative Council has 150 members who are appointed by the King for renewable four-year 
terms.  It proposes new laws and amends existing ones without prior submission to the King. 
4 Saudi Arabia is divided into 13 administrative regions or governorates, each with its capital and 
presided over by a Governor or Emir (appointed by the King), who oversees all its affairs (Royal Embassy of 
Saudi Arabia to Washington D.C. online informa tion.  Viewed at: http://www.saudiembassy.net). 
5 Royal Decree No. A/90, 1 March 1992 (27.8.1412H). Governance in Saudi Arabia derives its 
authority from the Holy Quran and the Sunna of his Prophet Mohammed. 
6 The Board of Grievances is an independent tribunal to which appeals may be made from all 
governmental administrative decisions.  The Board's decisions may be appeal ed to the Appeals Court within the 
Board of Grievances, which would either confirm or reverse decisions.  In all cases, the Appeal Commission's 
decisions are final and enforceable (WTO document WT/ACC/SAU/61, 1 November 2005). 
7 Under the Arbitration Law, arbitration is adjudicated  by the court that has original jurisdiction over 
the issue of the dispute (e.g. a commercial court for a trade dispute). 
8 Royal Decrees are issued by the King to enact primary legislation and amendments approved by the 
Council of Ministers, and to approve international treaties. 
9 Royal Orders are issued by the King and may address any matter. 
10 Council of Ministers Decisions promulgate implementing regulations to address particular matters 
raised under primary legislation, without a Royal Decree or Order. 
11 Ministerial Decisions are issued to make effective implementing regulations. 
12 Circulars are issued by ministries to clarify ru les/regulations pursuant to  a piece of legislation. The Kingdom of Saudi Arab ia WT/TPR/S/256/Rev.1 
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legislation, these are communicated to the King who has the final word.  All legal instruments are 
published in the Official Gazette (Umm Al-Qura );  they enter into effect on the date of publication 
unless a later date is specified. 
4. International  agreements enter into force as domestic laws following their ratification by 
Royal Decree and enactment by the Consultative Council and Council of Ministers.13  In general, 
conflicts or inconsistenc ies between international  agreements and treaties and other provisions of 
domestic law are resolved in accordance with the sa me rules of interpretation applied to domestic 
legislation, for example, more recent laws take precedence over older laws.14 
(2) TRADE POLICY FORMULATION AND IMPLEMENTATION  
5. The Ministry of Commerce and Industry (MCI) is responsible for trade-policy formulation 
and implementation, and c oordinates with other ministries and trade-related bodies, such as the 
Supreme Economic Council (headed by the King), a nd the Saudi Negotiating Team in charge of 
discussing and assessing WTO-related issues.15  The private sector provides inputs to trade policy 
formulation by communicating its views either directly to the MCI or through the chambers of commerce and industry.
16   
6. As a member of the Gulf Cooperation Counc il (GCC), Saudi Arabia has to harmonize its 
trade-related legislation with that of the other memb ers.  According to the au thorities, this has been 
achieved to a large extent.  At end 2010, seven GCC resolutions had been adopted by GCC member 
states covering, inter alia , customs union requirements, the extension of domestic treatment to all 
GCC nationals, customs-related issues, and  indus trial organization (section (4)(ii)(a) below).  
Saudi Arabia is a member of the monetary union w ith some GCC countries, i.e. Bahrain, Kuwait, and 
Qatar (Chapter I(1)).17 
7. Saudi Arabia's main trade-related laws and re gulations are presented in Table AII.1.  Its 
intellectual property rights legislation was reviewed by the WTO Council for TRIPS in 2007 (Chapter III(3)(iv)).
18  Saudi Arabia has notified the WTO that it had no national laws and/or 
regulations on anti-dumping practices19;  subsidies and countervailing measures20;  and safeguards 
                                                      
13 Article 70 of the Basic Law of Governance. 
14 Where its domestic laws or other acts are in  contradiction with international treaties or  agreements, 
Saudi Arabia would bring them into conformity with such treaties or  agreements, and would respond quickly if 
inconsistencies are brought to the attention of Saudi offi cials.  However, this does  not apply in respect of 
fundamental religious rules and principles, such as prohibiting the consumption of alcohol and pork (WTO 
document WT/ACC/SAU/61, 1 November 2005). 
15 The Saudi Negotiating Team is composed of representatives from: MCI, Ministry of Finance, 
Ministry of Economy and Planning, Ministry of Petroleum and Mineral Resources, Ministry of Agriculture, 
Ministry of Foreign Affairs, and Saudi Arabian Monetary Agency. 
16 Each Chamber, governed by a Board of Directors,  is a private association to which local businesses 
(including traders, professionals and industrialists) belong.  The Minister of Commerce and Industry appoints 
one third of the Directors;  the rest are elected by th e members.  There are curren tly fourteen chambers of 
commerce and industry, located in:  Abha, Ahasa, Dammam, Hail, Jeddah, Majama, Makkah, Medina, Najran, 
Qassim, Quariyat, Riyadh, Tabuk, and Taif. 
17 The agreement to establish the monetary unio n was signed in December 2008 and ratified in 
December 2009. 
18 WTO document IP/Q/1/SAU/1, 16 March 2007. 
19 WTO document G/ADP/N/1/SAU/1, 11 March 2009. 
20 WTO document G/SCM/N/1/SAU/1, 11 March 2009. WT/TPR/S/256/Rev.1 Trade Policy Review 
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(Chapter III(2)(vi))21;  it has adopted the GCC Common Law on Antidumping, Safeguards and 
Countervailing Measures (Chapter III(1)(v)). 
8. In general, investment in Saudi Arabia is regulated by the Commercial Agencies Law of 1962 
and its Implementing Regula tions of 1981.  Foreign investment, in particular, is governed by the 2000 
Foreign Investment Law and its Implementing Re gulations adopted in 2002 (section (5) below). 
(3) POLICY OBJECTIVES  
9. Under its Ninth Development Plan 2010-2014,  Saudi Arabia's main policy objectives, 
inter alia , are to:  accelerate its development in orde r to achieve increased and balanced economic 
growth throughout the country;  create more em ployment opportunities for all Saudi nationals;  
improve living standards and quality of life;  dive rsify the economy away from oil, while preserving 
the environment and its natural resources;  strengthe n the role of the private sector through various 
investment (domestic and foreign) projects;  in crease the participation of  small and medium-size 
enterprises;  enhance competitiven ess in the global economy;  and further promote GCC and Arab 
integration (Chapter I(4)).22 
10. Saudi Arabia recognizes the importance of trade and investment liberalization to achieve its 
policy objectives.  It is in favour of trade libera lization through the multilateral framework.  It also 
believes that its WTO membership sends a strong me ssage to potential foreign investors about its 
commitment to a rules-based system.  At the same  time, it is pursuing regional agreements, such as 
the GCC and the Pan Arab Free Trade Area (PAFTA), because it is of the opinion that regionalization 
would help rather than hinder the globalization of the world economy.   
11. A sound economic environment is considered key to attracting local and foreign capital, and 
diversifying the Saudi economy.  To this end,  structural reforms are under way, including a 
privatization programme (Chapter III(3)(iii)).  Mo reover, the Government is promoting local and 
foreign investment, particularly in energy;  tran sport and logistics;  information and communication 
technologies;  health;  life sciences;  education;  and tourism (section (5) below).23 
12. The authorities are implementing a strategy to share Saudi Arabia's oil and gas wealth 
between current and future generations.  Four " economic cities" are under construction to promote 
economic diversification, to create 1.3 million j obs, and homes for 2.4 million residents by 2020, 
improve education and health servi ces, and modernize the infrastructur e.  These cities are expected to 
contribute about US$150 billion to Saudi Arabia's GDP during the next 25 years.24  O t h e r  m a j o r  
developments include:  upgrading the international airports in Jeddah, Medi na, and Tabuk at a total 
cost of US$11.3 billion;  and finalizing the first st age of the US$5.9 billion development of the Jubail 
industrial city (phases 2 and 3 are expected to be completed by 2023). 
                                                      
21 WTO document G/SG/N/1/SAU/1, 11 March 2009. 
22 Ministry of Economy and Planning (undated). 
23 Saudi Arabia has set itself three strategic targets:  to become the global capital of energy;  to act as a 
transport and logistical hub between Ea st and West;  and to transform its knowledge-based industries, i.e. health 
care, education, and information technology (Saudi Arabian General Investment Authority online information.  
Viewed at:  http://www.sagia.g ov.sa/en/Why-Saudi-Arabia). 
24 Saudi Arabia plans to spend US$60 billion in the fo ur economic cities.  The largest, King Abdullah 
economic city, will include the region's largest seaport, and an industrial zone covering 40 million square meters 
for industrial and light manufacturing facilities.  The Prince Abdulaziz bin Mousaed economic city is being designed around transportation and related logistical se rvices.  The economic city in Medina will include a 
technology and knowledge-based industri es zone.  The economic city in Jizan will include an industrial zone, an 
energy/desalination plant, and a seaport (Saudi Arabia n General Investment Authority online information.  
Viewed at:  http://www.sagia.gov.sa/ en/Why-Saudi-Arabia/Economic-cities). The Kingdom of Saudi Arab ia WT/TPR/S/256/Rev.1 
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(4) TRADE AGREEMENTS  
(i) WTO 
13. Saudi Arabia deposited its instrument of ratification of accession and became a Member of 
the WTO on 11 December 2005.25  As part of its accession commitments, Saudi Arabia bound 100% 
of its tariff lines (Chapter III(1)(iii)(b)); made extensive commitments under the GATS 
(Chapter IV(4));  and became a signatory to the Information Technology Agreement (ITA).26  
Saudi Arabia has been an observer to the plur ilateral Government Proc urement Agreement (GPA) 
since December 2007, but has yet to begin nego tiations for membership (Chapter III(1)(vii)).27  To 
boost its participation in the WTO, Saudi Ar abia established its WTO Mission in June 2010. 
14. Saudi Arabia has not been involved directly in any disputes under the WTO Dispute 
Settlement Mechanism, but has participated as a third party in six cases:  (i) "United States – 
Definitive Anti-dumping and Countervailing Duties on Certain products from China"28;  (ii) "China – 
Measures Related to the Exportation of Various Raw Materials (complainant the United States)"29;  
(iii) "China – Measures Related to the Exportation of Various Raw Materials (complainant the EU)"30;  
(iv) "China – Measures Related to the Exporta tion of Various Raw Materials (complainant 
Mexico)"31;  (v) "Canada – Certain Measures Affecting the Renewable Energy Sector" and (vi) 
"China – Countervailing and Anti-Dumping Duties on Grain Oriented Flat-Rolled Electrical Steel 
from the United States".32 
15. Saudi Arabia's trade-related notifications to the WTO are presented in Table II.1.  Up to 
March 2011, Saudi Arabia had 15 outstanding notifications.33 
Table II.1 
Selected notifications to the WTO, 2011 
WTO Agreement Document symb ol and date Main content 
Agreement on Agriculture  
(Article 18.2)  
G/AG/N/SAU/3, 19 July 2010  
Export subsidies (Table ES:1) 
 G/AG/N/SAU/4, 19 April 2011 Domestic support (Table DS:1) 
Agreement on Technical Barriers to Trade  
(Article 15.2)  
G/TBT/ENQ/37, 15 June 2010  
Saudi Arabian Standards Organization 
(SASO) as the enquiry point 
G/TBT/CS/2/Rev.16, 1 February 2010 Acceptance of code of good practice 
Agreement on Trade-Related Aspects of Intellectual Property 
 (Article 63.2) IP/N/1/SAU/I/1, 14 November 2006 
IP/Q-Q4/SAU/1, 16 March 2007 TRIPS-related legislation 
Review of legislation: responses from 
Saudi Arabia 
Agreement on Anti-Dumping Practices  
(Article 18.5)  
G/ADP/N/1/SAU/1, 11 March 2009  
Acts and regulations relevant to the 
Agreement 
(Article 16.4) G/ADP/N/195/Add.1, 21 April 2010 Semi-Annual Report on Anti-Dumping 
Actions 
Table II.1 (cont'd) 
                                                      
25 WTO documents WT/LET/503, 14 December 2 005;  and WT/LET/510, 13 February 2006. 
26 WTO document G/IT/1/Rev.42, 29 June 2010. 
27 WTO online information. Viewed at:  http://www .wto.org/english/tratop_e/gproc_e/memobs_e.htm. 
28 WTO document series WT/DS379. 
29 WTO document series WT/DS394. 
30 WTO document series WT/DS395. 
31 WTO document series WT/DS398. 
32 WTO document series WT/DS414. 
33 WTO online information.  Viewed at:  h ttp://stat.wto.org/CountryProfiles/SA_e.htm. WT/TPR/S/256/Rev.1 Trade Policy Review 
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WTO Agreement Document symb ol and date Main content 
Agreement on Rules of Origin  
(Article 5.1 and Annex II)  
G/RO/N/48/, 8 November 2006  
Preferential and non-preferential rules of origin 
Agreement on Subsidies a nd Countervailing Measures  
 (Article 32.6) G/SCM/N/1/SAU/1, 11 March  2009 Acts and regulations relevant to the 
Agreement 
(Article 25.11) G/SCM/N/203/Add.1, 22 April 2010 Semi-Annual Report on countervailing 
duty actions 
Agreement on Import Licensing (Article 7.3)  
G/LIC/N/3/SAU/1, 18 October 2006  
Replies to the questionnaire on import 
licensing procedures 
Agreement on Customs Valuation  
(Article 22.2)  
G/VAL/N/1/SAU/1, 6 February 2007  
Acts and regulations relevant to the 
Agreement 
 G/VAL/N/2/SAU/1, 8 January 2007 Implementation  and administration of 
the Agreement 
 G/VAL/N/3/SAU/1, 8 January 2007 Information on the application of 
Decisions A.3 and A.4 
Agreement on the Application of Sanitary and Phytosanitary Measures  
(Article 7, Annex B) G/SPS/N/SAU/8, 16 December 2010 Emergency measures 
(Paragraph 3 of Annex B) G/SPS/ENQ/ 25, 15 October 2009 Enquiry point 
Agreement on Safeguard Measures  
(Article 12.6)  
G/SG/N/1/SAU/1, 11 March 2009  
Acts and regulations relative to safeguard measures 
Agreement on Pre-Shipment Inspection 
(Article 5)   
G/PSI/N/1/Add.11, 24 June 2008  
Acts and regulations relative to pre-
shipment inspection 
Agreement on Trade-Relate d Investment Measures 
(Articles 5.1 and 6.2)  G/TRIMS/N/1/SAU/1/, 13 October 2006 
G/TRIMS/N/2/Rev.20, 3 September 2010 Saudi Arabia does not apply any TRIM 
inconsistent with the Agreement and has no publications 
State Trading Enterprises 
(Article XVII:4 (a)) 
and Understanding on the Interpretation  of Article XVII:1  
G/STR/N/12/SAU, 11 March 2009  
New and full notification that Saudi Arabia does not maintain any state trading enterprises 
General Agreement on Trade in Services 
  
S/ENQ/78/Rev.12, 22 December 2010  
Contact and enquiry point  
Source : WTO Secretariat. 
16. Saudi Arabia grants at least most-favoured-nation (MFN) treatment to all its trading partners.  
It has an interest in a wide range of issues in the DDA negotiations, including trade and environment, 
rules, trade facilitation, non-agricultural market ac cess (NAMA), and services.  Saudi Arabia is taking 
part in the "recently-acceded members" (RAMs) Gr oup and is a Member of the WTO Arab Group.  
The authorities believe that they made extensiv e commitments during their WTO accession process 
and are calling for additional flexib ilities to be granted to the RAMs in the DDA.  Saudi Arabia 
believes that all Members stand to make substa ntial gains from the DDA and strongly supports any 
efforts to bring the negotiations to a successful c onclusion as soon as possible.  It has suggested that 
Members could raise the level of ambition by accep ting ambitious commitments like those undertaken 
by RAMs.  It has stressed that core WTO benefits, i. e. legal certainty, and transparent and fair rules of 
mutual benefit, should be at the forefront of Me mbers' thinking in moving  the DDA to a conclusion. 
(ii) Regional agreements 
(a) Gulf Cooperation Council (GCC) 
17. The GCC was created on 25 May 1981 by Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and 
the United Arab Emirates.  The main objectives of the GCC are regional cooperation and integration 
in all economic, social, and cultural affairs, includi ng trade, industry, investment, finance, transport, The Kingdom of Saudi Arab ia WT/TPR/S/256/Rev.1 
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communications, and energy.  Its specific objectives are to achieve a common market, with equal 
treatment of GCC citizens (now about 40 million), in each member country, in respect of freedom of movement, work, residence, ownership of real esta te, movement of capital, as well as financial and 
monetary coordination.
34  In December 2009, Bahrain, Kuwait, Qatar, and Saudi Arabia ratified an 
agreement to establish a monetary union.  The date for introduction of a single currency is yet to be 
determined (Chapter I(1)).35 
18. The GCC member states set up a free-trade area in 1983, whereby originating goods have 
been exempt from customs tariffs.  The Unifie d Economic Agreement among the GCC countries was 
notified on 15 August 1984.  The GCC customs union was originally notified by Kuwait under the 
Enabling Clause.  Following its accession to the WT O, Saudi Arabia notified the Agreement under 
Article XXIV of the GATT (as a condition of its accession to the WTO).  On 6 October 2009, the 
GCC Agreement was re-notified under Article XXIV:7(a) of the GATT 1994. 
19. Since January 2003, the GCC states have operated the common external tariff (CET) 
(Chapter III(1)(iii))36;  and the GCC Common Customs Law of 2003, which is implemented in 
Saudi Arabia under Royal Decree No. 41 of 3.11.1 423H (6 January 2003) (Chapter III(1)(i)).  On 
1 January 2008, the members of the GCC also formed a common market, allowing the free movement 
of services between the members.  This aspect of the GCC Agreement (i.e. agreement in services) is 
yet to be notified to the WTO. 
20. The overall average MFN tariffs of most GCC members before 2003 were close to the 5% 
CET.  Nonetheless, certain adjustments were re quired: Kuwait, Qatar, and the UAE had overall 
average applied MFN tariffs that were below 5%  before 2003;  whereas Bahrain, Oman, and 
Saudi Arabia needed to reduce their tariffs to comp ly with the CET.  Initially, a transition period of 
three years was envisaged to complete the CET alignment (31 December 2005), but this has been 
extended until end 2011.  Thus, while all the memb ers apply the 5% CET on most imports, certain 
differences remain (e.g. on alcohol products).  In addition, customs checks between GCC members 
are maintained for security and other reasons (e.g . statistics, and to avoid piracy and commercial 
cheating).  Prohibited goods may not circulate between members' territories;  restricted products may 
transit the territory of members who restrict their import, presumably with the appropriate documentation. 
21. Although tariffs seem to have been harmonized  at the GCC level for the most part, its 
members are still in the process of reaching agreem ent on some important issues, including on how to 
allocate customs revenues from applied tariffs.  Full implementation of the customs union is expected 
to take place by end 2015.
37 
22. As a group, the GCC has concluded free-trad e agreement (FTA) negotiations with the 
European Free Trade Association (EFTA) states38, and Singapore;  according to the authorities, these 
two FTAs will be notified to the WTO after ra tification.  In 2009, New Zealand-GCC FTA 
negotiations were concluded (FTA is  not yet signed).  The GCC is involved in trade negotiations with 
                                                      
34 GCC online information.  Viewed at:  http://www.gcc-sg.org/index_e.html. 
35 Oman and the United Arab Emirates are not joining the monetary union. 
36 Certain "essential" products (e.g. live animals, meat , fish, vegetables, fruit, cereals, medical supplies, 
books, newspapers and magazines, ships, and commercial aircraft) are exempt from customs tariffs.  The other 
exceptions to the 5% CET relate to tob acco, which is subject to a tariff rate of 100% (or a specific rate of duty, 
whichever is higher) and imports of pork and alcohol products, which are either prohibited (including domestic 
production) or subject to high rates of duty. 
37 Decision taken by the GCC Suprem e Council at the end of 2010.   
38 The EFTA states are:  Iceland, Liechtenstein, Norway, and Switzerland. WT/TPR/S/256/Rev.1 Trade Policy Review 
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Australia, China, the EU, India, Japan, Korea (R ep. of), MERCOSUR, Pakistan, and Turkey.  In 
addition, the GCC has received requests for negotiations, inter alia , from the Association of South-
East Asian Nations (ASEAN); Azerbaijan;  Co mmon Market for East and Southern Africa 
(COMESA);  Georgia;  Hong Kong , China;  Peru, and Ukraine.39  The GCC is negotiating these FTAs 
as a group.  However, some GCC members (e.g . Bahrain and Oman) also  have FTAs on an 
individual basis, notably with the United States.40 
(b) Pan Arab Free-Trade Area (PAFTA) 
23. The Pan Arab Free-Trade Area (PAFTA) Treaty41 was signed on 19 February 1997 and 
entered into force on 1 January 1998.  Under the PAFTA, almost all trade barriers among its members 
were eliminated as of 1 January 2005, with some  products excluded from liberalization.  The treaty 
also provides for rules of origin (Chapter III(1)(ii)), and more recently efforts are being made to include trade in services.  The principal entity responsible for implementing the programme is the 
Economic and Social Council of the League of Arab States.  According to the latest available figures, 
trade among PAFTA members increased from US$12. 9 billion in 1998 to US$60.9 billion in 2007.
42 
The PAFTA was notified to the WTO by Saudi Arabia in 2006.43 
(iii) Other preferential arrangements 
24. Saudi Arabia currently benefits from prefer ential access to the EU market under the EU's 
Generalized System of Preferences (GSP).  It does not have any bilateral free trade agreements, and 
does not participate in the Global System of Tr ade Preferences (GSTP) among developing countries. 
(5) INVESTMENT FRAMEWORK  
25. The promotion of private-sector (foreign and dom estic) investment is an important part of 
Saudi Arabia's economic programme, in order to di versify its economy away from oil, foster GDP 
growth, and create job opportunities for its young labour  force.  Saudi Arabia is promoting local and 
foreign investment in most economic activities, pa rticularly energy;  transport and logistics;  
information and communication technologies;  health;  life sciences;  education;  and tourism.  
26. Under the Foreign Investment Law of 2000 and its Implementing Regulations of 200244, 
foreign investment may take the form of an en terprise owned by foreign and national investors 
(i.e. joint-ventures but with no requirement for minimum share for national investors);  or an enterprise wholly owned by foreign investors (i.e. 100% foreign equity).  Foreign investment projects benefit from all of the incentives and pr ivileges offered to local projects. 
                                                      
39 In September 2010, the GCC decided to put its negotiations on hold until the completion of a 
feasibility study to better perform in current and future negotiations. 
40 The Saudi authorities indicate that these FTAs with the United States were concluded before GCC 
countries decided to negotiate all future FTAs as a group. 
41 The PAFTA members are:  the GCC countries plus Egypt, Iraq, Jordan, Lebanon, Libya, Morocco, 
Palestinian Authority, Sudan, Syria, Tunisia, and Yemen. 
42 Data provided by the Arab Monetary Fund.  
43 WTO document WT/REG223/N/1, 20 November 2006. 
44 The Foreign Investment Law was promulgated by Royal Decree No. M/1, 5/1/1421H (9 April 2000), 
replacing the 1979 Foreign Capital Investment Law, while the Implementing Regulations were issued on 
24 June 2002.  For a comparison between the Foreign Investment Law of 2000 and the 1979 Foreign Capital Investment Law, see WTO document WT/ACC/SAU/61, Annex B, 1 November 2005. The Kingdom of Saudi Arab ia WT/TPR/S/256/Rev.1 
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27. GCC nationals are treated as Saudi nationals for the purposes of investment.  Companies or 
citizens from GCC countries may currently own land (except real estate investment in Makkah and 
Madina) and engage in internal tr ading and distribution activities.   
28. The Foreign Investment Law permits foreigners to  invest in all sectors of the economy, except 
for activities on the Negative List (Table II.2), which includes fisheries;  oil exploration, drilling and 
production;  and various services subsecto rs.  The list is periodically revised  and is subject to the 
approval by the Supreme Economic Council.45 
Table II.2 
Economic activities in which foreign  investment is not permitted, 2011 
Manufacturing 
 Oil exploration, drilling, and production, except mining services listed at 5115 and 883 in Internationa l Industrial Classific ation Codes 
 Manufacturing of military equi pment, devices, and uniforms 
 Manufacturing of civilian explosives 
Services 
 Catering to military sectors 
 Security and detective services 
 Real estate investment  in Makkah and Madina 
 Tourist orientation and guidance se rvices related to Hajj and Umrah 
 Recruitment and employment services, including local recruitment offices 
 Real estate brokerage 
   Printing and publishing, except:  - Pre-printing services interna tionally classified at CPC 88442 
 - Printing presses internationally classified at CPC 88442 
 - Drawing and calligraphy intern ationally classified at CPC 87501 
 - Photography internationa lly classified at CPC 875 
 - Radio and television broa dcasting studios internationa lly classified at CPC 96114 
 - Foreign media offices and correspondents internationally classified at CPC 962 
 - Promotion and advertising inte rnationally classified at CPC 871 
 - Public relations internati onally classified at CPC 86506 
 - Publication internationa lly classified at CPC 88442 
 - Press services internationally classified at CPC 88442  - Production, selling and renting of computer so ftware internationally classified at CPC 88 
 - Media consultancies and studies in ternationally classified at CPC 853 
 - Typing and copying internationally  classified at CPC 87504 and 87904 
 - Motion picture and video tape  distribution services internationally classified at CPC 96113 
 Commission agents internationally classified at CPC 621 
 Audio-visual and media services  Land transportation services, excluding intercity passenger transport by trains 
 Services provided by midwives, nurses, phy sical therapy services, and quasi-doctoral se rvices internationally classified at CP C 93191 
Other 
 Fisheries 
 Blood banks, poison centres, and quarantines 
Source : Information provided by the Saudi authorities. 
29. Any foreign investor has the right to transfer out of Saudi Arabia their share derived from 
selling their equity or profits, as well as any am ounts required for the settlement of contractual 
obligations pertaining to the project.  There is a fl at 20% tax rate on profits;  losses may be carried 
forward;  and there are no taxes on personal income.  Investments related to the foreign investor will 
not be confiscated without a court order.  They ma y not be subject to expropriation except for reasons 
of public interest and in exchange for an equita ble compensation according to regulations.  A foreign 
facility licensed under the Foreign Investment Act is  entitled to own any real-estate for practicing the 
licensed activity and for the housing of staff.  The Real-Estate Regulation allo ws foreign investment 
in real-estate worth SAR 30 million or more. 
                                                      
45 During its WTO accession, Saudi Arabia noted th at it would review and remove additional items 
from the Negative List each  year (beyond its WTO commitments) to  further liberalize the economy (WTO 
document WT/ACC/SAU/61, 1 November 2005). WT/TPR/S/256/Rev.1 Trade Policy Review 
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30. In 2000, the Council of Ministers established th e Saudi Arabian General Investment Authority 
(SAGIA) as a one-stop shop to provide information and assistance to foreign investors, and to foster 
investment opportunities in Saudi Arabia.  SAGI A operates under the umbrella of the Supreme 
Economic Council, and its duties include formulatin g government policies on investment activities;  
proposing plans and regulations to enhance the inve stment climate in Saudi Arabia; and evaluating 
and licensing investment proposals. 
31. Other entities that actively promote investment  opportunities in Saudi Arabia, include the 
majority-government-owned Saudi Arabian Basi c Industries Corporation (SABIC), the Saudi 
Industrial Development Fund (SID F) and Saudi Arabia Industrial Property Authority (MODON).  
Private investment companies that have promoted opportunities in Saudi Arabia's industrial cities and 
other regions, include National Industrializati on Company, Saudi Venture Capital Group, Saudi 
Industrial Development Company, Royal Co mmission for Jubail and Yanbu, and Arriyadh 
Development Authority.46  
32. All foreign investment has to be approved by  SAGIA, except for activities on the Negative 
List or where the authority to license is assigne d to an agency other than SAGIA, such as the 
Saudi Arabian Monetary Agency (SAMA), the Capital Market Authority (CMA), the Communication 
and Information Technology Commission (CITC) or the Presidency of Meteorology and Environment 
(PME).  Saudi (and GCC) investors do not require to obtain a licence from SAGIA to invest.  The requirement for SAGIA approval for foreign investment  is a national treatment limitation inscribed in 
Saudi Arabia's Schedule on Specific Commitments in Services.
47   
33. Foreign investors may obtain more than one li cence in diverse activities, provided they are 
not the owner of or a shareholder in a project that is  in financial default.  SAGIA set up an Investor's 
Service Centre (ISC) to issue li cences to foreign companies, provide support services to investment 
projects, offer detailed information on the inv estment process, and coordinate with government 
ministries in order to facilitate investment proce dures.  The ISC must decide to grant or refuse a 
licence within 30 days of receiving an applicati on and supporting documentation from the investor. 
34. A petition against any penalty may be brought by the investor before the Board of 
Grievances.  Possible penalties include:  withholding incentives offered to the foreign investor;  a fine 
not exceeding SAR 500,000;  and cancelling the licen ce in case of a continuing violation and after 
written notification by SAGIA to rectify th e violation within a specified period. 
35. Saudi Arabia has signed bilateral investment tr eaties with:  Austria, Azerbaijan, Belarus, 
Belgium, Czech Republic, China, Egypt, France, Germ any, India, Indonesia, Italy, Korea (Rep. of), 
Malaysia, Philippines, Singapore, Spain, Sweden, Switzerland, Chinese Taipei, Turkey, Ukraine, and 
Viet Nam.48  Saudi Arabia is a member of the Mu ltilateral Investment Guarantee Agency.  
Saudi Arabia has also signed agreements for th e avoidance of double taxation and the prevention of 
tax evasion with:  Austria, Bangladesh, Belarus, Ch ina, France, Greece, India, Italy, Japan, Korea 
(Rep. of), Malaysia, Netherlands, Pakistan, Russian Fe deration, Singapore, South Africa, Spain, Syria, 
Tunisia, Turkey, United Kingdom, and Uzbekistan. 
 
 
                                                      
46 United States Department of State online information.  Viewed at:  http://www.state.gov/e/eeb/ 
ifd/2008/101779.htm. 
47 WTO document WT/ACC/SAU/61, 1 November 2005. 
48 UNCTAD online information.  Viewed at:  h ttp://www.unctad.org/sections/dite_pcbb/docs/ 
bits_saudi_arabia.pdf.