The first Law Update of 2024 is here, and our first focus of the year spotlights Healthcare and Lifesciences, a sector that is undergoing significant growth and development across the MENA region.
Our focus provides an insight into some of the most important regulatory updates across the region, such as the UAE’s groundbreaking law on the use of human genome, Kuwait’s resolution on nuclear and radioactive materials, the new regulations for healthcare services in Qatar, Egypt’s healthcare regulatory framework, and the impact of the Saudi Civil Transactions Law on the healthcare and life sciences sector … and there is so much more!
Beyond the healthcare pages our lawyers share with you multi-sector insights where you will discover articles on Dubai’s DIFC regulatory framework for startups, Bahrain’s commercial agencies law, and we also shed light on Kuwaiti civil code and the advantages of setting up a joint stock company in Saudi Arabia.Read the full edition
These are challenging times to consider investment. The impact of COVID-19 will be profound. The pandemic comes at a time of significant change in the Saudi investment ecosystem. This article will look at those key changes in institutions and personnel, and see how the new regime is facing up to the current challenge of global pandemic.
Consistent with the aims of Saudi Arabia’s Vision 2030 to build a vibrant society, a thriving economy and an ambitious nation, ‘Invest Saudi’ is the strapline for the Kingdom’s marketing campaign encouraging global investors to include Saudi Arabia in their investment plans. Recent changes have seen the Saudi Arabian General Investment Authority (‘SAGIA’) morph into a fully constituted ministry of state: the new Ministry of Investment or ’MISA’ as it will become known.
SAGIA had already undergone a significant sea-change in its role in 2018, developing from being a licensing ‘gate-keeper’ to adopting a role of investor champion: it will now will be able to offer that ‘One Stop Shop Service’ with the authority and weight of a fully-fledged ministry. The new ministry will continue to deliver the three investment stages identified by SAGIA:
This new evolution emphasises the pivotal role of foreign investment in delivering the thriving economy and gives the ministry genuine power to challenge and overcome regulations, customs and practices which may be inconsistent with the goals of Vision 2030. The investment principles of MISA are succinct:
At the same time as the creation of MISA, King Salman also decreed that the General Sport Authority would be transformed into the Sports Ministry with Prince Abdulaziz bin Turki bin Faisal as the new Sports Minister and that the Commission for Tourism and National Heritage would be transformed into the tourism ministry, with Ahmed al-Khatib as its minister. The emphasis on sport and tourism also chimes with Vision 2030’s aims of seeing the economy diversify away from an over reliance on hydro-carbons.
In a move which can only emphasise the strategic importance placed on MISA, Khaled Al Falih has been appointed as its first ever minister. Al Falih is well known and a hugely respected figure worldwide stemming in no small part from his former roles as Minister of Health, Minister of Energy, Industry and Mineral Resources and his stewardship of Saudi Aramco, the biggest company in the world. His experience and depth of vision are going to be key attributes in the newly minted MISA. As far back as 2012 he helped shape the agenda for the Davos World Economic Forum by writing that:
“Nations cannot achieve first-tier economic performance simply by producing and exporting goods. Rather, they must be able to create their own differentiating knowledge through investments in education, research and development and a vibrant entrepreneurial ecosystem.”
Nor did he ignore the environmental agenda which we face globally: from the same 2012 article:
“It would be a mistake to believe that environmental protection and economic growth are mutually exclusive. Instead, resource-rich states can take several actions that advance economic development and minimize environmental impact…by improving energy efficiency; utilizing cleaner fossil fuel technologies; consuming cleaner natural gas; moving industries down the value chain to add greater value and create higher-paying jobs while consuming less energy; reducing carbon emissions through the use of high-end technologies; and introducing renewables in a deliberate and pragmatic manner as their economic viability improves.”
The transformation of SAGIA into MISA is a highly significant step, illustrating how the Kingdom and its leaders are working to facilitate investment, overcome bureaucratic obstacles and maintain momentum in the reform programme. In the new Minister they have someone with a breadth of perspective and depth of experience who will rapidly make an impact.
It is hard to imagine a more challenging start for the new Ministry and Minister. Within weeks of the announcement the economy was substantially locked-down. In what is a public health crisis it is entirely correct that the main emphasis has been placed on protecting and caring for citizens and residents: the Kingdom has prioritised health above all else and shown genuine leadership and compassion in so doing.
However, MISA has itself been pro-active in: (a) calming investors’ fears; and (b) promoting common-sense practical solutions to the day-to-day challenges of the new environment. The latter manifests itself in a carefully thought through and well-presented publication on business continuity (available on the MISA website here).
The former is contained in a series of responses to ‘frequently asked questions’ which have been collated on the MISA website. These questions range from employment issues through to import/export and taxation issues. Perhaps the key element addresses the level of support available to the private sector which states the following:
“…the government has prepared urgent initiatives to support the private sector, especially small and medium enterprises and economic activities most affected by the virus. The financial stimulus package of these initiatives reaches more than SAR 70 billion, which consists of exemptions and postponement of some government dues to provide liquidity to the private sector thereby enabling them to manage continuity of their economic activities. In addition, SAMA has announced a package of SAR 50 billion, to support the banking sector, financial institutions and SMEs.”
These practical initiatives include the following:
In addition to the immediate practical steps indicated above a committee headed by the Minister of Finance with members including the Ministers of Economy and Planning; Commerce; Industry and Mineral Resources, and the Governor of the National Development Fund has been established to take the initiative in:
The committee may direct both the Kafala program and the General Authority for Small and Medium Enterprises to develop the necessary initiatives to provide support to business during this exceptional period, and to support them from the available resources as needed.
We are a long way from fully understanding the ‘new normal’ that may emerge from the pandemic. The Kingdom, in common with every other country, is facing up to this severe challenge. The immediate priority has to be sustaining good health for families, colleagues and workers. Balancing that imperative with the need to ensure a future thriving economy is a hard task: in terms of institutions and personnel, Saudi Arabia can approach that task with well-founded confidence.