Welcome to the Saudi Arabia focus edition of Law Update.
One of the key markets in the Middle East and North Africa (MENA) that continues to lead from the front is the Kingdom of Saudi Arabia (KSA). As the largest country in the Middle East and the 18th largest economy in the world, the progress KSA continues to make is underpinned by its Vision 2030 that envisions developing the country as an investment powerhouse and hub that ultimately connects Asia, Europe, and Africa. Given Saudi Arabia’s significance to the regional economy, our team of experts have prepared a range of pertinent articles that provide insights into new laws, regulations, and the legal landscape in the Kingdom.
This edition will provide you with an up-to-date guide on matters such as; the framework issued by the Saudi Central Bank on IT governance, the anti-corruption landscape under Vision 2030; we also provide practical tips for dispute avoidance. This is only a snapshot; there are many more articles within the KSA focus section for you to read, which we hope you will find valuable and enjoyable.Read the edition
Oman’s Ministry of Commerce, Industry and Investment Promotion (MOCIIP) has issued Ministerial Decision 209 of 2020 setting out the list of activities in which foreign investment is prohibited (“Prohibited List”).
The Prohibited List supplements the Foreign Capital Investment Law (“FCIL”) that was issued by Royal Decree No 50 of 2019, on which we had previously provided an update here. The Prohibited List took effect on 14 December 2020 and provides the certainty that new investors will seek when looking to enter the Omani market.
As previously commented, subject to specific restrictions, the FCIL will now permit foreign investors to legally and beneficially own 100% of the share capital of their Omani businesses and in the vast majority of cases, a local shareholding and associated side arrangements are no longer necessary.
Specific exceptions to the 100% ownership rule still remain but it is now clear from the Prohibited List that the vast majority of business activities that would interest a foreign investor to the Omani market are capable of being conducted through a wholly owned Omani vehicle.
The Prohibited List contains 70 business activities that are not permitted to be conducted by foreign investors and which may only be carried out by Omani natural persons or their companies. While this list is an increase on the original unpublished list of 37 or so business activities that MOCIIP had initially adopted at the time the FCIL came into force, many of the newly added activities to the Prohibited List are small, domestic type activities that are not traditionally dominated by foreign investors. Broad based activities in the construction, tourism, energy, manufacturing, telecoms and utility sectors are not stated on the Prohibited List.
By way of example and to give a flavour of the activities that are restricted, the Prohibited List includes the following (paraphrased from the Prohibited List):
Al Tamimi & Company’s Oman office regularly advises on Omani foreign investment law across a range of sectors and has recently advised its foreign investor clients on whether their businesses in Oman are capable of being restructured to enable those companies to be wholly owned by their foreign shareholder. We have also implemented this advice from a practical perspective, through the appropriate registration and filings with MOCIIP.
If you would like to discuss the above developments in more detail, please contact us.