2018 has witnessed many developments, reforms and initiatives towards promoting growth in the private sector and attracting foreign investment into Saudi Arabia. In line with Vision 2030, the government is working towards improving the Kingdom’s rankings in the World Bank’s Doing Business report. The 2018 Doing Business report cites Saudi Arabia for its reforms in several areas, including enforcing contracts, protecting minority investors and making it easier to trade across borders.
Tayseer, a government committee consisting of over 20 government entities created with the objective of improving the business climate for the private sector, has played an important role in effecting reforms and increasing the efficiency of government services. Such reforms include the introduction of instant municipal licences for certain activities, the issuance of building permits within 15 days in certain instances, and reducing the requirements for incorporation of companies.
Another noteworthy initiative is the Small and Medium Enterprise General Authority ‘Munsha’at’, which is a government authority created for the purpose of encouraging and supporting local entrepreneurship by providing financial support, consultation services and exemption from selected incorporation requirements to small and medium-sized enterprises. As legal counsel advising both Saudi clients and foreign investors, we find ourselves updating our memos regularly with respect to incorporation requirements, as the Kingdom’s efforts towards simplifying the incorporation process for all types of companies are ever increasing.
Furthermore, many applications that were previously filed manually are now filed electronically, pursuant to the Kingdom’s efforts to achieve a ‘digital economy’. In 2018, the National Committee for Digital Transformation and subsequently the National Digital Transformation Unit were created to oversee this important pillar of the Kingdom’s Vision 2030. This digitisation initiative has proven to be efficient, but at times challenging, specifically when there is no room for adjustments when making selections from drawdown menus.
It is difficult to summarise – and sometimes even keep up with – the changes and reforms taking place in Saudi Arabia, which in addition to the above include many major developments such as the introduction of Value Added Tax (VAT) in the beginning of 2018, as well as introduction of a bankruptcy regulation. This places responsibility on legal counsel to ensure that their advice to prospective clients is up to date and to ensure that existing clients remain in compliance with applicable regulations and requirements.