SAUDI ARABIA Law and Practice Contributed by: Dana Halwani and Leanne Farsi, Derayah LLPC
2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments Until the year 2000, the opportunities for for - eign investment in Saudi Arabia were extremely restricted, being limited essentially to foreign minority shareholdings in industrial development projects involving technology transfer to Saudi Arabia. Foreign participation in service or trad - ing businesses was not possible. At the time, the economy was dominated by state-owned monopolies. With the assistance of the World Bank, a new foreign investment framework was created through the enactment of the new Investment Regulation and the creation of the Saudi Ara - bian General Investment Authority (SAGIA) in April 2000. Until then, foreign direct investment in Saudi Arabia had been treated as a privilege. Under the new law, all business activities were opened to foreign investment, unless they were expressly excluded from foreign investment under the so-called Negative List. These reforms immediately opened most forms of industry and services to 100% foreign own - ership. Trading activities remained restricted to Saudi nationals until 2007, when the sector was opened up to 75% participation. 100% owner - ship of trading businesses has been possible since 2016, but is subject to high entry require - ments. In 2020, SAGIA became the Ministry of Invest - ment of Saudi Arabia (MISA). Foreign investors must now obtain approval from MISA before establishing a presence in Saudi Arabia. Approv - al is obtained after meeting certain conditions (depending on the investment activity) and pro - viding the required documentation. There are
Exceptions to this rule exist, such as where the court deems that the plaintiff has a valid excuse for bringing the claim after the expiry of the limi - tation period. The past few years have also seen a shift from court proceedings being held in person to being held on online platforms, in no small part in response to the COVID-19 pandemic. Even after regular governmental services resumed in June 2020 following the initial lockdown in the Kingdom, hearings are now mainly held online. Evidence The Evidence Regulation regulates civil and commercial transactions. It contains provisions controlling the presentation, examination and interpretation by the courts of evidence, and regulates admissions, oral testimonies, cross- examinations, the taking of oaths, expert evi - dence and written and digital evidence. Experts Where technical or complex financial issues are raised, it is common for the judges to appoint an expert or experts as advisers to the tribunal. The tribunal has discretion over who it appoints as an expert, although as per Article 110 of the Evi - dence Regulation, should the parties agree on the selection of one or more experts, the court shall abide by their agreement. The court also has discretion over whether or not it accepts or disregards all or part of the expert’s findings; however, ordinarily, the determination of techni - cal or complex financial issues falls to the expert.
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