Saudi Arabia’s New Laws Pave the Way for Investment and Economic Growth

More Clarity and Predictability in Saudi Arabia´s Legal Landscape

Saudi Arabia has introduced a series of new laws aimed at promoting investment and economic growth. These changes are part of the kingdom’s Vision 2030 strategy to attract foreign direct investment and reduce its dependence on oil.

The reforms include new laws aimed at easing the entry of foreign investments, simplifying business operations, and modernizing labor and civil transactions laws. These changes are designed to provide more clarity and transparency for investors and reduce bureaucratic barriers.

Investment Law

Significant updates to the Investment Law aim to provide equal footing for Saudi and non-Saudi investors. The reforms eliminate the requirement for a foreign investment license and offer enhanced protections for investor rights, including safeguards against expropriation and better mechanisms for intellectual property protection and dispute resolution.

Labor Law

Saudi Arabia has also amended labor law to align it with international standards and improve its attractiveness to global talent. The changes include extending maternity leave (12 weeks on full pay), introducing paternity leave, and enhancing dispute resolution procedures. Also, the probationary period has been adjusted to 180 days, reducing administrative burdens and providing greater certainty for employers and employees.

Companies Law

Additionally, the new Companies Law simplifies the establishment of different types of companies in Saudi Arabia. It provides more precise guidelines on corporate operations, including the election of board members, distribution of dividends, and maintenance of accounting records.

Civil Transactions Law

This law also covers aspects of commercial transactions in the kingdom, from contract termination to dispute resolution. It is designed to deliver greater clarity and predictability in commercial transactions.

The TME Legal Takeaway

As a result of these reforms, Saudi Arabia has seen an increase in foreign direct investment and the relocation of foreign firms to the kingdom. These changes are expected to drive economic growth and reduce reliance on oil revenues, positioning Saudi Arabia as a competitive player in the global market.

FTA Publishes New Guide on Interest Deduction Limitation Rules under UAE Corporate Tax Law

The guide reflects the UAE’s intention to bring its corporate tax regime in line with international best practices, particularly the OECD’s BEPS (Base Erosion and Profit Shifting) framework, specifically Action 4, which addresses excessive interest deductions. Companies are well advised to incorporate these rules into their tax planning strategies to avoid adverse consequences and to benefit from the flexibility that the legislation offers when applied correctly.

Legal Analysis of the UAE’s New End-of-Service Gratuity Savings Scheme

The UAE’s new end-of-service savings model represents a forward-thinking reform that offers substantial benefits for both employees and employers. The ability to transfer gratuity funds into professionally managed investment schemes provides greater transparency and long-term financial security. Companies interested in participating should proactively adjust their internal processes to take full advantage of this innovative model.

The New UAE Competition Law

The reform of competition law in the UAE marks a significant step towards a more modern and transparent regulatory framework. The introduction of clearly defined merger control thresholds, the elimination of broad sectoral exemptions, and the substantial tightening of penalties reflect a more regulated competitive environment. The law came into force on December 29, 2023, while the new merger control thresholds have been in effect since March 31, 2025. Companies must therefore ensure full compliance with these new provisions as of that date.

Law No. 2 of 2025: Comprehensive reform of the DIFC Courts Law

Law No. (2) of 2025 marks a significant milestone in the development of the DIFC Courts, with a strong focus on mediation, judicial efficiency und a human-centered approach to dispute resolution. By clearly delineating jurisdictional boundaries, introducing mechanisms for amicable settlements, and enhancing procedural flexibility, the law reinforces the DIFC’s standing as a premier international financial center with a modern and effective judicial framework.

Author

Omar Sami

Managing Partner
Rechtsanwalt | Lawyer