Foreign investors looking to enter the maritime industry in Saudi Arabia are advised to carefully review the country’s investment rules and regulations. Khurram Ali, an expert in maritime law, recommends that foreign investors consider partnering with a local company that has expertise in the maritime industry to navigate the legal system effectively.
The top opportunities for maritime companies in Saudi Arabia can be found in different sectors. In the oil and gas sector, there is a growing demand for vessels from Aramco, presenting significant opportunities for local maritime shipping companies to expand their business. The port sector has also released tenders for port management and support services, creating further growth opportunities. Additionally, the commercial shipping sector offers opportunities for international operators to expand their business as trade volumes increase.
From a legal standpoint, foreign companies need to be aware of Saudi Arabia’s investment rules and regulations. They must understand whether they can set up independently or require a local partner, and if so, what percentage of ownership is required. Furthermore, companies need to familiarize themselves with the new civil transaction law, which will come into effect in December 2023. This law will have a significant impact on contracts and business transactions in the country, so understanding its implications is crucial for foreign investors.
When setting up a company in Saudi Arabia, foreign investors have the option to do it alone or partner with a local company. For fresh entrants into the market, choosing a partner with industry expertise and a deep understanding of the local rules and regulations is essential. It is important to select a partner who can provide valuable support and add value to the business, rather than solely meeting the minimum requirements for Saudi shareholding.
The introduction of the Saudi maritime law in 2019 has had a positive impact on the industry. It has provided a framework for foreign investors to understand the risks and make informed business decisions. The law has given companies confidence to invest in Saudi Arabia’s maritime sector, leading to economic growth. While the legal system may be different from Western countries, there is a justice system in place, and foreign companies should not be afraid to engage in legal proceedings when necessary.
Overall, the maritime industry in Saudi Arabia offers significant opportunities for foreign investors, but careful consideration of the country’s investment rules, regulations, and legal framework is crucial for success.