Early on Monday, The Commerce and Investment Ministry, and the Saudi Arabian General Investment Authority (Sagia), officially decided to allow 100 percent foreign ownership in Saudi Arabia's engineering sector, Arab News reported.
The move aims to welcome more foreign investors into the country and encourage them to invest in its economy.
Under the new order, engineering firm owners "can expect 100 percent foreign ownership, previously limited to 75 percent; no requirement for a Saudi citizen to be a shareholder; and limited liability incorporation."
Foreign companies who wish to apply for full ownership of firms in the kingdom "must have a 10-year track record in operations and must already have a presence in at least four other countries."
However, "Sagia has the power to waive these restrictions if an applicant firm’s presence would be considered in the best interests of the Kingdom," the local English-language daily wrote.
"It's a positive step forward"
Reacting to the latest news, Riyadh-based corporate partner with law firm Clyde & Co., Alain Sfeir said:
“It is a positive step forward. Foreign engineers and consultants are looking to get involved in and benefit from the expansion of infrastructure the Kingdom is experiencing, and the new corporate structure will give them more confidence to proceed.”
The kingdom has recently been opening up to foreign investments
In the past few years, Sagia's Chairman, Majid Al-Qasabi, has been pushing for a more flexible approach to foreign investment.
Other officials and entities in the country have been doing the same under its Vision 2030 - an ambitious blueprint which aims to diversify the country's economy and reduce its reliance on the domestic oil industry.
Greater foreign investment is seen as an essential part of the vision.
According to Arab News, in recent years, other sectors including "retail and wholesale distribution, were taken off the 'negative list' Sagia maintains for sectors not deemed appropriate for exclusive foreign ownership — like military and other security activities, some aspects for Islamic tourism, media, telecommunications and a few others."