In a significant move to regulate foreign investment and protect key local industries, the Ministry of Commerce, Industry, and Investment Promotion has introduced new amendments to the Foreign Capital Investment Law. These changes, aligned with Royal Decree No. 50/2019 and further detailed in Ministerial Decision No. 209/2020, expand the list of activities in which foreign investment is prohibited.
The updated list of prohibited activities, now included under Ministerial Decision No. 209/2020, is designed to safeguard local industries and the public interest by restricting foreign investment in specific sectors, particularly those related to traditional and craft industries.
The following sectors have been newly added to the list of activities where foreign investment is now prohibited:
- Craft Production: This includes the production of craft items such as distilling flowers and herbs, water and frankincense oil, leatherwork, woodcraft, incense manufacturing, and pottery.
- Retail and Rental Services: Prohibited activities include retail in stores specializing in building material scraps, event supplies and furniture rental, and retail in speciality drinking water stores.
- Agricultural and Environmental Activities: Restrictions now apply to farming freshwater fish, planting ornamental plants and seedlings, and collecting batteries and used oils.
- Service Industries: The list includes skin care services, mobile cafes, public clerks services, and the management of LPG filling stations.
- Automotive and Miscellaneous: Foreign investment is now prohibited in the sale of used vehicles, grocery stores, and Sanad service centres.
These amendments highlight the government’s strategic focus on prioritizing local industry. It is crucial for businesses and investors to review these updates carefully to ensure compliance with the new regulations.
If you need further guidance on how these changes may affect your business, our legal team is here to help. We can assist you in navigating these regulatory updates and ensuring that your investments are fully aligned with the latest legal requirements. Contact us today for expert advice and support.
For a full list of prohibited activities, review Ministerial Decision 435/2024
