The Saudi Council of Ministers has recently approved certain amendments to the Private Health Institutes Law (the Amendments). The development of the healthcare sector is one of the top priorities identified in Saudi Arabia's Vision 2030. It is anticipated that the Amendments will significantly increase the amount of foreign investment in the Saudi healthcare market (Healthcare FDI). This article provides an overview of the recent updates to be considered.

Healthcare FDI

The Saudi Arabian General Investment Authority (SAGIA) is the licensing authority that regulates all foreign investments in the Saudi market. Based on licensing procedures that were previously adopted by SAGIA, Healthcare FDI was restricted. Foreign investors were only permitted to own, operate and manage hospitals in Saudi Arabia. For further details, please refer to our previous article.

The Amendments

The key aspects of the Amendments can be summarised as follows:

  • Revoking paragraph 1 of article 2 pertaining to the ownership of healthcare institutions which stated that "except for hospitals, a private health institution shall be exclusively owned by Saudis"; and
  • Amending paragraph 2 of article 2 pertaining to the ownership of clinics, requiring that all operating clinics must be owned by Saudi nationals specialized physicians.

In light of the above, foreign investors may now fully own, operate and manage all types of private healthcare institutions (with the exception of clinics), which include the following:

  • General health centers;
  • Specialised healthcare centers;
  • Radiology centers;
  • Medical laboratories;
  • [Outpatient] surgical facilities; and
  • Supporting medical services facilities.

Based on our recent discussions with officials at SAGIA and the Saudi Ministry of Health, it is clear that these authorities are currently coordinating efforts in order to:

  • Implement a unified regulatory licensing system governing all potential Healthcare FDI in the Saudi market;
  • Attract more international healthcare providers and investors; and
  • Improve the performance of all healthcare providers and institutions in Saudi Arabia.

The Amendments are expected to assist the authorities to meet these objectives.