Saudi Arabia has decided to allow 100 per cent foreign ownership in engineering businesses, giving a boost to the infrastructure sector, a report said.

The kingdom's Commerce and Investment Ministry and the Saudi Arabian General Investment Authority (Sagia) have been in consultation for a year in this regard, said a report in Arab News. Details of the new proposals are still being finalised and can be expected to be released in a week or so, the report said.

However, there are some conditions for such businesses to start Saudi operations. They include: the foreign entity must have a 10-year track record and it must already have a presence in at least four other countries.

Sagia has the power to waive these restrictions if an applicant firm’s presence would be considered in the best interest of the kingdom, said the report.

The authority, under chairman Majid Al Qasabi, has been pushing for a more flexible approach to foreign investment for the past couple of years, since a 2015 policy initiative that foresaw 100 per cent foreign ownership in most sectors in the long term, said the report.

Alain Sfeir, Riyadh-based corporate partner with law firm Clyde & Co, was quoted as saying in the Arab News report: “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.”