Saudi Arabia Wants Foreign Investors For Hospitals

Saudi Arabia Wants Foreign Investors For Hospitals

16th Apr 2016

The healthcare sector in has been given priority status by the Saudi Arabian General Investment  Authority (SAGIA) - a move that will, for the first time, allow foreign investors to open hospitals in the Kingdom subject to Ministry of Health (MoH) approval.


The decision was made by SAGIA as they aimed to focus on developing sectors which have a direct impact on social and economic development in the area. The plan will see ‘red tape’ removed, and meetings with potential investors take place in order to ease any concerns or answer any queries which they may have about the country.


Presently the health sector is one which is not open to foreign investment, and even once these changes have been put into practice it will not be fully open, but it will be possible for investors to own and control hospitals assuming they meet certain criteria that has been set out by the MoH.


Healthcare services that can be licensed by SAGIA must not be included under the list specified in ‘the Negative List’ which reserves certain economic activities solely for native Saudis.


Whilst this appears to leave the potential for investors still fairly open, SAGIA will only license ‘Hospital Services ‘CPC 9311’ (which can be founded, run and managed by foreign investors) and other human healthcare services ‘CPC 9319’ (which the obvious exclusion of those which have been placed on the negative list). This restricts the control a foreign investor can have over a hospital or health service, and it isn’t the only limitation.


The MoH remain reluctant to allow certain services approval to receive foreign investment. These include services involving transport of patients by ambulance, residential health facilities and transplant organ banks.


The regulations therefore state that a private healthcare organisation is defined as “privately owned healthcare institutions, which offer treatment, diagnostic, laboratory, rehabilitation, and nursing services”. Hospitals are allowed under foreign control, whilst general and specialised health centres, clinics, radiology centres and medical laboratories as well as same day surgical facilities must be under 100% Saudi ownership.


Ownership of certain medical facilities is therefore heavily regulated, but the management or operational control of a health center, hospital or clinic is not restricted and is not subject to as stringent terms and conditions.


In summary, and in the simplest terms possible, foreign investors - assuming they receive the relevant approval - should be allowed to establish and own hospitals (which fit the PIH criteria) and be involved in the management and operations side of hospitals, general health Centers and specialised healthcare facilities as well as certain other human healthcare facilities which are approved by the MoH.






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