The Billion-Dollar Question Serious Investors Are Now Asking

Picture this: a country with 84 million hectares of potentially arable land — one of the largest agricultural endowments in Africa — sitting on vast mineral reserves, commanding a strategic position on the Red Sea, and preparing to welcome a wave of foreign capital at a landmark bilateral forum in Riyadh this June 2026. That country is Sudan. And the legal architecture governing how international capital enters, operates, and is protected there has changed significantly.

The Sudanese-Saudi Business Forum, to be held in Riyadh in June 2026, marks the first major economic event of its kind since the outbreak of conflict in 2023. With Saudi Arabia already leading all Arab nations in investment volume in Sudan — the Sudanese Employers Federation cites figures approaching $35.7 billion concentrated across some 250 projects — and the Sudanese government presenting 100 strategic partnership projects worth an estimated $50 billion to potential investors, the commercial opportunity is substantial. But opportunity without legal clarity is risk.

That is precisely why international law firms, foreign multinationals, and global investors need to understand Sudan's Investment Encouragement Act 2021 — the cornerstone legislation governing foreign investment in Sudan — before they take a seat at that table.

At SCLO, we provide the on-the-ground legal intelligence that bridges Sudanese law with international practice. This post breaks down what the Investment Encouragement Act 2021 actually says, how it compares to global FDI standards, and what it signals for the economic potential of Sudan.

What Is the Investment Encouragement Act 2021?

The Investment Encouragement Act 2021 (hereinafter "the Act") was issued on 11 April 2021 and published in the Sudan Official Gazette on 12 May 2021. It repealed and replaced the National Investment Encouragement Act 2013, representing Sudan's most significant legislative effort to align its investment environment with international standards in over two decades.

The Act came into force on the date of its signature and remains the operative investment framework in Sudan. It is worth noting, however, that several key implementing regulations required by the Act — including the formal "special exclusion list" identifying sectors not available to foreign investment — had not been fully issued as of the most recent publicly available assessments. The legal rights conferred by the Act are therefore established in statute, but their full operational implementation remains a work in progress — a distinction that experienced legal counsel must appreciate and advise on.

The Act is administered through the Investment Organ and Private Sector Development Authority (the "Authority"), under the oversight of the Minister of Investment and International Cooperation. It applies to all investment projects — national, state, and strategic — whether domestic, Arab, or foreign in origin. Its enactment signalled Sudan's intent to reintegrate into the global economy following years of international sanctions and political transition.

For any foreign investor or international legal counsel seeking to advise clients on foreign investment in Sudan, the Investment Encouragement Act 2021 is the starting point for every material conversation.

Five Key Provisions That Matter to International Investors

1. Non-Discrimination and Equal Treatment

One of the most commercially significant provisions of the Investment Encouragement Act 2021 is its explicit non-discrimination clause. The Act provides that no distinction shall be made between invested funds on the basis of their being local, Arab, or foreign in origin, and that the State shall ensure that foreign investors receive treatment equivalent to that afforded to national investors.

In international practice, this mirrors the "national treatment" standard enshrined in most modern bilateral investment treaties (BITs) and the UNCTAD Investment Policy Framework for Sustainable Development. It is a foundational requirement that sophisticated institutional investors expect before committing capital to a jurisdiction. Sudan's codification of this principle in statute — rather than leaving it to treaty-by-treaty negotiation — is a materially positive development for foreign investors seeking legal certainty at entry.

What this means for you: Foreign multinationals and their legal advisors can point to a statutory equal treatment guarantee when structuring entry vehicles, negotiating local partnership arrangements, or assessing exposure to discriminatory treatment. That said, the U.S. State Department's Investment Climate Statement has noted that, despite this statutory protection, Ministry officials have continued to encourage foreign investors to engage a Sudanese partner when entering the market — a practical reality that on-the-ground advisers should address.

2. Profit Repatriation and Capital Transfer Rights

The Act guarantees foreign investors the right to transfer profits, financing costs of foreign capital, and loan repayments in convertible foreign currency — subject to compliance with Central Bank of Sudan regulations. Registration of the foreign direct investment with the Central Bank of Sudan prior to commencing business operations is a prerequisite for exercising these repatriation rights.

In international practice, free transfer provisions are a baseline expectation under the OECD Codes of Liberalisation and most contemporary BITs. Sudan's framework establishes this right in statute. International legal counsel should advise clients to build the Central Bank registration step into their market entry timeline as a non-negotiable compliance prerequisite — not an afterthought.

What this means for you: Profit repatriation rights exist in law. The implementation mechanism requires proactive engagement with Sudanese banking institutions prior to first investment — an area where local counsel with active relationships in the Sudanese financial sector is indispensable.

3. Investment Guarantees and Expropriation Protections

The Investment Encouragement Act 2021 provides that no administrative body may withhold or override the privileges and guarantees granted under the Act. This protection creates a statutory shield against administrative circumvention of investor rights. Invested funds shall not be subject to any arbitrary measures or discriminatory decisions.

On expropriation, Sudan's legal framework provides that government seizure of investment assets may only occur for public interest purposes, on a non-discriminatory basis, with due process, and subject to prompt and adequate compensation. This formulation closely tracks the traditional international law standard and is consistent with the approach found in bilateral investment treaties to which Sudan is a party.

Compared to similarly positioned frontier markets, this is a comparatively robust statutory protection. UNCTAD's Investment Policy Review of Sudan noted that the country's legislative framework is "relatively open" and that several laws are "modern and in line with good practices."

What this means for you: The legislative protections exist and are internationally benchmarked. For international law firms advising on deal structuring, the expropriation framework provides a basis for risk assessment, though enforcement capacity and institutional readiness remain areas requiring due diligence.

4. The Single Window, Licensing Architecture, and Sector Exclusions

A Single Window mechanism — a coordinated unit designed to simplify and facilitate the completion of all investment transactions — is provided for under the Act. Foreign investors are required to obtain a licence from the Minister of Investment and International Cooperation (or a State Minister for state-level projects), and must deposit a minimum of $250,000 as earnest money prior to licence issuance.

In comparative international practice, Single Window systems have been successfully implemented in Singapore, the UAE, and Rwanda as tools to reduce bureaucratic friction and improve investment climate rankings. Sudan's statutory adoption of this model reflects alignment with international best practice in investment facilitation.

On sector exclusions: the 2021 Act establishes a mechanism for the Authority to publish a "special exclusion list" identifying economic sectors and activities not available for foreign investment. Importantly, this list had not been formally issued as of the most recent available assessments. The sector restrictions noted in earlier practice — including in railways, freight transportation, inland waterways, and airport operations — originated under the 2013 Act framework and were carried into the transitional period. These restrictions remain referenced in official diplomatic investment assessments. International investors in infrastructure and logistics must take specific legal advice on current permissible structures in these sub-sectors, particularly given that Sudan is now actively inviting Saudi participation in railway and port reconstruction — signalling potential policy evolution in this area.

What this means for you: The minimum capital threshold and the centralised licensing regime create a clear — if capital-intensive — pathway to establishing a legally registered investment presence in Sudan. The formal sector exclusion list should be among the first documents legal counsel seeks to obtain or verify through the relevant authorities.

5. Dispute Resolution and Investment Courts

The 2013 Act framework, which preceded the 2021 Act, established specialist investment courts as a dedicated judicial forum for disputes between investors and public bodies. The 2021 Act preserves and builds upon this institutional structure, maintaining the principle of a specialist forum for investment matters separate from the general civil courts. Sudan is also a contracting member state of the International Centre for Settlement of Investment Disputes (ICSID), meaning investor-State arbitration at ICSID may be available where applicable bilateral investment treaties or contracts confer consent.

What this means for you: International legal counsel should map the dispute resolution architecture carefully when structuring transactions — identifying whether domestic investment courts, BIT-based ICSID arbitration, or contractual dispute resolution mechanisms provide the most appropriate and enforceable forum for a given investment structure.

Sudan vs. International Practice: Where the Gaps Remain

Being candid about gaps is part of what makes counsel genuinely useful. The Investment Encouragement Act 2021 is a well-structured piece of legislation in several respects, but international investors and their advisors should approach foreign investment in Sudan with clear-eyed awareness of the following:

Implementation gaps. The Act is legally in force, but key secondary regulations remain outstanding. UNCTAD has noted that implementation of Sudan's investment legislative framework has historically been impeded by the absence of secondary legislation and insufficient institutional capacity. Several provisions of the 2021 Act itself — including the formal sector exclusion list and minimum capital regulations — explicitly defer to regulations that have not yet been issued. The rights exist on paper; the full regulatory infrastructure to operationalise them is still developing.

Banking and foreign exchange infrastructure remains the most operationally significant constraint. The primary challenge being addressed at the June 2026 Riyadh forum is precisely this — banking transfers between Sudan and Saudi Arabia have been a material obstacle to bilateral commerce. For foreign investors, securing reliable correspondent banking relationships and understanding Central Bank of Sudan protocols is essential pre-entry work.

Sector restrictions and state-owned enterprise dominance present structural challenges. State-owned enterprises, including some associated with military and security services, play an unusually large role in the Sudanese economy across fuel, infrastructure, and agriculture. Foreign investors entering sectors proximate to these interests should conduct thorough due diligence on competitive dynamics and counterparty risk.

The Economic Potential of Sudan: What the Numbers Signal

The data points surrounding the June 2026 forum tell a compelling story about where Sudan is positioned in the emerging investment landscape.

Sudan's agricultural endowment — approximately 84 million hectares of potentially arable land, significant Nile River access, and substantial livestock resources — positions the country as a potential long-term food security partner for Gulf states whose populations depend heavily on food imports. According to FAO data, Sudan currently cultivates only around 20 million hectares of that potential — meaning the vast majority of the country's agricultural productive capacity remains untapped. This structural complementarity between Sudanese productive capacity and Saudi demand is the commercial logic underpinning decades of bilateral investment.

Sudan's infrastructure reconstruction programme is accelerating. In January 2026, the Sudanese government granted Saudi companies priority in reconstruction contracts covering railways and port development, including the strategically significant Abu Amama port project on the Red Sea. For investors in logistics, construction, and infrastructure financing, this signals real near-term deployment opportunities — and notable policy intent toward foreign participation in sectors that have historically carried restrictions.

The pipeline of 100 strategic partnership projects across agriculture, energy, minerals, infrastructure, and technology, with an estimated combined cost exceeding $50 billion according to the Sudanese Employers Federation, represents a structured opportunity set for international capital. Whether these figures are fully realised will depend on the pace of stabilisation and the rate at which the 2021 Act's implementing framework matures.

What This Means for Your Practice or Investment Mandate

If you are an international law firm advising corporate clients on African or Gulf-adjacent market entry, Sudan's evolving legal framework under the Investment Encouragement Act 2021 warrants active monitoring and client briefing. The legal architecture for foreign investment in Sudan has been substantively updated, the political will to attract capital is evident, and the commercial infrastructure — including the forthcoming Riyadh forum — is being rebuilt.

If you are a foreign multinational or institutional investor with an interest in agriculture, energy, infrastructure, or minerals, Sudan's pipeline of strategic projects under the Act's framework offers a structured entry point — provided you enter with credible local legal counsel, a rigorous view of the regulatory implementation gaps, and a clear-eyed operational risk framework.

At SCLO, we work exclusively at the intersection of Sudanese law and international commercial practice. We advise international law firms, foreign multinationals, and institutional investors on market entry structuring, regulatory compliance, licensing under the Investment Encouragement Act 2021, dispute resolution strategy, and bilateral transaction support.

The June 2026 Riyadh forum is a signal. The Investment Encouragement Act 2021 is the framework. The question is whether your organisation is legally prepared to act.

Speak to SCLO Before the Forum

The window between now and the June 2026 Sudanese-Saudi Business Forum is the right time to commission a legal readiness assessment — mapping your investment objectives against the current provisions of Sudanese investment law, identifying structural risks, and establishing the relationships needed to move efficiently once commercial discussions open.

Disclaimer

This publication is provided for general informational purposes only and does not constitute legal advice. The content offers a general overview of the relevant legal framework and should not be relied upon as a substitute for specific legal advice tailored to particular facts or transactions.

If you require advice on any matter relating to Sudanese law, mining regulation, or foreign investment in Sudan, please contact Sudanese Commercial Law Office (SCLO) for professional assistance.

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