The possibilities of admission of foreign private capital into a developing country depend on the political system of that country. Sudan, shifting from a mixed economy to a market economy and adopting an open and liberal policy, encourages foreign capital of all sources from friendly countries, provided that it is likely to contribute to Sudan'economic and social development. This policy is entrenched further in Saudi Arabia, which has a capitalist economy. Initially, for a foreign investment to be admitted into Sudan and Saudi Arabia, certain procedural and substantive requirements have to be satisfied. However, the recent investment codes have eased and simplified considerably the screening procedures. It is no longer mandatory in Saudi Arabia that foreign investments should be formalized in joint ventures whereby the state or its nationals acquire some control over the activities of foreign enterprises.

Foreign private investment in Sudan and Saudi Arabia is regulated by investment laws, treaties and development agreements. Under the investment laws, foreign investors in Sudan and Saudi Arabia enjoy generous incentives and concessions such as exemption from taxation and customs duties. They are also accorded guarantees against illegal expropriation, and are assured of the right to remit profits and repatriate capital in case of liquidation. But the real problem is not the quantum of the incentives and concessions, but the effectiveness and duration of their enjoyment. This, in the end, depends on the political stability of the government according them.