Category Archives: Corporate and Commercial Services

Public-private partnerships (PPPs) remain a cornerstone of Saudi Arabia’s infrastructure strategy, offering a powerful mechanism for achieving the goals of Vision 2030. The Kingdom’s push for economic diversification and a more dynamic private sector has accelerated PPP adoption across key sectors, from transport and energy to healthcare, education, and digital infrastructure.

Since enacting the PPP Law in 2019, Saudi Arabia has significantly reinforced its legal framework to support private sector engagement. In 2023 and 2024, the National Centre for Privatisation & PPP (NCP) released updated guidelines, standardised templates, and risk-allocation frameworks to streamline project procurement and implementation. The 2024 amendments to the Implementing Regulations of the Privatisation Law provided additional clarity on:

• Government guarantees and contingent liabilities
• Sector-specific eligibility criteria
• Dispute escalation protocols
• Foreign ownership and repatriation rights

The NCP also launched a new PPP Platform Portal in 2024 to enable faster bidder registration, project tracking, and real-time feedback loops during procurement, boosting transparency and investor confidence.

Strategic Role in Vision 2030 Execution

Infrastructure under Vision 2030 is more than concrete and cables—it’s about national transformation. PPPS are now directly embedded in megaprojects such as NEOM, The Line, Red Sea Global, and the Riyadh Metro expansion. These ventures combine long-term contracts with innovative financing structures, allowing Saudi Arabia to tap into global capital while retaining sovereignty and public accountability.

Key sectors currently leveraging PPP models:

• Healthcare: Hospitals, primary care centres, and diagnostics hubs
• Education: Schools, training centres, and digital learning platforms
• Utilities: Water desalination, power generation, and waste-to-energy plants
• Transport: Airports, ports, roads, and urban transit networks
• Digital infrastructure: Data centres and 5G backbone services

Risk Allocation and Legal Safeguards

Risk-sharing remains a critical element of PPP contract structuring. The updated 2024 NCP risk matrix provides more precise delineation:

Type of Risk: Typical Party Responsible
Construction Delays: in the Private Sector
Operational Failures: in the Private Sector
Demand or Usage Shared: depending on the project
Regulatory Changes: Government
Macroeconomic Shocks: Negotiated (e.g., inflation-indexed payments)

The government has also introduced force majeure relief mechanisms for pandemic-like events and geopolitical disruptions, a direct lesson from COVID-19 and recent Red Sea shipping tensions.

Legal Due Diligence and Investor Rights

Before reaching financial close, rigorous due diligence—legal, regulatory, environmental, and Shariah—compliant—is standardised. Notably, a 2023 SAMA Circular strengthened the legal treatment of sukuk and Islamic financing in PPP projects, aligning with Saudi Arabia’s growing Islamic finance ambitions.

Furthermore, the Saudi Government Tenders and Procurement Law (updated in 2024) now mandates pre-bid consultations for PPPS above SAR 500 million, improving alignment between ministries and bidders from the outset.

Dispute Resolution: Growing Trust in Local Forums

International arbitration remains common, but 2023-2025 saw a growing shift toward domestic resolution mechanisms. The Saudi Centre for Commercial Arbitration (SCCA), with its 2023 rulebook aligned with UNCITRAL and ICC standards, has positioned itself as a trusted forum for PPP-related disputes.

Recent reforms include:

• Bilingual (Arabic-English) arbitration proceedings
• Faster interim relief procedures
• Recognition of foreign arbitral awards under the New York Convention

Challenges and Areas for Reform

Despite progress, several challenges remain:

• Regulatory bottlenecks: Project approvals still face inter-ministerial delays in specific sectors.
• Bankability: Lenders often request stronger step-in rights and revenue guarantees, especially in greenfield projects.
• Capacity gaps: Smaller municipalities and regional authorities often lack the expertise to structure and manage PPPS effectively.
• Long-term predictability: Private investors seek greater clarity on how evolving ESG expectations, data regulations, and labour Saudization quotas will impact long-term operational costs.

The Road Ahead

In 2025, the Kingdom is actively working on a new PPP Law Amendment Bill (under consultation as of March 2025) to address gaps in secondary legislation, streamline project lifecycle management, and better align with international best practices. Moreover, regional cooperation through the GCC is being enhanced to allow cross-border project financing and shared infrastructure PPPS, especially in energy interconnectivity and logistics corridors.

Saudi Arabia’s tourism and hospitality sectors continue to undergo transformative change, underpinned by the ambitious goals of Vision 2030. With the Kingdom targeting 150 million annual visitors by 2030—recently revised upwards from the earlier 100 million goal—tourism has emerged not just as a strategic sector, but as a national priority for economic diversification and global positioning. Legal and regulatory reform is central to enabling this ambition, and 2024–2025 has seen a wave of new policies and institutional enhancements aimed at making Saudi Arabia a competitive, world-class destination.

Modernising the Legal Framework

The evolution of the legal environment has been marked by the continued refinement of the Tourism Law and supporting regulations. Following the significant updates in 2022 and 2023, the Ministry of Tourism introduced new executive bylaws in late 2024 aimed at further streamlining licensing, improving classification systems, and ensuring international service benchmarks are met.

Most notably, the launch of the Integrated Licensing Platform (ILP) in 2025 enables end-to-end application and renewal processes for all tourism-related services, including accommodation, entertainment venues, transportation, and tour operations, under a single digital umbrella.

Foreign Investment and Private Sector Momentum

As of Q1 2025, Saudi Arabia has attracted over SAR 220 billion in cumulative tourism-related investments, including major joint ventures between global hotel chains and local developers. The legal framework now permits 100% foreign ownership in virtually all hospitality subsectors, including short-term rentals, eco-resorts, and heritage site management.

In parallel, the Tourism Investment Enabler Programme, launched in 2024, provides a bundled legal and financial facilitation service for new entrants, jointly operated by the Ministry of Investment and the Tourism Development Fund (TDF). This initiative offers preferential zoning, PPP advisory services, tax incentives, and fast-track licensing for projects aligned with national tourism zones, such as the Red Sea Project, Diriyah Gate, and NEOM.

Sustainability, Culture, and Responsible Development

Sustainability remains a legal imperative, not just a policy aspiration. Developers of large-scale tourism projects must now secure the mandatory Green Construction Compliance Certification—an environmental framework introduced in early 2025 that requires alignment with carbon neutrality targets and local biodiversity standards.

Additionally, a new Cultural Heritage Protection Law, enacted in 2024, gives enhanced enforcement powers to the Royal Commission for AlUla and the Heritage Commission, ensuring that both tangible and intangible heritage are preserved amid rapid development. The law mandates cultural impact assessments for projects near heritage sites and requires developers to work with licensed cultural consultants.

Navigating Regulation: New Challenges in a Maturing Market

While legal reforms have brought transparency and accessibility, the regulatory environment remains complex, particularly due to overlapping mandates from regional municipalities, GACA (for aviation-related services), and sector-specific authorities. Businesses must now adhere to updated compliance regimes covering:

• Data privacy (aligned with the new Saudi Personal Data Protection Law, effective March 2025)
• Tourism-specific labour laws and Saudisation ratios
• Safety protocols linked to AI-driven surveillance in public entertainment venues
• Gender integration policies for resorts, spas, and F&B outlets

A key change in 2025 is the expanded use of Compliance Dashboards, which all licensed operators are required to maintain and submit quarterly to the Ministry of Tourism, covering metrics on service quality, environmental impact, and national employment.

Talent Development and Saudisation 2.0

In response to the growing demand for skilled human capital, 2025 has seen the rollout of Tourism Academy KSA, a national public-private initiative launched in partnership with global hospitality schools and powered by the Human Capability Development Program.

Meanwhile, Saudisation mandates have been recalibrated under Saudisation 2.0, focusing not just on headcount quotas but on career progression, retention, and skill development. New compliance rules require hospitality operators to demonstrate that at least 50% of front-facing managerial roles are held by Saudi nationals by 2026, with fines for non-compliance now tied to profitability rather than flat rates.

Outlook: Navigating 2025 and Beyond

Saudi Arabia’s legal and regulatory ecosystem for tourism is becoming more sophisticated, structured, and investor-friendly. With the Kingdom now positioning itself as a leader in sustainable, culturally rich, and tech-enabled tourism, the role of law has shifted from a gatekeeping function to an enabling force.

Operators, developers, and investors must remain agile, aligning not only with current requirements but also anticipating the direction of legal and policy evolution. Regulatory foresight, strategic localisation, and digital compliance integration will be essential in navigating this high-growth, high-reward environment.

As Vision 2030 enters its most critical phase of execution, the tourism sector stands as a global case study of how law, policy, and ambition can converge to reshape a nation’s identity on the world stage.

In today’s rapidly transforming Saudi economy, competitive fairness is not just a regulatory ideal it is a legal imperative. As the Kingdom accelerates toward its Vision 2030 goals, the role of competition law has emerged as a cornerstone of the national legal and economic agenda. The Competition Law, administered by the General Authority for Competition (GAC), serves as a powerful instrument to protect market integrity, promote innovation, and ensure consumer welfare across all sectors of the economy.

The Legal Pillar Behind a Diversified Economy

Saudi Arabia’s Competition Law was first enacted in 2004 and subsequently amended significantly in 2019 to reflect international best practices. These reforms weren’t merely technical—they were strategic. They signalled a departure from informal market controls and a move toward structured oversight, particularly in sectors newly opened to privatisation and foreign investment.

The law’s provisions go beyond penalising monopolistic behaviour. They aim to create a level playing field in which entrepreneurship can flourish and SMES can scale without artificial barriers. By prohibiting practices such as price fixing, collusion, and abuse of dominance, the law safeguards not only current competition but also the market’s future dynamism.

Market Power and the Risk of Overreach

Holding market power in Saudi Arabia is not unlawful. But misusing it is. This distinction is central to how the law operates. Firms with significant market share—typically 40% or more—must exercise heightened caution. Predatory pricing, exclusive supply arrangements, or unjustified refusals to deal can trigger scrutiny, particularly where such conduct suppresses innovation or deters entry by smaller players.

Merger control, another key pillar of the law, has been reshaped to ensure that consolidation does not come at the cost of market diversity. High-value mergers and acquisitions must be pre-notified to the GAC, which retains the authority to approve, condition, or prohibit deals that may distort market structure.

The Cost of Non-Compliance

Enforcement in Saudi Arabia is no longer theoretical. The GAC has rapidly scaled its investigative and sanctioning powers, issuing significant penalties in recent years. These include fines of up to 10% of a company’s annual revenue, or SAR 10 million where revenue is unquantifiable, as well as structural remedies such as the unwinding of anti-competitive agreements or forced divestitures.

But compliance is not just about avoiding fines. It is about fostering a culture of lawful competition. The GAC actively engages with the business community through guidelines, public consultations, and awareness campaigns, particularly targeting SMES and new entrants who may lack in-house legal infrastructure.

International Context and Cross-Border Relevance

As Saudi Arabia emerges as a regional investment hub, the implications of its competition law extend far beyond its national borders. The GAC’s collaboration with international authorities and participation in multilateral fora underscore the Kingdom’s commitment to global norms, particularly in sectors such as e-commerce, fintech, and digital infrastructure.

For multinational corporations, this means increased scrutiny of both local and global practices. Joint ventures, pricing strategies, and supply agreements must be reviewed not only for commercial soundness but also for compliance with Saudi competition principles, which are increasingly harmonised with EU and OECD frameworks.

Why Legal Insight Matters

The complexity of competition law in Saudi Arabia lies not only in its rules but in its application. Many businesses fail to recognise that informal understandings, overly aggressive pricing, or exclusivity clauses can raise red flags. As enforcement sharpens and legal thresholds become more defined, proactive legal review and risk assessment are essential.

Boards and executives must view competition law not as a constraint, but as a strategic framework that rewards ethical growth, fosters investor confidence, and supports the Kingdom’s broader economic goals.

Saudi Arabia’s Competition Law is more than a regulatory tool—it is a signal of the Kingdom’s maturity as a rules-based economy. As new sectors open and digital markets expand, the law will continue to evolve. But the message remains clear: market success must be earned through innovation, not protected through dominance.

The Commercial Courts Law was issued on 15/08/1441 AH, corresponding to 08/04/2020 AD, by Cabinet Decision No. 511 dated 14/08/1441 AH. This law outlines the organizational structure of the commercial courts, the types of cases under their jurisdiction, and the procedural requirements to be followed by parties in commercial lawsuits, such as legal notifications, evidence procedures, and limitation periods.

Article 96 of the law states: “This law shall come into effect sixty (60) days from the date of its publication in the official gazette, and it shall repeal any provisions in conflict with it.” Since the law was published in the official gazette (Umm al-Qura) in issue No. 4827 on 24/08/1441 AH, corresponding to 17/04/2020 AD, it came into effect exactly sixty (60) days later, i.e., on 25/10/1441 AH, corresponding to 17/06/2020 AD.

The legislator has provided a fundamental rule for determining the validity of a commercial claim based on the expiration of the statute of limitation for pursuing such claims. This is set out in Article 24 of the law, which reads: ” Absent a specific provision, the statute of limitations for claims falling under the jurisdiction of the commercial court shall be (five) years from the date of the cause of action, unless the defendant confirms the claim, or the Claimant presents an acceptable justification to the court.”

Thus, if a right (or debt) arose on a certain date, the Claimant must present their claim before the commercial court within five (5) years from the date the right arose; otherwise, the court will dismiss the claim due to the expiration of the statute of limitation. Exceptions to this rule include cases where the Defendant confirms the claim or where the Claimant provides an acceptable justification as deemed by the court.

Recognizing that applying this rule generally could unfairly disadvantage those with rights that arose and have already passed the prescribed limitation period (five years) before the issuance of the law, the legislator issued a clarifying rule in the Implementing Regulations of the Commercial Courts Law. This rule explains how the limitation period should be calculated in exceptional cases. Article 36 of the executive regulations stipulates: “If the right being claimed arose before the effective date of this law, the period specified in Article 24 of the law shall be calculated starting from the effective date of the law.”

This means that any commercial right that arose before the issuance of the Commercial Courts Law will have its limitation period for being heard and adjudicated within five (5) years, starting from the law’s effective date of 25/10/1441 AH, corresponding to 17/06/2020 AD. Therefore, it is crucial to note that the exception to the statute of limitation period for rights arising before the law’s issuance will expire this year, specifically on 24/10/1446 AH, corresponding to 22/04/2025 AD.

For more information, please contact Ibrahim Alabdali, Managing Associate at ibrahim.alabdali@hmco.com.sa or Raghad Moharraq, Associate at raghad.moharraq@hmco.com.sa

We are delighted to share our legal insights in the latest ICLG Franchise 2025 edition, where we cover franchising in Saudi Arabia. We offer a comprehensive overview of the regulatory and legal framework surrounding franchise operations in the Kingdom. This framework is governed by the Franchise Law, promulgated by Royal Decree No. M/22 in 2019, and its associated implementing regulations.

The Franchise Law defines franchising and establishes requirements for franchisors, including mandatory pre-sale disclosures, registration of franchise agreements, and the protection of intellectual property through the Saudi Authority on Intellectual Property (SAIP). The law also outlines compliance with competition regulations and lays down procedures for dispute resolution, often involving arbitration.

One key aspect of franchising in Saudi Arabia is the requirement for franchisors to have at least one year of operational experience before offering franchises. This ensures that franchisors have established a viable business model before expanding through franchising.

Franchisors must also register trademarks and any relevant intellectual property, while businesses must comply with foreign investment laws if they involve non-Saudi ownership.

Additionally, the Saudi market offers opportunities for establishing franchise businesses through various legal entities, most commonly limited liability companies (LLCs). The recent introduction of simplified joint-stock companies provides additional flexibility.

The legal environment is evolving to support the growing franchise market, reflecting Saudi Arabia’s broader efforts to diversify its economy under Vision 2030.

This guide also addresses the protection of franchisor interests, franchisee rights, and the importance of adhering to local laws, such as Sharia principles and labor laws. In addition, it discusses practical matters like competition law, real estate, and online trading, offering crucial insights for both local and international franchisors looking to enter the Saudi market.

Download the guide here