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Insight into The Implementation of Cybersecurity Framework in KSA

Posted on August 5, 2021 - 3:58 pm by

Indeed, the Kingdom of Saudi Arabia (KSA) continues to lead the way within the digital transformation arena. Implementation of the ambitious “Visions 2030” and the National Transformation Plan is making that a possibility. The result is the development of a wealth of digital products, services, and data, which attracts careful attention to cybersecurity. That explains why cybersecurity is not only a concern for players in the private sector in KSA but a matter of national security as well. The recent announcement by Saudi Arabia’s Communications and Information Technology Commission (CITC) regarding the implementation of a regulatory framework to improve cybersecurity in the Kingdom confirms that fact. The idea behind the “cybersecurity regulatory framework” for service providers in the postal services, communications, and IT sectors is raising service vendors’ security levels. The framework allows financial institutions with an affiliation with SAMA to identify and address risks relating to cybersecurity.  As such, member organizations must adopt the cybersecurity framework to foster online services and information assets protection. Note that the framework aims to periodically evaluate the effectiveness of cybersecurity controls and assess the maturity level at member organizations while comparing the data with other member entities.

Scope

The framework has objectives and principles for improving, initiating, monitoring, implementing, and maintaining cybersecurity controls in member organizations. It also provides cybersecurity controls applicable to the data assets of member organizations. These controls affect;

  • Communication networks (technical infrastructure), establishments, and equipment.
    •Electronic data.
    •Such information storage devices like USB sticks, hard disks, among others.
    •Physical documents or hard copies.
    •Such electronic machines like ATMs and computers.
    •Databases, applications, electronic services, and software.

Applicability

The cybersecurity framework applies to all member organizations that are SAMA affiliates. These include;

  • The financial market infrastructure.
    •All banks operating within Saudi Arabia.

You also need to understand that the structure of Saudi Arabia’s cybersecurity framework is within four major domains. These are;

  • Third-party cybersecurity.
    •Cybersecurity governance and leadership.
    •Cybersecurity technology and operations.
    •Cybersecurity compliance and risk management.

How Does The Cybersecurity Maturity Model Work in KSA?

The measure of the cybersecurity maturity level in KSA is according to a predefined cybersecurity maturity model. The maturity model distinguishes six maturity levels (0 to 5), and any member organization focusing on achieving levels 3, 4, or 5 must meet all the criteria of the preceding maturity levels. Below are details about each of these levels.

 

a) Level 0 – Non-Existent

  • There are no cybersecurity controls in place, and there may be no current plans for implementing cybersecurity controls since the risk area is unknown at this stage.
    •Documentation is unavailable.
    •Attention or awareness for specific cybersecurity control is lacking.

b) Level 1 – Ad-Hoc

  • A full definition of cybersecurity controls is lacking.
    •There is partial or no definition of cybersecurity controls.
    •The performance of cybersecurity controls is inconsistent.

c) Level 2 – Repeatable But Informal

  • Although the execution of the cybersecurity control is standard practice, the basis is unwritten and informal.

d) Level 3 – Structured and Formalized

  • Demonstration of the implementation of cybersecurity controls is possible.
    •The definition, approval, and implementation of cybersecurity controls is in a formal and structured manner.

e) Level 4 – Managed and Measurable

  • Documentation for periodic opportunities, measurement, and evaluations is available.
    •There is a periodic assessment of the effectiveness of cybersecurity controls and improvement of the same where necessary.

f) Level 5 – Adaptive

  • Cybersecurity controls remain subject to continuous improvement.

Practical Impact of The Cybersecurity Framework

First, understand that the impact of the wide array of Saudi Arabia’s cybersecurity regulations is compliance. That is achievable by considering various practical aspects, including;

Cyber Insurance

Whether cyber insurance or the cybersecurity solution should come first is still a matter of discussion. The reason is that there is less awareness regarding the importance of cyber insurance in the KSA, which is not the case when it comes to the need for having a reliable cybersecurity solution. Also, the market is awaiting an explanation concerning coverage and the role of cybersecurity services vendors in response and vulnerability.

 

The expectation is that cyber insurance will only develop in the Kingdom according to regulation due to compliance.

Cybersecurity Policies

The development of cybersecurity policies in Saudi Arabia continues in various institutions. The objective is to ensure that establishments have clarity regarding the cybersecurity measures in place. Additionally, the policies differ between stakeholders, industries, and organization structures. As such, the need to retain cybersecurity consultants who shed light on best international practices is becoming paramount.

As much as that is the case, the solution here is adapting international practices to local requirements. Remember that adequate implementation is a necessity when setting a cybersecurity policy. The reason is that officers and directors of particular institutions assume new responsibilities following the implementation of such a policy. So, investment in solutions and talent is inevitable in this case.

Solutions and Talent

The Saudi Federation for Cybersecurity, Programming, and Drones is committing to develop talent. That is due to the surging need for solutions relating to cybersecurity technology, including hardware and vulnerability-related services. Also, international providers of hardware, cybersecurity solutions, and software are now taking on projects in the Saudi market.

That is the case due to the successful attraction of foreign investors by the Saudi Arabian General Investment Authority, access to government tenders, and the existence of procurement law. Although any cybersecurity solution has particular exposures, the emergence of new risks continues to drive increased awareness of the need for cyber insurance.

Conclusion

There appears to be overlapping responsibilities and roles of various regulators when assessing the different initiatives focusing on cybersecurity in the KSA. As such, tolerance in enforcement may accompany over-regulation, and firms with a proven track record in the Saudi market will hardly experience challenges adapting to such changes.

However, there is probably an increasing regulatory risk for multinational players in the KSA regarding cybersecurity. So, taking a slower approach while allowing the cybersecurity framework to develop fully if full compliance is commercially unachievable is a wise idea. Also, regulation support can foster the rapid development of cyber insurance in the Kingdom since compliance appears to be a major driver in this case. if you need more information on the KSA’s cybersecurity framework, contact us today!

Riyadh: a place for ambitious entrepreneurs

Posted on August 5, 2021 - 3:58 pm by

According to the Saudi Gazette, “Riyadh is named the 14th most ambitious city in the world, with a population of over 7.3 million and an ambition index score of 328 out of 500.” That’s quite amazing and entrepreneurs should capitalize on the opportunities offered by establishing and operating a business in Riyadh. Expatica, for example, stated that Saudi Arabia “SR13 billion in foreign direct investment in 2018. It also ranks 41st on the Global Foreign Direct Investment Country Attractiveness Index.” Unsurprisingly, then, Saudi Arabia makes sense for many entrepreneurs and Riyadh is a great option.

 

The most common argument by the Saudi government is that the country is open for business. However, for foreign investors, this isn’t quite that simple. As an entrepreneur, you’ll find yourself in a party that contributes to about a fifth of the country’s GDP and efforts are being made to increase it to 35% by 2030. In 2019, according to the Global Entrepreneur Monitor report based on 49 countries, about 75% of the entrepreneurs surveyed viewed Saudi Arabia as having good opportunities for their entrepreneurship.

Business Types

Today, efforts have been made to make set-up procedures for entrepreneurs in Riyadh more streamlined. Entrepreneurs can also get tons of advice from a wide range of topics, from funding to marketing to export, from the Small and Medium Enterprises Authority, Meras, and Saudi Arabian General Investment Authority’s (SAGIA) Investment Services Centre. The last source is particularly beneficial for foreign investors because they can help with meeting the required formalities. There are three options for establishing entrepreneurship in Riyadh:

 

  • Limited liability company. To establish this structure, the entrepreneur must have at least 2 shareholders, but neither have to be a citizen and have at least SR500,000 in start-up capital. The maximum number of shareholders allowed is 50. Management must represent the company and there is no formal Board of Directors. This structure also has to undergo an annual audit. This structure is more challenging due to the requirement for approval for Articles of Association, which can establish requirements for management. If there are over 20 partners, the company must have a Board of Controllers. This is the most common type of company for foreign businesses in Saudi Arabia. Liability is limited to the interest held in the company by the shareholders. This method is popular for joint ventures with Saudi partners.
  • Branch office. This structure allows foreign companies to engage in commercial activity. The parent company has full liability associated with the branch. The minimum start-up capital required is SR500,000. Notably, since no Articles of Association must be approved, this structure is easier to establish than the limited liability company. To do this, you have to expand your business and have the required license. This establishes the scope of the commercial activities that can be undertaken. Even though this business type is not incorporated locally, it must deposit an amount equal to that required for limited liability companies. This deposit is “blocked” or held until the company gets the certificate of registration, issued by the Ministry of Commerce and Industry.
  • Representative office. This structure can represent a technical and scientific office, which allows a manufacturer to use a distributor to provide technical support locally. Typically, these are only allowed by foreign pharmaceutical companies. This structure is not allowed to engage in commercial activity, nor is it allowed to earn revenue. Essentially, the technical and scientific office is only allowed when there are complex products. Another option is a short-term business to fulfil a government contract (temporary company registration). Both forms are limited to the specific reasons it was initiated and cannot involve general promotion or solicitation of services.

Taxes in Saudi Arabia

Residents don’t have personal income taxes. However, taxes are paid for investing in a business. In this case, the tax is based on the share owned by the individual, unless the company is publicly traded. In those cases, an Islamic tax, known as zakat, is applied. Disposing of shares leads to a 20% tax on capital gains. Corporation taxes are based on income at 20%. Importantly, there are no capital or stamp duties, nor are there real property or inheritance taxes in Saudi Arabia.

 

Factors to Consider

The most important thing to consider are business factors. For example, you’ll want to consider the type of business and industry of interest. Other considerations are existing trade agreements/relationships, and headquarter nationality. If you’re not a Saudi national, you’ll want to hire someone that is to act on your behalf. This is because this individual will know how to best meet the expectations of the local community and how to adhere to cultural requirements. Note though, that about 80% of the labor force in the private sector are non-Saudi. Prior to investing, ask yourself:

  • What opportunities exist?
  • Are there expected changes to regulations and, if so, what are they?
  • What protections exist for my business?
  • Are there any incentives for foreign investment?
  • Can the capital I put into my business be repatriated from Saudi Arabia?
  • What impact is held by the geopolitical environment on the market?
  • How politically and financially stable is Saudi Arabia?
  • Is Saudi Arabia’s banking and financial system sufficiently developed?

 

As can be seen, there are many different opportunities for beginning a business in Saudi Arabia. The country’s capital — Riyadh — is a great option for those that have a valuable product/service to offer. However, as can be seen, there are many different things to consider from a legal standpoint, a financial standpoint, and a cultural standpoint. Without effectively researching different opportunities, it will be harder to establish a successful entrepreneurship within Riyadh.

 

Most importantly, you’ll want to assess your motivations for wanting to establish an entrepreneurship in Saudi Arabia and how it will help you meet your goals.These types of decisions are important because this type of investment is time-consuming and can be very difficult to undertake.

 

Considering starting an office in Riyadh or have you already made the decision? Contact us to see how we can help.

Saudi Arabia and World Bank Create $100m Fund to Develop Sustainable Tourism

Posted on August 5, 2021 - 3:58 pm by

The World Bank and Saudi Arabia have formed the first-ever $100 million global fund solely dedicated to sustainable tourism. Here are some insights on the fund and how it might impact international tourism.

Travel and tourism worst hit by the pandemic

The travel and tourism sector was the worst hit after the pandemic struck. The restricted movement to curb the spread of the virus brought the industry to a grinding and painful halt, rendering millions of workers jobless and many companies bankrupt.

International travel within the country dropped by 74% due to the pandemic while global tourism GDP nearly halved in 2020. This translated to nearly $5.5 trillion in losses in the industry globally, according to Princess Haifa bint Mohammed Al-Saud, the assistant tourism minister for executive affairs and strategy.

Steps are now being taken to revive the industry and modify it to live around the virus. Major stakeholders and industry leaders are trying to navigate around this health crisis and bring the tourism industry back on its feet.

The journey to recovery

According to Ahmed Al-Khateeb, Saudi Arabia’s Minister of Tourism, this will be the first and the only global fund dedicated solely to sustainable international tourism growth, and a significant step towards a more inclusive, resilient, and sustainable future for the sector. It will also be an opportunity to create a more responsible approach to tourism that uplifts communities and drives economies while preserving the environment and respecting local cultures.

He said this during the Tourism Recovery Summit 2021 in Riyadh. He further states that the Kingdom of Saudi Arabia is acting on sustainability, inclusivity, and collaborations. These, he says, are the core principles that will be responsible for the recovery of the tourism industry globally.

The minister added that as a new destination, the priority is to protect the country’s rich nature and cultural heritage and to set new standards in sustainability. The Giga projects will combine nature-adventure and cultural attractions in a way that adheres to the highest environmental standards.

Speaking at the same summit, Zurab Pololikashvili, secretary-general of the UN World Tourism Organization (UNWTO) said it has opened a regional office in Riyadh, and it is “a sign of hope for many people.” He noted that Riyadh and the kingdom are among the few countries still investing in tourism in these pandemic days.

Travel is slowly being restored as the vaccine is being rolled out. Governments have started easing up on travel restrictions and setting up precautions such as pre and post-travel testing for tourists. All this is in an effort to contain the spread of the virus while keeping the tourism industry alive. Saudi Arabia, which is the world’s largest oil exporter, is one of the many countries opening up its borders to tourists.

A street-less and car-less city

Neom, a city located in the North of Saudi Arabia, is developing as the first-ever modern city with no streets, cars, and zero carbon emissions. It will solely rely on natural transportation modes. This is an effort by the Kingdom to create a global destination that is powered by clean energy. The project has been dubbed “The Red Sea Project.”

In addition, Neom is set to be a $500 billion modern city with a nature reserve, coral reefs, and heritage spots. It is planned to contain a huge entertainment and sports center named Qiddya, in the capital. Also, the Red Sea Development Project will feature islands off the city’s west coast.

Saudi Arabia opened up to international tourism in September 2019 and has since announced a number of projects to attract visitors. These include a $530 million fund to develop key destinations across the Kingdom. Riyadh aims to raise the contribution of its tourism sector to its GDP from 3 percent to 10 percent, in a bid to modernize its economy and steer it away from oil dependence.

Tree planting initiative

The country also aims to plant 10 billion trees, as a green initiative to protect more than 30% of the Kingdom’s land and enhance its natural resources. During Saudi Arabia’s G20 presidency, the country hosted the first-of-its-kind private sector tourism event in conjunction with major stakeholders of the sector. This was an effort to come up with policies and strategies that will dictate the future of tourism during the pandemic.

 

Princess Haifa reported that they have changed the language in Saudi Arabia, revealing that they had switched from “jobs in tourism” to “careers in tourism”. During the pandemic, 35,000 jobs were created in the Kingdom at a time when the world was losing jobs in tourism”. Saudi Arabia also saw a 33% increase in money spent in the industry because of focusing on domestic tourism.

The Princess further added that a total of $3.71 billion was spent during the summer of 2020 alone. Saudi Arabia exceeded expectations regarding domestic tourism, despite the United Nations World Tourism Organization, or UNTWO, describing 2020 as the worst year in the history of tourism.

The kingdom restarted international travel on May 17th. At the annual Arabian Travel Market, Fahd Hamidaddin, the CEO of the Saudi Tourism Authority said that this year could be a turning point for the Kingdom’s tourism industry. He said that the fourth quarter of this year is bound to be profitable to them as the countries they are targeting reach a 70% vaccination rate.

Recovery from the pandemic in sight

According to Euromonitor International, a market research firm, Saudi Arabia will have recovered from the impact of the pandemic by 2025. This is due to inbound tourism spending, predicted to reach $25.3 billion by 2025. This impressive prediction is a sure-fire way to increase tourism GDP worldwide and Saudi Arabia has offered to chip in to bail out the tourism industry from the heavy losses suffered in 2020.

Saudi Arabia has pledged to give $100 million to boost sustainable and inclusive tourism all around the globe. This unique project looks like an extension of the strides taken by the kingdom to boost local and international tourism within itself and outside.

Take advantage of this opportunity

If you plan to take advantage of this enormous potential created by the fund, you will need to work with professional and experienced lawyers who are extremely conversant with Saudi law and international occurrences. If you are looking for such lawyers, please contact HMCO today, and get the ball rolling.

Saudi Arabia Dominates Startup Investment Sector in May

Posted on August 5, 2021 - 3:59 pm by

Figures have revealed that Saudi Arabia dominated the startup investment market in the MENA region in the month of May. During the month, a total of $110 million was realized across 35 deals, according to data from Wamda, an entrepreneurship platform in the region.

According to the figures, the Kingdom of Saudi Arabia raised nearly $47 million across 9 startups, through the Series B funding by Sary, a B2B marketplace connecting wholesalers and small firms.

 

Venture capital picking in Saudi market

The managing director of Wa’ed, Wassim Basrawi, wasn’t surprised that venture capital was picking up in the Kingdom, adding that the trend had been sustained for several months as the country emerged from the ravages of the COVID-19 pandemic.

Wa’ed also announced venture capital investments in Saudi firms, including drone maker, FalconViz, IR4LAB, the blockchain artificial intelligence company, and the hydroponic technology business, the Red Sea Farms.

Basrawi also indicated that the public sector support for entrepreneurs had increased during the pandemic as many Saudi startups, such as the Red Sea Farms, were starting to attract external investors. This was one of those pointers of increased growth of venture capital investments.

The B2B e-commerce sector raised $37.6 million, raising the most interest throughout the Middle East and North Africa (MENA) region. Financial technology (FinTech) came second with $18.5 million, while logistics raised $10 million. Education technology and tourism came at a distance, raising $6.9 million, and $6 million, respectively.

Hussain Al-Alawi, speaking to Arab News, observed that the region was experiencing increased investment in venture capital and that technology companies were at the forefront, followed by FinTech, med-tech, and agri-tech. Al-Alawi is a member of the board of the Zurich-based mergers and acquisitions firm, millennium Associates, and a Saudi international partner.

He also added that technology was the driving force behind the 70% of company deals across all markets this year. This trend is also true in the Kingdom of Saudi Arabia as the country’s commitment to technology is helping drive the startup culture, and encouraging investment in the sector.

Al-Alawi also acknowledges the input of the Public Investment Fund (PIF) through projects such as NEOM in helping realize Vision 2030. They have inspired startups looking to innovate and disrupt, with support from progressive funds to help local entrepreneurs, and individuals, and institutions.

The role of women in capital investments

Al-Alawi notes Saudi’s young and highly connected population, and the evolution of the sector as prompted by the COVID-19 pandemic, as some major factors contributing to the growth of capital venture investments in the country.

Saudi Arabia seems to be far ahead when it comes to women’s participation in startups. The Kingdom posted the only investment in the women-led startup, the $6 million Gathern backing – a platform similar to Airbnb in Saudi Arabia. The figure is, however, a pale comparison to the massive $100 million posted by their male counterparts in the MENA region.

However, Al-Alawi was quick to point out that gender disparities in investments were a global issue, and were not unique to the MENA region alone. Despite outperforming their male counterparts, women-led startups received a paltry 2.6% of venture capital funding in 2019, as per CrunchBase reports.

But the situation seems to be changing. Saudi Arabia is seeing more women-led startups and businesses. When it comes to successful family businesses, the Kingdom is experiencing an upsurge in the number of females establishing their own companies, especially in e-commerce. However, many of these businesses are self-funded or family-funded instead of seeking venture capital investment.

The latest trends show that a number of women were beginning to look beyond their own businesses in Saudi Arabia, and venturing into potential investment fields in female-led startups. It’s a clear indication of the increasing role of women in the Saudi business world and their participation in new startups that helped the country dominate the startup scene in the MENA region.

Why Saudi is dominating startups in the investment sector

The venture capital in Saudi Arabia has risen to an all-time high of $151.9 million five years into the ambitious Vision 2030. This is a 124% rise from 2018 to 2020 and a massive increase from the pre-Vision rate of $7.9 million in funding.

But most of the growth can be attributed to the government’s effort to empower the entrepreneurship sector and ease foreign direct investment regulations. Foreign companies can now inject funds into the country and boost the performance of the investment sector.

The Saudi government also launched two funds of fund ventures: the Saudi Venture Capital company (SVC) and the Jada fund of funds backed by PIF. At the same time, the Saudi Telecoms Company was on the sidelines to complement the government with a $500 million funds, the largest tech fund in the MENA region.

According to Nabeel Koshak, CEO and board member of SVC, the success of Saudi startups in the diversification of the venture capital that addresses different sectors, geographies, and stages, to ensure they fill the financing gaps for startups across sectors, stages, and regions.

The SVC is also committed to investing $1 billion in venture capital funds and startups. It has so far invested in 17 venture capital firms, as well as 63 startups across different stages and sectors. The Kingdom’s venture capital company has also allocated 10% of its funds to Angel Networks. One condition for SVC for fund managers is that it must allocate some of its funds to Saudi-based companies.

It’s this kind of government backing that has propelled Saudi Arabia to the forefront of venture capital investments in the MENA region. If this trend continues, the Kingdom of Saudi Arabia will continue to dominate startups in the investment sector.

Take advantage

As Saudi Arabia dominates startups in the investment sector, there is great business potential in the Kingdom for individuals and companies. But you need to partner with experienced, professional, and knowledgeable lawyers conversant with Saudi law. They can help you understand and meet the legal requirements for harnessing venture capital and engaging in startups. If you need such lawyers, please contact HMCO today, and get the ball rolling.

Saudi Entertainment and Amusement Sector to Hit $1.17B by 2030

Posted on August 5, 2021 - 5:00 pm by

A new industry report predicts the Saudi entertainment and amusement sector to hit a massive $1.17 billion by 2030, translating to a staggering 47.65% growth per year. According to a US-based Research and Markets study, this growth compares to just $23.77 million in 2020 alone.

A unique and world-class entertainment hub

According to the US-based report, the Saudi entertainment industry has grown massively, thanks to the concerted effort by the government that has seen the construction of a unique and world-class entertainment hub in the country.

The awe-inspiring entertainment hub features cultural and historical attractions, innovative rides, and mega sporting events. The hub provides the much-needed impetus to get things moving and propel the Saudi entertainment and amusement sector to new heights.

As part of an ambitious plan for economic and social reform, ostensibly to reduce the country’s dependence on oil, Saudi Arabia has embarked on a Vision 2030 project. The project targets the entertainment industry, setting up the country as a popular leisure destination point for locals and foreigners.

Government’s hand in the growth

The Saudi government has played a significant role in the projected growth of the entertainment and amusement sector, establishing the General Authority for Entertainment (GAE) in 2016.

The GAE brought forth massive entertainment investments in the country, the most significant being the Qiddiya project announced a year later, 2017. Work at the site, located just 40 minutes from the Saudi capital, began a year later.

The project expected to cover well over 300 square kilometers of land, will include a Six Flags theme park, Formula One racing track, sports facilities including football stadia and athletes tracks, and development infrastructure. Others include an expansive range of creative and artistic and cultural activities.

One of the major highlights of the amusement park is an enthralling and record-breaking roller coaster appropriately called Falcon Flight. It’s set to be the flagship attraction of the theme park, scheduled to open in 2023, featuring 28 attractions and rides across six themed lands.

Golf legend, Jack Nicklaus, has also ventured into the Qiddiya project, offering to design a golf course in the park. It would be his first golf design project in the Kingdom. Nicklaus made the announcement in February after observing the progress of the project.

Speaking to Arab News, Phillipe Gas, CEO of Qiddiya, sought to shed more light on the project. The CEO stated the Qiddiya project is poised to become the capital of Sports, Art, and Entertainment. He further explained that the Giga project was founded on the need to overarch Saudi Vision 2030.

The Qiddiya CEO also noted that it would be a disruptive destination thrust onto the world stage as the home of the most immersive and innovative experiences on a level never seen before. It will be a celebration of life, a place for families and couples to spend quality time, and create unforgettable memories.

Just last month, Turki bin Abdulmohsen Al-Sheikh, GAE chairman, made public the results of the Ideas for Entertainment initiative. The top 20 ideas had been selected from more than 12,000 proposals submitted for the project.

The top submission dubbed “The Grove” depicted a rich experience featuring an array of activities including musical and theatrical shows, hiking expeditions, and more.

Entertainment is one of the key pillars of Vision 2030, which aims to enhance household expenditure in the sector from 2.9% to 6% by the end of the decade.

The AMC connection

The Saudi entertainment sector received a major boost in December 2020 following AMC Entertainment Holdings’ move to open a sixth movie theater in the country. AMC is the world’s largest movie exhibition company. Saudi Arabia happened to feature in the company’s plans to expand to 50 locations by 2024.

 

AMC also partnered with the Saudi Entertainment Ventures to set up the Saudi Cinema Co., with the full blessings of the Public Investment Fund (PIF). The Saudi Cinema Co. became a state investment and development cog of the country’s entertainment industry.

The entertainment project has also attracted another overseas player, UAE-based chain VOX Cinemas, who plans to build 600 giant screens across the Kingdom by 2023. This would be part of SR2 billion, an equivalent of $533 million investment.

Home-grown cinema brands have also burst onto the scene, led by MUVI Cinemas, who announced in April a massive SR820 million expansion plans for this year. MUVI plans to grow to 307 screens Kingdom-wide over the next year, and launch 23 new sites in 8 key regions.

Effect of the pandemic

The entertainment and amusement sector in the Saudi Kingdom came to a grinding halt as the anti-coronavirus restrictions came into effect in the first quarter of 2020, crippling the economy for the better part of the year.

The restrictions have begun to lift, and as of May 18, 2021, a return to the entertainment scene is gradually taking shape, albeit with social distancing policies firmly in place, as well as the wearing of face masks.

As the pandemic subsides, and mass vaccination gathers momentum across the Kingdom, it’s just a matter of time before Riyadh explodes onto the global scene as a top destination for fun-seeking enthusiasts.

The pandemic couldn’t have come at a worse time – the entertainment industry had come from a 35-year ban on cinema, which had elapsed in 2018. Some of the world’s leading lights in the cinema industry had begun moving in when the pandemic struck.

Take advantage of this growth

Without a proper and thorough understanding of Saudi and international law, you may not be in a position to tap into the growing entertainment and amusement sector. You need to work with professional and experienced lawyers to take advantage of the growth in this bustling industry. If you are planning to venture into the entertainment industry, please contact HMCO today for the next course of action.

UN World Tourism Organization Chooses Riyadh as its First Mideast HQ

Posted on August 5, 2021 - 5:01 pm by

The United Nations World Tourism Organization (UNWTO) has set up its first regional office outside Madrid, in the Middle East in Saudi Arabia’s Riyadh.

 

How did it start?

Saudi Arabia hosted the Tourism Recovery Summit and the inauguration of the new UN World Tourism Organization office in Riyadh. The Saudi Kingdom and the World Bank pledged $100 million geared towards reviving the global tourism industry.

 

This money is to be directed to spearhead sustainable international tourism growth through an international fund for comprehensive tourism. This was clearly stated by Saudi Arabia’s first ever minister of tourism, Mr. Ahmed Al-Khateeb.

The approval

The Saudi minister of tourism got the approval from the Council of Ministers to negotiate with the UNWTO on behalf of the country in regard to the draft cooperation agreement between the Saudi government and the World Tourism Organization. The agreement concerns the development of human capabilities through e-learning. The minister was expected to sign and upload the final copy of the agreement to complete the legal procedures.

 

The Ministry of Tourism was also given the green light to negotiate with the French and Omani sides before signing the draft memorandum of understanding with Omani Ministry of Heritage and Tourism, and France’s Ministry of Europe and Foreign Affairs. The Saudi tourism ministry needs to sign the documents and upload them to finalize the legal processes for setting up the UNWTO office in Riyadh.

 

Saudi Arabia is making admirable efforts to boost its international and domestic tourism to diversify its economy. The kingdom heavily relies on oil exports, and it is trying to transform the country into a market with a balance in all its sectors. This was an observation made by Dr. Paul Rivlin, an economist and senior research fellow at the Moshe Dayan Center for Middle Eastern and African Studies at Tel Aviv University.

 

This latest development can be seen as an actualization of Saudi Arabia’s Vision 2030, a strategic plan led by the kingdom’s Crown Prince Mohammad bin Salman. It is intended to create a more balanced economy and develop public service sectors. Dr. Rivlin explains that being a part of UNWTO aids these efforts by Saudi Arabia.

 

Oil and gas exports account for nearly 50% of the country’s GDP, according to the Organization of Petroleum Exporting Countries, or OPEC. The kingdom’s Vision 2030 aims at increasing the tourism sector’s GDP contribution from 3% to 10%. This plan includes the Red Sea Project that aims at creating a luxurious tourist destination on Saudi Arabia’s West Coast.

 

The appointment of Gloria Guevara Manzo

The Saudi Ministry of Tourism announced the appointment of Gloria Guevara Manzo, who worked as a former president of the World Tourism and Travel Council and Minister of Tourism in Mexico, to the position of Senior Adviser. She is to contribute her extensive experience with the Ministry’s work team in moving to the next stage of the development of the tourism sector in the Kingdom within the framework of Vision 2030.

 

Guevara Manzo is considered one of the most influential women in the sector at the global level. This is because she held the position of Minister of Tourism and CEO of the Tourism Promotion Board in Mexico between 2010 and 2012. She also succeeded in developing the tourism sector in the country and strengthening Mexico’s position as a leading global tourist destination.

 

The purpose of this regional office

The mission of the UNWTO regional office in Riyadh will be to coordinate policies and initiatives geared towards sustainable tourism across 13 countries in the Middle East. It will also promote tourism products and sustainable development.

 

It will collect important statistics for the sector and exchange information, in addition to stimulating investment in tourism assets and constituents. It will also be working to define policies related to health aspects in the tourism industry.

 

UNWTO celebrated the first-ever tourism academy in Riyadh dedicated to catering to the needs of the Middle East. It launched a program to acknowledge the best tourism villages.

 

According to Zurab Pololikashvili, secretary-general of the UNWTO – in a speech at the Tourism Recovery Summit 2021 in Riyadh — one of the priorities of this UN organization is to create new jobs and new tourist destinations. He said that this new regional office is a ray of hope to many people, as the restart of the tourism industry needs leadership and coordination.

 

The organization’s other priorities include supporting businesses, helping protect nature and cultural heritage, fighting depopulation and regional inequalities, and empowering people and communities. The office was constructed in eight months during the pandemic, he said.

 

How does it affect the rest of the world?

The UNWTO regional office in Riyadh aims to build human and institutional capacity across the pandemic-battered sector, Al-Khateeb said on the sidelines of the Tourism Recovery Summit.

 

In his words, the global tourism sector is unstable and inflexible, as shown by the pandemic. Many people lost their jobs as companies left the work system. He proposed that since the tourism sector is mostly privately owned all around the globe, each nation needs to rebuild a tourism industry that is flexible enough to weather such a crisis.

 

The new regional office in Riyadh will enable the UNWTO to create a flexible tourism industry for the Middle East and parts of North Africa. It aims to unify efforts from multiple countries to create a global protocol that benefits as many nations as possible.

 

The EU came under sharp criticism for developing a unilateral protocol for solo travel for the next summer. This they did without any input or coordination with other countries. He said that the tourism sector is one global sector that needs a unified protocol to facilitate travel.

 

This collaboration of Saudi Arabia and the UNWTO is the best effort to merge multiple efforts to bring the global tourism industry back on its feet. These measures are dedicated specifically to supporting global tourism growth and foster the capability to rebuild a damaged industry.

 

Take advantage

You can take advantage of the immense business potential created by the coming up of the UNWTO regional office in Saudi Arabia by partnering with experienced and professional lawyers well-versed in both local and international law. Contact HMCO today to begin the conversation.

The Capital Market Authority Publishes the Draft Securities Exchanges and Depository Centers Regulations for Public Consultation

Posted on January 25, 2022 - 12:00 pm by

As part of the Capital Market Authority’s (“CMA”) strategic objectives to develop the capital market, and based on the Capital Market Law issued by Royal Decree No. (M/30), dated 2/6/1424 H, the CMA Board issued its resolution to publish the draft of Securities Exchanges and Depository Centers Regulations (the “Draft Regulations”), for public consultation for a period of (60) calendar days ending on 11/8/1443H corresponding to 14/3/2022G.​

The Draft Regulations aims to develop the regulatory framework for the authorization and supervision of securities exchanges and depository centers for the efficient performance of their duties and obligations, and to further the stability and regulatory environment of the capital market, in addition to enhancing the confidence of capital market participants in support of its growth and prosperity, as well as the development of procedures that ensure effective supervision over securities exchanges and depository centers in line with international best practices and standards in this regard.

The Draft Regulations can be viewed via the following link:

The CMA, with full gratitude, would receive the opinions and comments of relevant and interested persons, through any of the following:

  • The Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform), affiliated with the National Competitiveness Center, through the following link: istitlaa.ncc.gov.sa.

The prescribed form through the following email: Laws.Regulations@cma.org.sa.

Controls for Electronic Verification of Banking Documents Issued

Posted on January 26, 2022 - 2:03 pm by

The Saudi Central Bank (SAMA) has announced the issuance of the governing rules for electronic issuance and authenticity verification of banking documents. This comes as part of its continuous efforts to improve the quality and effectiveness of electronic services provided to banking sector customers. The aim is to ensure easy financial transactions, save time and effort in obtaining bank documents and certificates, and boost confidence in the authenticity of electronically issued documents.

 

 SAMA stated that the rules include the requirements banks must observe before issuing bank documents. Additionally, banks are required to provide an E-document Verification service, a service to electronically verify the authenticity of electronic and paper documents they issue. Moreover, the document must also state any available method to verify its authenticity electronically.

 

 SAMA pointed out that the rules set out the minimum bank documents required to be issued electronically, most requested by customers, such as bank certificates, debt certificates, and no liability letters. SAMA stressed that banks must comply with the processing times specified under relevant instructions as well as set procedures and measures that ensure compliance with these rules. In this regard, SAMA stated that the rules should be effective starting from April 1st, 2022.

 

 Please visit SAMA’s website (link) to view the governing rules for electronic issuance and authenticity verification of banking documents. Please visit SAMA’s website (link).

Financial Reports for Enforcement Applications Service Launched

Posted on February 8, 2022 - 2:57 pm by

Saudi Arabia’s Justice Ministry has announced it has launched a financial report for enforcement applications service. It will be available via the Najiz portal.

It will help improve users’ experience by providing various options to get information regarding banking accounts transactions by date, application, or ID number. It will be available to institutions and individuals.

KSA Infrastructure Boom Means Big Business for Investors

Posted on February 21, 2022 - 10:56 am by

After the Covid-19 pandemic’s destabilizing impact on market conditions, Saudi Arabia is finally experiencing an economic resurgence. A Mordor Intelligence report suggests that the country will benefit from dramatic infrastructure growth at a CAGR of approximately 6% to 2026, and the launch of the new National Infrastructure Fund (NIF) certainly supports this prediction.

Due to factors such as vast population growth, extensive urbanisation, an increase in religious tourism, economic diversification and the streamlining of business processes, investment potential in KSA has reached new heights.

Now, with a trillion-dollar pipeline of projects leading to significant transformations in national infrastructure, KSA investment opportunities are both diverse and exciting, to say the least. Vision 2030’s foreign investment objectives were designed to boost infrastructure growth in Saudi Arabia, and so far, its goals are right on track.

Infrastructure projects in Saudi Arabia span various sectors

Saudi Arabia is renowned for being an oil-based economy, with the world’s largest crude oil reserves. In a bid to move beyond economic reliance on the oil industry, the KSA construction sector is generating opportunities in both residential and non-residential projects, as well as transport infrastructure. Healthcare infrastructure is set to receive $66.67 billion in investment, and the energy sector will be subject to a high-speed digital upgrade. Construction is also underway on a number of schools, hospitals and industrial hubs across the Kingdom.

Other sectors receiving investment are chemical, mining and metals, information technology, industrial and manufacturing; there are also countless opportunities to invest in real estate, hospitality, clean energy, tourism and smart cities.

The advanced infrastructure plans in KSA are driving increased global attention to the country, thus bringing a welcome boost to the leisure, tourism and entertainment industries. Similarly, the lucrative opportunities emerging across this wide range of sectors are extremely promising for investors in Saudi Arabian infrastructure projects.

Current KSA Infrastructure investment opportunities

One current investment opportunity is the entertainment mega project known as the Qiddiya project, which was launched in 2019 with a first phase completion date of 2022. This Public Investment Fund project is located approximately 45km from Riyadh, and aims to become ‘the capital of entertainment, sports and arts.’ After an original injection of $8 billion, the project requires further investment to reach its goal of accommodating 17 million annual visitors by 2035.

Another promising investment opportunity in Saudi Arabia is the Saudi Green Initiative, which offers international investment opportunities in the sustainability sector. The first wave of over 60 initiatives represented more than SAR 700b investment in the growth of sustainable living.

The legal requirements for KSA investors

There are, as can be expected, various legal elements for investors and construction businesses to consider when investing in KSA infrastructure projects. In order to remain protected while leveraging such new opportunities, it is prudent to be aware of the national requirements you will be asked to adhere to.

The following procedures must be undertaken to enable business activities in Saudi Arabia:

  • Acquire an investment license from the Saudi Arabian General Investment Authority (SAGIA)
  • Open an account with a local KSA bank to deposit your initial capital
  • Obtain a commercial registration (CR) from the Ministry of Commerce and Industry (MOCI)
  • Register with the Chamber of Commerce
  • Register with the Customs department
  • Acquire a municipality license
  • Register with the Ministry of Labour
  • Register with the General Organisation for Social Insurance (GOSI)
  • Register with the General Authority of Zakat and Tax (GAZ)

Note that since the official language is Arabic, an official translator must translate into this language before you submit it to the appropriate Government authority.

Although this is an extensive process, it may help to know that the Foreign Investment Act (FIA), a framework that permits non-Saudis to invest in KSA, aims to ensure equal treatment of all non-Saudi companies. In Article 5 of the Implementing Regulations for the Foreign Investment Law, it states that a foreign venture “shall enjoy all the benefits, incentives and guarantees enjoyed by a national project”.

With  it is evident that KSA is soon to be a worldwide hub for logistics and investment.

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