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The Riyadh Charter for Artificial Intelligence: Legal Implications for Saudi Arabia

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The Riyadh Charter for Artificial Intelligence is more than a symbolic statement of intent. It reflects a decisive shift in how Saudi Arabia intends to govern emerging technologies, not through caution, but through clarity. The Kingdom has recognised that AI will sit at the centre of its digital economy, public services, industrial transformation, and investment landscape. With that recognition comes a simple truth: no jurisdiction can scale AI without establishing who is responsible, what standards apply, and how risks will be managed. The Charter is the start of that legal architecture.

In practice, the Charter signals that Saudi Arabia is preparing to regulate AI in the same way it regulates financial services, healthcare, data, and critical infrastructure through structured controls, defined accountability, and enforceable expectations. Rather than waiting for global frameworks to mature, the Kingdom is positioning itself as a rule-setter. This means organisations operating here should prepare for a future in which AI systems cannot simply be deployed because they are innovative; they will need to be justified, monitored, and explainable.

This matters because AI is already influencing decisions that affect people’s rights, access, and opportunities. Credit scoring, hiring tools, predictive analytics, automated compliance checks, content moderation, and medical decision-support systems are not theoretical issues; they are real technologies already in use. The Charter anticipates this reality and places responsibility firmly back on humans. It expects organisations to know how their systems work, understand the data used to train them, monitor for bias in outcomes, and retain the ability to intervene.

The Charter also reinforces one of Saudi Arabia’s strongest legal themes data sovereignty. With the Personal Data Protection Law now fully enforced, the Charter supports a future in which AI models trained on Saudi data must comply with Saudi rules. That includes lawful processing, transparency, minimisation, cybersecurity, and restrictions on international data transfers. Many global AI models cannot meet these standards today, meaning companies will need to revisit how datasets are sourced, how cloud infrastructure is structured, and how transparency obligations to regulators and individuals are met. AI built on ambiguous, scraped, or non-compliant data will struggle to find a home under Saudi law.

Commercially, this triggers a second shift: AI contracts will need to evolve. The traditional software-as-a-service template is no longer adequate. Organisations will need clarity on model governance, training data provenance, audit rights, IP ownership, liability limits, and accuracy thresholds. Vendors will be expected to disclose more. Deployers will have to validate more. Boards will need to review more. The Charter implicitly raises the standard of care expected of everyone in the AI supply chain, from developers and integrators to operators and end users.

There is also a strategic dimension. By shaping its own AI governance narrative, Saudi Arabia is sending a signal to investors, foreign companies, and regulators: the Kingdom is not simply adopting AI; it is shaping the environment in which AI can safely and confidently scale. This is essential for sectors such as finance, healthcare, energy, aviation, and smart city development, where the risks of opaque or untested algorithms are high. A clear framework reduces uncertainty and provides confidence to international partners seeking stability in emerging markets.

The Riyadh Charter is laying the foundations for the Kingdom’s future AI law. While the Charter itself is not yet legislation, its principles of accountability, transparency, fairness, human-centric design, and responsible use foreshadow the standards that regulators will enforce. Organisations that begin preparing now will be better positioned to comply and will face fewer operational disruptions as formal regulations are introduced.

For businesses, the direction of travel is unmistakable. AI cannot be an uncontrolled layer added to existing systems. It must be governed with the same seriousness as financial reporting, cybersecurity, and data protection. Senior leaders will soon be expected to demonstrate that their AI systems are safe, explainable, and legally grounded. Those who move early will not only reduce risk but also gain a competitive advantage as AI adoption accelerates across the Kingdom.

The Riyadh Charter ultimately tells a story of ambition aligned with responsibility. It positions Saudi Arabia as a global voice in shaping AI governance. It offers organisations a clear signal: innovation will be supported, but only within a framework that protects people, ensures accountability, and strengthens trust.

The Impact of Saudi Vision 2030 on Professional Football

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Saudi Vision 2030 represents a transformative roadmap for economic, social, and cultural development in the Kingdom, and professional football has become a central component of this ambitious agenda. By integrating sports into national development strategies, Vision 2030 aims to enhance the quality of domestic leagues, increase international competitiveness, and promote Saudi Arabia as a regional hub for professional football. The initiative seeks to drive not only athletic excellence but also economic growth, job creation, and community engagement, positioning football as a catalyst for broader societal development.

 

Infrastructure Development and Stadium Modernisation

One of the most visible impacts of Vision 2030 on professional football is the significant investment in infrastructure. Modern stadiums, training facilities, and youth academies are being constructed to meet international standards, providing skilled players with high-quality environments for training and competition. Infrastructure upgrades also enhance the fan experience, attracting larger audiences and boosting tourism. Economically, these investments stimulate local businesses, generate employment opportunities, and support sustainable growth within the sports sector.

Professionalisation of Clubs and League Governance

Vision 2030 promotes the professionalisation of football clubs and the Saudi Pro League, requiring clubs to adopt robust governance structures, transparent financial management, and strategic long-term planning. Licensing and compliance frameworks, aligned with national and international standards, are being implemented to ensure accountability and sustainability. By encouraging professional management practices, the initiative increases the commercial appeal of clubs, attracting domestic and international investors and partnerships, while raising the overall competitiveness of Saudi football.

Talent Development and Youth Programmes

A core objective of Vision 2030 is the development of domestic football talent through structured youth programmes and academies. Investments in coaching education, scouting networks, and training infrastructure enable young athletes to develop skills at a professional level, creating a pipeline of talent for clubs and the national team. By fostering homegrown talent, Saudi football reduces dependence on foreign players while enhancing national pride and the quality of domestic competitions. This focus on talent development also contributes to job creation and human capital growth in the sports sector.

Economic Growth and Commercialisation

Under Vision 2030, professional football is positioned as an engine of economic growth. Revenue streams such as broadcasting rights, sponsorship deals, merchandise sales, and ticketing are being expanded and formalised. Strategic partnerships with international leagues and clubs enhance brand visibility and attract global attention, creating new business opportunities. Clubs are increasingly operating as professional enterprises, leveraging football’s popularity to generate sustainable revenue and contribute to the Kingdom’s broader economic diversification goals.

International Competitiveness and Global Exposure

Vision 2030 emphasises elevating Saudi football onto the international stage, both through club competitions and national team success. Initiatives include hosting international tournaments, attracting high-profile foreign players and coaches, and engaging in international collaborations to improve standards and operational expertise. Enhanced competitiveness raises Saudi football’s global profile, positioning the Kingdom as a destination for talent, investment, and major sporting events, while strengthening diplomatic and cultural ties through sport.

Social and Cultural Impacts

Beyond economic and competitive outcomes, Vision 2030 recognises football as a tool for social development and community engagement. Football promotes health, teamwork, and national identity, while encouraging participation across all demographics. Initiatives to increase women’s participation in football, support grassroots programmes, and promote inclusivity are integral to Vision 2030’s broader objectives. By connecting communities through sport, professional football becomes a medium for fostering social cohesion, cultural awareness, and national pride.

Saudi Vision 2030 has fundamentally reshaped professional football in the Kingdom, driving infrastructure development, club professionalisation, talent cultivation, economic growth, and social engagement. By aligning football development with strategic national objectives, the initiative enhances both the sporting and commercial value of the game, while positioning Saudi Arabia as a leading hub for professional football in the region. The continued implementation of Vision 2030 promises sustained growth, international recognition, and long-term benefits for athletes, clubs, fans, and the broader society.

Licensing Dynamics in Saudi Professional Football: An Economic Perspective

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Professional football in Saudi Arabia has experienced rapid growth over the past decade, reflecting both the nation’s increasing economic diversification and Vision 2030’s focus on sports as a driver of social engagement and international reputation. Sport has become a significant contributor to the economy, generating revenue through ticket sales, sponsorships, broadcasting rights, merchandise, and investment in youth development. Central to this ecosystem is the licensing framework that governs clubs, players, and commercial operations, ensuring that professional football maintains financial stability, operational transparency, and competitiveness.

 

The Licensing Framework for Clubs

Saudi Arabia’s professional football clubs are required to comply with licensing regulations issued by the Saudi Football Federation (SFF) in line with international best practices. These licences cover multiple dimensions, including financial management, governance structures, infrastructure standards, youth development programmes, and legal compliance. Licensing ensures that clubs operate sustainably, meet contractual obligations to players and sponsors, and maintain the integrity of competitions. Economically, the framework incentivises investment in club facilities, professional staff, and youth academies, which ultimately enhances the market value of the league and the broader football ecosystem.

Financial and Economic Implications of Licensing

Licensing dynamics have profound economic implications for both clubs and the national football industry. Financially sound clubs attract domestic and international investors, creating opportunities for long-term partnerships and sponsorship agreements. Compliance with financial licensing requirements also mitigates the risk of insolvency, ensuring that clubs can fulfil contractual obligations to players, staff, and partners. Economically, a stable, well-regulated league increases the attractiveness of broadcasting rights, merchandise sales, and international fixtures, which together stimulate local businesses and tourism. Licensing, therefore, not only ensures regulatory compliance but also strengthens the commercial viability of professional football in Saudi Arabia.

Player Licensing and Market Regulation

Player licensing and registration play a critical role in regulating the movement, eligibility, and compensation of athletes. Licensing ensures that player contracts adhere to national and international standards, covering issues such as salary structures, transfer fees, and dispute resolution mechanisms. From an economic standpoint, regulated player markets contribute to competitive balance between clubs, protect clubs from unsustainable wage inflation, and promote talent development by encouraging investment in training and youth academies. Properly managed player licensing supports a predictable, transparent market that benefits both clubs and players while enhancing the Saudi professional league’s international reputation.

Infrastructure and Operational Standards

Licensing requirements for clubs extend beyond finances and governance to include infrastructure standards. Stadium facilities, training grounds, and medical facilities must meet specified criteria to ensure safety, spectator comfort, and player professional development. Economically, infrastructure investments generate employment opportunities, enhance fan engagement, and create avenues for ancillary revenue streams, such as event hosting and sponsorship activations. By enforcing infrastructure standards, licensing contributes to a high-quality football experience and supports the broader economic impact of the sport.

Strategic Outlook and Economic Growth

Looking ahead, the licensing system is expected to evolve in response to increasing commercialisation, international partnerships, and the growing popularity of football as both a spectator and investment asset. Clubs that proactively adhere to licensing requirements are better positioned to attract global investors, enter international competitions, and leverage commercial opportunities. Economically, this strengthens the overall market for professional football in Saudi Arabia, encourages regional competitiveness, and reinforces the sector’s contribution to national development objectives under Vision 2030.

Licensing dynamics in Saudi professional football represent more than a regulatory requirement; they are a critical economic mechanism that underpins club stability, market transparency, and sustainable growth. By ensuring compliance across financial, operational, and player-related dimensions, the licensing framework enhances both the commercial and social value of football in the Kingdom. Clubs and stakeholders that strategically engage with licensing requirements can capitalise on the sport’s economic potential, securing long-term success for professional football and contributing to the broader sports economy in Saudi Arabia.

Legal Implications of Saudi Arabia’s New Regulations for Private Sports Clubs

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Saudi Arabia’s new regulations for private sports clubs arrive at a defining moment for the Kingdom’s sports sector. What began as a national ambition to build healthier communities is now a regulated commercial ecosystem attracting investors, operators, federations, and global brands. The new framework reflects that evolution. It is no longer enough to open a facility, hire coaches, and market memberships. The sector is now governed with the same seriousness as healthcare, real estate, and education, sectors where consumer protection, financial integrity, and operational governance cannot be left to interpretation.

 

At the heart of the new regulatory landscape is a shift in responsibility. The Ministry and the Sports Federations expect private sports clubs to operate as fully accountable institutions: compliant, well governed, financially transparent, and professionally managed. This means the era of informal structures and loosely defined operating models is over. Clubs are now expected to demonstrate that they can safeguard athletes, protect personal data, maintain safe facilities, employ qualified staff, and deliver programmes aligned with national sports standards. Failure to do so is no longer a matter of customer dissatisfaction. It is a regulatory breach.

One of the most significant legal implications lies in licensing and ongoing supervision. The days of a one-off approval are behind us. Under the new regulations, licences are tied to continuous compliance, meaning clubs must maintain audited financial records, document health and safety protocols, ensure equipment standards are met, and adopt a clear governance structure. This includes defined roles for managers, technical leads, compliance officers, and risk supervisors. Regulators now expect clubs to think like professional service providers, not recreational venues.

The protection of athletes, especially minors, sits at the core of the new regime. Clubs must now meet strict requirements on staff vetting, incident reporting, safeguarding policies, and training for coaches who work with children. These are not optional enhancements; they are legal obligations designed to reduce risk and create a safe, structured environment. This shift brings Saudi Arabia in line with international sports governance standards, and it places significant accountability on club owners who can now face penalties for failing to implement appropriate safeguards. The message is clear: the physical, emotional, and psychological safety of athletes is a regulated duty.

Data protection is another area of profound impact. Sports clubs hold sensitive information including biometric data, medical records, performance analytics, CCTV footage, and children’s personal data. The Personal Data Protection Law (PDPL) applies in full, meaning clubs must obtain proper consent, justify every category of processed data, implement secure systems, and restrict cross border transfers. Many clubs will need to redesign their membership systems, upgrade their digital platforms, and ensure that their wearable technology or performance tracking tools comply with PDPL. AI enabled analysis and tracking, increasingly common in modern training environments, will require even stricter controls.

Commercially, the regulations transform how clubs’ contract with suppliers, coaches, and partners. Employment relationships must be formalised with clear contractual obligations around qualifications, training methods, professional conduct, and liability. Outsourcing arrangements for cleaning, security, maintenance, or third party trainers must include compliance clauses, insurance requirements, and defined accountability. Sponsorship and brand partnership agreements will now be scrutinised for advertising standards, athlete image rights, and alignment with regulatory codes. For many operators, this will mean updating legacy contracts that are no longer fit for purpose in a regulated environment.

Financial integrity sits at the centre of the new framework. Clubs must maintain accurate books, avoid commingling funds, and ensure proper fee structures. Refund policies, membership terms, and package structures must be transparent and fair. Regulators are paying increasing attention to misleading advertising, unfulfilled training programmes, and unauthorised hidden charges. For investors and new entrants, this clarity is welcome. It reduces risk and introduces a governance baseline that supports long term growth. For existing clubs, it requires a fundamental shift in how operations are documented, priced, and disclosed.

There is also a wider strategic dimension. Saudi Arabia’s sports sector is rapidly professionalising, and the new regulations are creating the foundations for a market capable of attracting international operators, franchised fitness brands, and private capital. Clear rules offer confidence. They define how a club should be run, what investors can expect, and how disputes will be resolved. The implications are far reaching, from real estate planning and licensing costs to workforce requirements and compliance documentation. Those who adapt early will be best positioned to secure partnerships, access government programmes, and expand across the Kingdom’s growing sports hubs.

Ultimately, the new regulatory framework tells a clear story. Saudi Arabia is no longer building a sports industry based on aspiration alone. It is building one on governance, accountability, and global standards. Private sports clubs are transitioning from community amenities to regulated institutions with legal duties and enforceable responsibilities. The operators who recognise this shift and align their structures, contracts, data practices, and workforce models accordingly will not only comply with the law but also gain a competitive advantage in a market that is becoming more sophisticated by the day.

Legal Aspects of Employment Contracts in Saudi Sports

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Employment contracts form the legal backbone of professional sports in Saudi Arabia, providing clarity on the rights, obligations, and responsibilities of athletes, coaches, technical staff, and administrative personnel. As the sports sector grows under Vision 2030, legal frameworks governing these contracts have become increasingly critical to ensure transparency, fair treatment, and compliance with national labour law and sporting regulations. Effective employment agreements not only protect the interests of clubs and sports organisations but also safeguard athletes’ professional and financial rights.

 

Legal Framework Governing Sports Employment

Employment contracts in Saudi sports are primarily regulated under the Saudi Labour Law, supplemented by regulations issued by relevant sports authorities such as the Saudi Arabian Football Federation (SAFF) and other national sports federations. The law sets out general employment standards, including minimum working conditions, termination procedures, dispute resolution, and protection of employee rights. Sports-specific regulations complement these standards by addressing the unique aspects of professional sports, such as fixed-term contracts, transfer eligibility, and performance obligations.

Key Elements of Sports Employment Contracts

A legally valid sports employment contract typically includes the identification of parties, duration of employment, salary and benefits, performance expectations, and termination clauses. Specific clauses may also address training obligations, participation in competitions, injury management, sponsorship responsibilities, confidentiality, and non-compete provisions. Including these elements ensures that both the employer and employee clearly understand their commitments, mitigating the risk of disputes and supporting long-term professional relationships.

Financial and Remuneration Considerations

Salaries, bonuses, and other financial benefits must comply with the Saudi Labour Law while reflecting industry standards for the specific sport. Contracts should clearly define payment schedules, bonus eligibility conditions, and procedures for delayed or disputed payments. Transparent remuneration clauses protect athletes from financial uncertainty and provide clubs with a framework to budget effectively for staffing costs. In professional leagues, compliance with licensing and financial fair play requirements also influences contract structures, ensuring sustainability across the sports sector.

Termination, Renewal, and Dispute Resolution

Termination clauses in sports employment contracts often address voluntary resignation, mutual termination, and breach of contract, including specific provisions for performance failure or disciplinary issues. Saudi Labour Law provides a legal framework for resolving employment disputes, which can be further supplemented by arbitration or mediation mechanisms agreed upon in the contract. Including clear procedures for contract renewal or extension allows both parties to plan for continuity, while formal dispute-resolution provisions ensure conflicts are handled efficiently and fairly.

Regulatory Compliance and National Obligations

Sports employment contracts must also consider national obligations such as Saudisation policies, visa requirements for foreign employees, and adherence to federations’ licensing rules. For foreign athletes and staff, employment agreements must ensure compliance with the Ministry of Investment and the Ministry of Human Resources regulations, including those related to work permits and residency status. These regulatory requirements provide a structured framework for lawful employment and protect both clubs and employees from legal risks.

Strategic Importance for Clubs and Athletes

Well-drafted employment contracts are essential tools for clubs to attract and retain talent, maintain operational stability, and ensure financial prudence. For athletes, these contracts provide certainty regarding remuneration, career progression, and legal protection, while enabling participation in professional competitions under regulated conditions. Legal clarity in contracts enhances professional standards across the sports sector, contributing to the broader objectives of developing Saudi Arabia into a leading sports hub.

Employment contracts in Saudi sports are more than formal agreements; they are key instruments for legal compliance, financial stability, and professional development. By adhering to labour law requirements and integrating sport-specific provisions, clubs, athletes, and technical staff can navigate the complexities of professional sports employment with confidence. A robust legal approach to contracts strengthens the integrity of sports organisations, safeguards stakeholders’ rights, and supports the sustainable growth of the Saudi sports ecosystem.

How ESOPs are transforming employee compensation in the UAE and Saudi Arabia

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Learn how market trends and legislative changes are changing employee compensation in the UAE and KSA, encouraging startups to adopt equity-based rewards.

This article was co-created by HMCo team and Carta.

For MENA’s growing startup ecosystem, equity is shifting from a nice-to-have to a key part of competitive compensation. Founders increasingly see employee ownership as a way to attract top talent, improve retention, and align teams with long-term company growth.

Despite this momentum, many companies still find it challenging to craft a well-structured employee share ownership plan (ESOP) to incentivise employees. With so many moving parts to consider, from navigating implementation rules to designing the right vesting schedules, it can be difficult for founders if they don’t get it right the first time.

Carta works with thousands of global founders and understands the complexities involved in designing the right ESOP for their team. That’s why we partnered with HMCo to outline the legal, operational, and cultural considerations for ESOPs to help founders reshape their employees’ ownership journeys in the United Arab Emirates (UAE) and Kingdom of Saudi Arabia (KSA).

What is an ESOP?

An ESOP is a long-term incentive plan (LTIP) that grants employees the right to buy shares at a predetermined strike price at a time in the future, subject to vesting. Typically, new shares are issued when the options are exercised.

When designed well, an ESOP can be a powerful tool for startups to build a culture of ownership. By giving employees a chance to own a portion of the company, you’re turning them into owners. This aligns the interests of employees with those of the company, which is an effective method to attract, motivate, and retain top talent. When you link rewards to the company’s long-term performance, ESOPs can foster sustained commitment and contribution to overall company growth.

Types of vesting structures

ESOPs typically include vesting structures which vary based on a company’s needs and may include:

  • Cliff vesting: This is the most common model where all granted options become exercisable after a defined period of time.
  • Graded vesting: This lets a portion of the options vest incrementally over time.
  • Ratable vesting: This ensures a consistent percentage of the granted options vest at regular intervals.

Many companies start with a cliff period followed by a graded or ratable vesting schedule.

Share vesting (UK article) – graph 1

Best practices for designing ESOPs

When designing ESOPs, companies must also consider various liquidity and exit strategies to help navigate key moments.

Key best practices include:

  • Implementing buyback clauses: This allows the company to repurchase shares if an employee leaves.
  • Tying exercise to a liquidity event: This ensures that options are exercisable only upon an IPO or acquisition.
  • Using alternative equity incentives: One example is to offer phantom shares, which provide cash rewards based on share price appreciation without actual equity transfer.

Companies should also consider the accounting impact of creating ESOPs, because these plans create an obligation to issue stock at a discount or pay employees in cash. Both items may require recording in the companies’ books as liabilities.

United Arab Emirates

The UAE’s legal system has multiple jurisdictions, so where you’re incorporated matters when you want to issue ESOPs.

Key jurisdictions include:

  • Onshore UAE (Mainland): Companies operating in onshore UAE are governed by the Federal Decree-Law No. 32 of 2021 on Commercial Companies. This law does not have specific rules for ESOPs, but companies can still implement such plans through internal corporate governance with the right approvals.

In onshore UAE, non-UAE nationals may face restrictions on holding shares in certain sectors. This is where options like phantom share schemes, where an entity holds the shares on behalf of the employee, can be used as alternatives.

  • Free zones: Jurisdictions like the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) offer more structured legal frameworks for ESOPs, often incorporating elements of common law. These jurisdictions make it easier to use trusts, nominee structures, and special purpose vehicles (SPVs) to hold shares on behalf of employees, ensuring compliance with foreign ownership restrictions.

Free zone companies may also need to comply with employment and securities laws relevant to their jurisdiction.

Kingdom of Saudi Arabia

In KSA, the key to issuing ESOPs is getting approval from your shareholders.

  • For a joint-stock company: This means getting approval of shareholders from at least three-quarters of the voting shares at an extraordinary general assembly meeting.
  • For a limited liability company: This means getting approval of one or more partners holding at least three-quarters of the capital.

Board approval may also be required, depending on your company’s bylaws or articles of association.

The good news is that ESOPs are generally considered an exempted offer and do not trigger filing requirements. This designation allows employers to issue unlisted, contract-based securities to employees without being subject to the full scope of applicable Capital Market Authority (CMA) regulations.

That said, the CMA does impose specific disclosures. These include quarterly notifications to the CMA detailing the total number and value of the exempted offers and reporting on any ongoing ESOP offers.

The MENA region embraces ESOPs

Most employee equity in APAC & ME is issued ...

Carta data shows that 67% of grants in Middle East (ME) startups follow a four-year vesting schedule with a one-year cliff, signaling that startups in the region are consistent in their equity vesting practices. The regional norm for structure is 25% of equity vests after the first year and the remaining 75% vests monthly thereafter.

This growing culture of ownership in the MENA region shows a fundamental shift in how companies approach talent and growth. If founders understand the process of designing a well-structured ESOP, they can not only attract and retain top talent, but also build a culture of shared success.

In MENA, where equity has become a must-have, sharing ownership is the new engine for growth.

 

DISCLOSURE: This communication is on behalf of eShares, Inc. dba Carta, Inc. (“Carta”) and HMCo. This communication is for informational purposes only, and contains general information only. Carta and HMCo are not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta and HMCo do not assume any liability for reliance on the information provided herein.

© 2025 Carta. All rights reserved. Reproduction prohibited. Regulated by the Financial Services Regulatory Authority.
The contents of this article may contain attorney advertising under the laws of various jurisdictions. Prior results do not guarantee a similar outcome. By receiving this communication you understand and agree that no information is being provided in the context of any attorney-client relationship and that nothing herein is intended to constitute legal advice. This communication is solely informational in nature, not intended as a substitute for competent legal advice from a licensed and retained attorney in your jurisdiction, and should not be so used.

Regulatory Compliance for International Media Companies Operating in Saudi Arabia

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Saudi Arabia’s media landscape has undergone significant transformation, propelled by Vision 2030’s ambition to diversify the economy and position the Kingdom as a regional media hub. For international media companies seeking to establish a presence in Saudi Arabia, navigating the regulatory framework is paramount. This article outlines the key legal and regulatory requirements, highlighting the roles of pertinent authorities and the compliance obligations that foreign entities must adhere to.

 

Licensing and Establishment

International media companies aiming to operate in Saudi Arabia must first obtain the necessary licences from the Ministry of Investment (MISA). MISA facilitates foreign investment and ensures that international entities comply with local laws and regulations. Upon securing an investment licence, companies are required to register with the Ministry of Commerce to obtain a Commercial Registration (CR), which legally authorises them to conduct business activities within the Kingdom.

The General Authority for Media Regulation (GAMR), established in 2012 and formerly known as the General Commission for Audiovisual Media (GCAM), is the primary regulatory body overseeing media activities in Saudi Arabia. GAMR is responsible for issuing licences for audiovisual media services, including broadcasting, digital content production, and distribution. Foreign media companies must obtain an Audiovisual Media Licence from GAMR to legally engage in media-related activities within the Kingdom.

Content Compliance and Cultural Sensitivity

Saudi Arabia enforces stringent content regulations to preserve its cultural and religious values. Media content, whether produced locally or imported, must align with Islamic principles and public decency standards. This includes prohibitions on content that promotes or depicts nudity, substance abuse, gambling, or content deemed offensive to public morals.

The GAMR provides detailed guidelines outlining acceptable content standards for media activities. These guidelines mandate that all media content undergoes review and approval processes to ensure compliance with Saudi Arabia’s cultural norms. International media companies must adhere to these content standards and obtain the necessary approvals before disseminating any media content within the Kingdom.

Data Privacy and Consumer Protection

The Personal Data Protection Law (PDPL), enacted in 2020, governs the collection, processing, and storage of personal data in Saudi Arabia. Under the PDPL, businesses engaged in media activities must obtain explicit consent from individuals before collecting or processing their personal data. This includes data gathered through digital platforms, online tracking, and direct marketing activities.

International media companies must implement robust data protection measures to ensure compliance with the PDPL. This includes establishing transparent data collection practices, securing data storage systems, and providing individuals with rights regarding data access and deletion. Non-compliance with the PDPL can result in significant penalties, including fines and reputational damage.

Enforcement and Penalties

The enforcement of media regulations in Saudi Arabia is stringent. The GAMR actively monitors media activities to ensure compliance with licensing requirements and content standards. Violations can lead to severe penalties, including substantial fines and potential suspension or revocation of licences.

For instance, international media companies found operating without the requisite licences may face fines up to SAR 5 million (approximately £1 million). Additionally, the Kingdom’s legal framework allows for the prosecution of offences related to misleading advertising, the unauthorised use of personal data, and the dissemination of content that contravenes public morals.

Saudi Arabia presents significant opportunities for international media companies, driven by its strategic location, growing digital infrastructure, and evolving entertainment sector. However, success in the Kingdom’s media landscape requires a comprehensive understanding of the regulatory framework and a commitment to compliance with local laws and cultural norms.

International media companies seeking to establish operations in Saudi Arabia should engage with legal professionals experienced in Saudi media laws to navigate the licensing processes, ensure content compliance, and implement data protection measures. By adhering to the regulatory requirements, foreign entities can mitigate legal risks and leverage the full potential of Saudi Arabia’s dynamic media market.

Legal Implications of Social Media Advertising in KSA

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Saudi Arabia’s rapid digital transformation has positioned it as a leader in the Middle East’s digital economy. The Kingdom’s Vision 2030 initiative underscores the importance of diversifying the economy, with a significant emphasis on digital media and marketing. As a result, social media advertising has become a pivotal component of business strategies. However, this burgeoning sector is governed by a complex legal framework designed to ensure compliance with national values, consumer protection, and data privacy.

 

Regulatory Landscape for Social Media Advertising

The General Authority for Media Regulation (GAMR), formerly the General Commission for Audiovisual Media (GCAM), is Saudi Arabia’s regulator for audiovisual and broader media content. Established in 2012, it issues licenses and oversees media content to ensure compliance with the Kingdom’s laws, culture, and policy.

In 2022, GAMR/GCAM introduced the Mawthooq permit, which requires individuals (both Saudi and non-Saudi) who earn revenue from advertising or promotional content on social media to obtain a license (fee ~SR 15,000 for 3 years). The rules came into force on 1 October 2022. Non-Saudis have additional requirements. The purpose is to formalise and regulate influencer marketing under the Kingdom’s media standards.

Failure to obtain the necessary licence can result in penalties, including fines and potential legal action.

Content Compliance and Cultural Sensitivity

Saudi Arabia enforces strict content regulations to maintain its cultural and religious integrity. Advertising content, including that disseminated through social media, must align with Islamic principles and public decency standards. This encompasses prohibitions on content that promotes or depicts nudity, substance abuse, gambling, or content deemed offensive to public morals. Advertisers are also required to ensure that their content does not mislead consumers or make unsubstantiated claims.

The GAMR provides detailed guidelines outlining acceptable content standards for social media advertising. Advertisers must ensure that their campaigns do not contravene these guidelines to avoid sanctions. Additionally, influencers and content creators are encouraged to disclose any sponsored content transparently, fostering trust with their audience and ensuring compliance with advertising standards.

Data Privacy and Consumer Protection

The Personal Data Protection Law (PDPL), enacted in 2020, governs the collection, processing, and storage of personal data in Saudi Arabia. Under the PDPL, businesses engaged in social media advertising must obtain explicit consent from individuals before collecting or processing their personal data. This includes data gathered through cookies, online tracking, and direct marketing activities. Advertisers are obligated to inform consumers about the purpose of data collection, the duration of data retention, and their rights regarding data access and deletion.

Non-compliance with the PDPL can result in significant penalties, including fines and reputational damage. Therefore, advertisers must implement robust data protection measures and ensure that their marketing practices align with the PDPL’s requirements.

Enforcement and Penalties

The enforcement of advertising regulations in Saudi Arabia is stringent. GAMR actively monitors social media platforms for compliance with licensing requirements and content standards. Violations can lead to severe penalties, including substantial fines and potential imprisonment. Individuals or entities found operating without the requisite licence may face fines up to SAR 5 million (approximately £1 million). Moreover, the Kingdom’s legal framework allows for the prosecution of offences related to misleading advertising and the unauthorised use of personal data.

In addition to financial penalties, advertisers may also suffer reputational harm, which can have long-term implications for their business operations in Saudi Arabia. Therefore, adherence to the legal and regulatory framework is crucial for the success and sustainability of social media advertising campaigns in the Kingdom.

Social media advertising in Saudi Arabia presents significant opportunities for businesses to engage with a tech-savvy and youthful population. However, navigating the Kingdom’s legal landscape requires a comprehensive understanding of the regulatory framework governing digital marketing activities. By obtaining the necessary licences, ensuring content compliance with cultural standards, safeguarding consumer data, and adhering to advertising regulations, businesses can mitigate legal risks and leverage the full potential of social media advertising in Saudi Arabia.

For businesses seeking to operate within this dynamic sector, consulting with legal professionals experienced in Saudi Arabia’s advertising laws is advisable to ensure full compliance and to capitalise on the opportunities presented by the Kingdom’s digital economy.

Club financing and expansion: The key legal considerations

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The financial management and expansion of professional sports clubs in Saudi Arabia require a nuanced understanding of both commercial law and sports governance. With the Kingdom’s sports sector undergoing rapid professionalisation and internationalisation, clubs are increasingly seeking strategic financing options to support infrastructure development, talent acquisition, and market expansion. Navigating these opportunities effectively necessitates careful legal planning to ensure compliance with regulatory frameworks and protect the club’s long-term interests.

 

Legal Framework Governing Club Financing

Professional clubs operate within a multi-layered legal environment. At the national level, Saudi law governs commercial transactions, corporate structures, financial reporting, and contractual obligations. Simultaneously, clubs must comply with the rules and regulations issued by sport’s governing bodies such as the Saudi Arabian Football Federation (SAFF) and the Saudi Professional League (SPL), which establish standards for financial transparency, sponsorship agreements, and funding practices. Any financing strategy must therefore harmonise with both statutory requirements and sector-specific governance codes.

Structuring Financing Arrangements

Clubs often pursue a combination of equity investment, debt financing, and sponsorship contracts to support their operations and growth. From a legal perspective, structuring these arrangements requires careful consideration of the rights and obligations of all parties. Shareholder agreements, loan contracts, and sponsorship deals must clearly define repayment obligations, revenue sharing, and dispute resolution mechanisms. Additionally, clubs must ensure compliance with any restrictions on ownership, foreign investment, or related-party transactions stipulated by sports authorities or corporate regulations.

Due Diligence and Risk Management

Due diligence is a critical step in any financing or expansion initiative. Legal advisers must review the club’s financial statements, existing contractual obligations, pending disputes, and compliance with regulatory standards. Identifying potential risks,such as unpaid liabilities, encumbrances on assets, or non-compliance with league regulations, allows clubs and financiers to negotiate protective clauses, secure guarantees, or obtain insurance coverage. Thorough risk assessment not only safeguards the club’s financial position but also enhances its credibility with investors and partners.

Regulatory Compliance and Reporting

Transparency and regulatory compliance are central to sustainable club financing. Clubs must adhere to reporting obligations mandated by corporate law, the CMA (Capital Market Authority), and sports regulatory bodies. This includes maintaining accurate accounts, submitting timely financial disclosures, and ensuring that sponsorship or funding agreements are approved in accordance with governance guidelines. Failure to comply can result in financial penalties, suspension of club activities, or restrictions on participation in domestic and international competitions.

Expansion Considerations

Expansion, whether through new facilities, academies, or international partnerships, introduces additional legal complexities. Property acquisitions, construction contracts, and land use arrangements must comply with local real estate and zoning regulations. Strategic partnerships or joint ventures, particularly with foreign investors, require careful contractual drafting to define roles, profit allocation, and dispute resolution. Intellectual property rights, including branding and merchandising, also become increasingly important as clubs seek to capitalise on commercial opportunities beyond domestic markets.

Dispute Resolution Mechanisms

In the event of financing disputes, clubs and financiers may resort to arbitration or mediation, particularly through specialised bodies such as the Saudi Sports Arbitration Center (SSAC). Incorporating clear dispute resolution clauses in contracts ensures that conflicts are addressed efficiently, confidentially, and in accordance with Saudi legal standards. This proactive approach mitigates reputational risk and safeguards the long-term viability of the club’s financial and expansion strategies.

Club financing and expansion in Saudi Arabia require a strategic blend of commercial insight, regulatory compliance, and legal foresight. By carefully structuring financing arrangements, conducting comprehensive due diligence, and adhering to governance requirements, clubs can secure the capital necessary to grow sustainably while minimising legal and financial risks. Understanding the legal landscape is therefore not only essential for protecting the club’s current operations but also pivotal in realising its long-term ambitions both domestically and internationally.

Media Licensing Challenges in Saudi’s Streaming Boom

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Saudi Arabia’s media landscape is undergoing a significant transformation, driven by the rapid expansion of streaming platforms and a concerted effort to diversify the economy under Vision 2030. However, this burgeoning sector faces a complex regulatory environment that presents unique challenges for both local and international content providers.

 

Regulatory Framework for Streaming Services

The cornerstone of Saudi Arabia’s media regulation is the Audiovisual Media Law (Royal Decree No. M/33, 2017), which mandates that all entities engaging in audiovisual media activities, ranging from satellite broadcasting to over-the-top (OTT) services, obtain the appropriate licences. This includes platforms offering video-on-demand (VOD), IPTV, and streaming services, whether they operate on a subscription, pay-per-view, or ad-supported model. The law aims to ensure that media content aligns with the Kingdom’s legal, cultural, and religious standards.

In addition to the Audiovisual Media Law, the Communications, Space and Technology Commission (CST) introduced regulations for digital content platforms in October 2024. These regulations require both local and international streaming services to register with the CST, appoint a local representative, and adhere to content and operational standards.

Licensing Procedures and Requirements

Navigating the licensing process in Saudi Arabia involves several steps. Entities must first secure an investment licence from the Ministry of Investment (MISA), particularly for foreign-owned firms, which typically requires establishing a limited liability company. Subsequently, a media licence must be obtained from the General Authority for Media Regulation (GAMR), which oversees the compliance of media content with national standards.

The licensing process is thorough, involving scrutiny of content offerings, business operations, and adherence to cultural norms. Platforms must demonstrate their commitment to producing or distributing content that aligns with Saudi values, which may necessitate content modifications or the development of region-specific programming.

Content Restrictions and Censorship

One of the most significant challenges for streaming services in Saudi Arabia is the stringent content regulations. The Kingdom enforces strict guidelines that prohibit content deemed offensive to Islamic teachings or contrary to public morals. This includes restrictions on nudity, LGBTQ+ themes, excessive violence, and content that may be considered politically sensitive or critical of the government.

As a result, international streaming platforms often face pressure to alter or censor their content to comply with these regulations. This can lead to challenges in maintaining the integrity of original programming while meeting regulatory requirements. Platforms must navigate these restrictions carefully to avoid penalties and ensure continued access to the Saudi market.

Compliance Costs and Administrative Burdens

The regulatory landscape in Saudi Arabia imposes significant administrative and financial burdens on streaming services. Compliance with licensing requirements involves not only the payment of application and annual fees but also the appointment of a local representative and adherence to regular financial reporting obligations.

For smaller or emerging platforms, these costs can be prohibitive, potentially limiting their ability to enter or sustain operations within the Saudi market. The administrative complexity further complicates the process, requiring a thorough understanding of local laws and regulations to navigate successfully.

Enforcement and Intellectual Property Concerns

While Saudi Arabia has made strides in regulating its media sector, challenges remain in enforcing intellectual property rights. The Kingdom has faced criticism for its handling of piracy issues, particularly concerning the illegal streaming service BeoutQ, which has been accused of broadcasting premium content without authorisation.

These enforcement challenges undermine the efforts of legitimate streaming services and create an uneven playing field. Intellectual property violations not only affect revenue streams but also damage the reputation of the Saudi media market.

Saudi Arabia’s streaming industry presents significant opportunities for growth and investment, driven by a young, tech-savvy population and a government committed to diversifying the economy. However, the complex regulatory environment poses substantial challenges for streaming services seeking to operate within the Kingdom.

To succeed, platforms must navigate a multifaceted licensing process, adhere to strict content regulations, manage compliance costs, and address intellectual property concerns. Understanding and adapting to these challenges is crucial for any entity looking to establish a presence in Saudi Arabia’s dynamic media landscape.

 

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