JEDDAH – The Privatization Law, recently allowed by the Council of Ministers, permits foreign investors to rent reak estates within the areas of the holy cities of Makkah and Madinah.
The leasehold property is for a time equivalent to the time of the contract signed between the investor and one of the executive authorities and this will be for the purpose of building a privatization project.
The key condition is that investors should utilize the property for the sole motivation behind executing a privatization project while living with every one of the directions explained in the agreement.
The law insisted that if the investor violates any of the settled upon conditions, he will initially be informed about this infringement by the executive to rectify them, and assuming the predefined period elapses without the infringement being revised, the rent contract closed with him will be ended.
The law restricts private establishments, which have agreed on a privatization contract, from completely or partially assigning the partnership contract to other parties other than after getting written approval from the executive authority.
It is also possible to subcontract with others to execute any of the works in relation to the public-private participation (PPP) project, given that there are no breaches of duty of the main contract holder, and is directly responsible to the executive authority.
The acts of the private sector establishments that marked the agreement won’t be classified monopolistic if their exercises are considered as a responsibility under the agreement, regardless of whether these activities have affected or limited competition.
The law specifies that the time of the association contract between the general population and private sectors doesn’t surpass a long time from the date of the mark, regardless of whether for the first agreement time frame or after the reestablishment.
It is also permitted to surpass this period dependent on the proposal of the executive authority.
If the time of the period between the two gatherings’ closures, and the venture is re-offered and awarded to a similar party, at that point the lapsed agreement isn’t considered as an augmentation or recharging of the past one.
It is critical that in the past non-Saudis were not allowed to own real estate in Makkah and Madinah, and they were permitted only to rent for a most extreme time of six years — a two-year rent, sustainable close to twice.
However, in late 2019, the Premium Residency holders are permitted to possess family property in Makkah and Madinah for a most extreme rent time of 99 years.