The Year in Review, Kingdom of Saudi Arabia, 2024

One more year closer to the vision of 2030 and the socio-economic transformation of the KSA marches on. The development of the legal framework and key industry sectors are fundamental to this transformation. This article illustrates some of the developments that have taken place during 2024.

Legal Framework

On 21 January 2024, the Saudi Gazette published news that the first administrative enforcement court is to be established in Riyadh. In a move to boost investor confidence, the court has jurisdiction to enforce court decisions including those issued against ministries and government agencies.

The Saudi Centre for Commercial Arbitration (‘SCCA’) aims to attract both foreign and domestic investment by streamlining the Alternative Dispute Resolution mechanisms of arbitration and mediation. In March 2024, the SCCA expanded its partnership with the Jus Mundi database, and it staged the inaugural Riyadh International Disputes Week (‘RIDW’), bringing together some four and a half thousand individuals from seventy-nine countries. At RIDW24, the SCCA concluded an agreement with the Chartered Institute of Arbitrators (‘Ciarb’) for the SCCA to host the new Ciarb Saudi Arabia Branch, inaugurated in August 2024. RIDW25 is due to take place from 23-27 February 2025.

Insurance

In November 2023 a new independent regulatory body was established, the ‘Insurance Authority’ (‘IA’), and in March 2024, the Council of Cooperative Health Insurance transferred to the IA. There is currently a National Strategy reviewing existing laws/regulations and a new Insurance Law is being drafted.

From 15 April 2024, the IA’s decision to localise all sales positions in insurance products became effective. This is likely to impact Saudisation rates within the insurance sector, and generally within KSA.

On 25 July 2024, the IA issued the Standard Insurance Policy of Civil Liability for Populated Areas and High-Risk Activities. The policy is applicable in high-risk areas, activities, and populated areas. It covers lability within KSA to a third party for material damages or bodily injury, as based on a final judicial verdict or a settlement agreed between the insurer and the insured.

The policy specifies minimum limits of civil liability for operations within sectors such as hotels and tourist accommodation; amusement parks and entertainment venues; commercial exhibitions and conferences; hospitals and medical centres; elderly accommodation and childcare facilities; and certain industrial activities, such as site cleansing for instance. It is prohibited to insure for less than the prescribed minimum limits, although it is permitted to purchase higher amounts of cover.  

In addition to common exclusions (such as natural disaster, war, rebellion, terrorism, pollution, contamination, cyber incident etc.) the policy excludes damages to property owned by the insured; the insured’s contractual liability to its employees; and liabilities arising from the insured’s professional liability risks, its products, and its mechanically propelled craft/vehicles.

This standard policy was then followed on 27 August 2024, by the issuance of the Standard Insurance Policy of the Compulsory Health Insurance for Domestic Workers and their Equivalents who number more than four.

The year 2024 also saw further mergers in the Kingdom, with those between ADNIC and Allianz Saudi Fransi (April 2024) and Buruj and MedGulf (July 2024).

1 January 2025 will see KSA insurance companies having to offer 30% of their reinsurance treaties (proportional and non-proportional) for all classes of business to the local KSA reinsurance market, in accordance with the Cession to the Local Reinsurance Market Circular of October 2022.

Data Privacy

The KSA Personal Data Protection Law (‘PDPL’) that was issued on 16 September 2021 and amended on March 2023, came into force on 14 September 2023. On 14 September 2024, the grace period for compliance expired.

The Executive Regulations to the PDPL consists of two connected regulations, namely The Implementing Regulations issued on 7 September 2023; and the Regulations on Personal Data Transfers outside the Geographical Boundaries of Saudi Arabia, as updated and issued on 1 September 2024. 

The regulatory body governing the implementation of the above is the Saudi Data and Artificial Intelligence Authority (‘SDAIA’) which regularly issues rules and guidance, such as the Rules for Appointing a Personal Data Protection Officer issued In August 2024.

Digitalisation

The digital commerce economy (estimated at US$ 5trillion globally) is growing at a much faster rate than its traditional counterpart. In July 2024, KSA joined some eighty other countries in signing a global agreement on rules governing digital commerce, including spam limitation, the recognition of e-signatures, the protection of personal data and the prevention of online fraud.

Corporate

On 17 September 2024, the Saudi Cabinet approved two new laws: the Commercial Registration Law, introducing several significant updates to the existing system; and the Tradenames Law, aimed at modernising the naming conventions for businesses and enhancing the protection of trade names. Both laws will replace the existing legislative framework and are scheduled to come into force one hundred and eighty days from the date of their publication in the Saudi Gazette.

Finance

A key pillar of Vision 2030 is for KSA to become a global investment centre through economic stimulation and diversification. On 8 November 2024, Council of Ministers Resolution No. (40) was issued updating the Foreign Investment Law of 2000. The goals are to: ensure a level playing field for domestic and foreign investors through a fair and competitive business environment; simplify business in KSA for investors; provide adequate safeguards for investor rights; and attract strategic investment, particularly in the fields of technology, renewable energy, healthcare and tourism.

Energy

On 30 June 2024, Saudi Aramco awarded fifteen lump-sum turnkey contracts for the Master Gas System Third Expansion mega project. This expansion, in collaboration with the Ministry of Energy, will see some four thousand kilometres of pipeline and seventeen new gas compression trains added to the network.

Further energy contracts were awarded in 2024, in offshore oil for example, to: replace an oil line between the Berri and Manifa fields; lay a trunkline at the Abu Safah field; and upgrade the Marjan, Zuluf and Safaniya fields.

In 2024, Saudi Aramco and its partners also announced a number of other upcoming projects, such as a petrochemicals complex in Jubail; an integrated refinery in Yanbu; and a crude oil-to-chemicals complex in Ras Al-Khair.  

Construction

KSA has performed strongly again in 2024 in awarding some US$125 billion worth of contracts, thereby exceeding its 2023 total of US$114b. Whilst the giga projects of Neom (tourism and industry); Red Sea Global (tourism); Qiddiyah (sports and entertainment); Diriyah (residential, retail and cultural); and Rohsn (residential) are well known, there are multiple other enormous projects underway such as Murabba (world’s largest downtown development) and King Salman Park (world’s largest urban park) in Riyadh; Jeddah Central (residential) and Masar (commerce) in Jeddah; and the expansion of airport facilities in both cities. There is also the 2030 World Expo on the horizon and the necessary construction required to facilitate it over the coming years. 

Transport

In May 2024, as part of the drive to develop KSA into an aviation and tourism hub, Saudia ordered its largest ever purchase of one hundred and five aircraft from Airbus, announced at the Future Aviation Forum in Riyadh. Further deals are anticipated to satisfy Saudia’s demand.  

On 12 September 2024, the new airline Riyadh Air (unveiled in March 2023) launched its first non-commercial flight, from Riyadh to Jeddah, as part of the process to obtain an Air Operator Certificate from the General Authority of Civil Aviation.

On 1 December 2024, the Royal Commission for Riyadh City announced the official launch of the one hundred and seventy-six kilometre Riyadh Metro, with eighty-four stations and six lines. With sixty-four kilometres of track now open, full service is anticipated in the new year.

Sport

On 11 December 2024, KSA was awarded the hosting of the FIFA World Cup in 2034.  This will see the construction of new, and the expansion of existing, stadia. In 2025 the FIA World Rally Championship takes place in KSA, and in the years ahead the KSA market will be significantly supported by its hosting of the AFC Asian Cup in 2027, the Asian Winter Games in 2029, and the Asian Games in 2034.

Summary

We can expect further significant legal and industry-specific developments during 2025, as the socio-economic transformation of KSA continues unabated.

*This article was originally published on LexisNexis on 17 December 2024

HFW Law Firm is a full-service, sector-focused, international law firm incorporated in KSA at Level 29, Tower B, Olaya Towers, Prince Mohammed Bin Abdulaziz Road, Riyadh 12213, Saudi Arabia.

For legal assistance with any of the sectors addressed in this article please contact justin.whelan@hfw.com and/or abdulrahman.alohaly@hfw.com