Article 36 of the Saudi Privatization Law
المادة 36 من نظام التخصيص
This article applies to foreign investors the same criteria and procedures as local ones in tendering and awarding privatization projects, and gives them the same treatment in everything arising from the Law or the contract.
Official text (Arabic)
This article has not been amended since the law was issued.
دون الإخلال بأحكام الأنظمة، وبأي التزام للمملكة بموجب الاتفاقيات الدولية أو الإقليمية التي تكون المملكة طرفًا فيها، تُطبَّق على المستثمر الأجنبي المعايير والضوابط والإجراءات ذاتها المطبقة على المستثمر المحلّي في عملية طرح وترسية مشاريع التخصيص، ويتمتع المستثمر الأجنبي بالمعاملة نفسها التي يتمتع بها المستثمر المحلّي في شأن أي إجراء، أو شرط، أو حق، أو التزام؛ ناشئ عن النظام أو العقد (أو العقد التابع).
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 36 explained in plain English
This article sets the principle of equality between the foreign investor and the local investor in privatization projects:
- In tendering and award: the same criteria, controls and procedures applied to the local investor are applied to the foreign investor.
- In rights and obligations: the foreign investor enjoys the same treatment as the local investor in any procedure, condition, right or obligation arising from the Law, the contract or the subsidiary contract.
The limits: this applies without prejudice to:
- The provisions of other laws; some laws may restrict foreigners in certain fields.
- Any obligation of the Kingdom under international or regional agreements to which it is a party.
In practice, a foreigner is not discriminated against in a privatization competition merely for being foreign, and does not receive special privileges under this Law either. But the foreigner should check other laws that may impose restrictions in the project's field.
This links to Article 35, which allows a language other than Arabic with the competent authority's approval, and to Article 37, which regulates a foreign investor leasing real estate in Makkah and Madinah. Anyone considering entering a privatization project as a foreign investor should consult a lawyer who specializes in foreign investment.
Practical example
A European company and a Saudi company submitted bids for a privatization project. Both must be evaluated using the same criteria and procedures, and the European company may not be excluded merely because it is foreign, subject to what other laws may provide.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 36 of the Saudi Privatization Law
Can a foreign investor take part in privatization projects?
Yes. The same criteria, controls and procedures that apply to the local investor in tendering and award apply to the foreign investor.
Are there limits on this equality?
Equality applies without prejudice to the provisions of other laws and to the Kingdom's obligations under international and regional agreements.
More articles on Tendering and Awarding Privatization Projects
- Article 5
The article leaves it to the Implementing Regulations to specify the privatization methods available for public-private partnerships or asset ownership transfers, and the conditions and controls for each method.
تحدد اللائحة التنفيذية أساليب التخصيص الممكن اتباعها والمتعلقة بالشراكة بين القطاعين العام والخاص، أو بنقل ملكية الأصول، والشروط والضوابط اللازمة لكل أسلوب من ه
- Article 12
Privatization projects are generally offered through public competition, and may be offered through limited competition, direct contracting or other means suited to the project; the regulations set the rules for each means.
1- يتم طرح مشروع التخصيص من خلال منافسة عامة، ويمكن طرحه عن طريق منافسة محدودة، أو بالتعاقد المباشر، أو غير ذلك من وسائل الطرح المناسبة بحسب طبيعة المشروع. 2- ي
- Article 13
The executing entity may cancel the offering of a privatization project at any time before signing the contract, with the competent authority's approval, in the public interest. Competitors are not entitled to compensation unless the Center's board of directors decides otherwise.
للجهة التنفيذية في أي وقت قبل توقيع العقد إلغاء طرح مشروع التخصيص، بعد موافقة الجهة المختصة متى رأت في ذلك تحقيقًا للمصلحة العامة. وفي هذه الحالة؛ لا يستحق أي م
- Article 32
The Center's Board sets the rules for tenders and procurement in privatization contracts and for State leasing and vacating of real estate in coordination with the State Properties Authority, and the general laws apply where there is no special provision.
1- يضع مجلس إدارة المركز الأحكام المنظمة للمنافسات والمشتريات لجميع التعاقدات اللازمة لتنفيذ عمليات التخصيص. 2- يضع مجلس إدارة المركز -بالتنسيق مع الهيئة العامة
- Article 35
Arabic is the language of privatization tender documents and of concluding contracts and subsidiary contracts, and another language may be used after the competent authority's approval.
تكون اللغة العربية هي اللغة التي تصدر بها وثائق الطرح ويُبرم بها العقد -أو العقد التابع- ويجوز إصدار وثائق الطرح وإبرام العقد -أو العقد التابع- بلغة أخرى بعد مو
- Article 40
The Implementing Regulations set the rules for implementing the Privatization Law, including the project document, project priorities, selecting consultants, monitoring contracts, the effect of emergencies, and criteria for treating a project as privatization.
1- تحدد اللائحة التنفيذية الأحكام اللازمة لتنفيذ النظام بما في ذلك ما يأتي: أ- الأحكام المتعلقة بوثيقة مشروع التخصيص، وآلية التواصل بالقطاع الخاص. ب- الأسس اللا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.