Article 5 of the Saudi Privatization Law
المادة 5 من نظام التخصيص
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.
Official text (Arabic)
This article has not been amended since the law was issued.
تحدد اللائحة التنفيذية أساليب التخصيص الممكن اتباعها والمتعلقة بالشراكة بين القطاعين العام والخاص، أو بنقل ملكية الأصول، والشروط والضوابط اللازمة لكل أسلوب من هذه الأساليب.
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 5 explained in plain English
Under Article 1, privatization takes two forms: a public-private partnership and an asset ownership transfer. But each form has several methods in practice. This article provides that the Implementing Regulations specify:
- The privatization methods that may be followed in both partnerships and ownership transfers.
- The conditions and controls required for each method.
The text does not name these methods or state their conditions; they are left entirely to the regulations. So this article alone cannot be relied on to know the suitable form for a particular project; the Implementing Regulations must be consulted.
The reason for this reference is that privatization methods develop according to market needs and the nature of projects, so placing them in the regulations allows them to be updated flexibly without amending the Law.
This article is linked to Article 4, which identifies the contracts subject to the Law, and to Article 6, which requires the executing entity to carry out a comprehensive analysis and study when requesting approvals. An investor considering entering a privatization project needs to know the method adopted for the project and its conditions, and may benefit from consulting a lawyer who specializes in commercial and investment matters.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentCommercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
Ibrahim Al Salem Law Firm
Active contributor
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Frequently asked questions about Article 5 of the Saudi Privatization Law
Who determines privatization methods?
The Implementing Regulations of the Privatization Law determine them, with the conditions and controls required for each method.
Does the Law describe the types of privatization contracts in detail?
No. The Law refers the determination of privatization methods and their conditions to the Implementing Regulations.
More articles on Tendering and Awarding Privatization Projects
- 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 36
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.
دون الإخلال بأحكام الأنظمة، وبأي التزام للمملكة بموجب الاتفاقيات الدولية أو الإقليمية التي تكون المملكة طرفًا فيها، تُطبَّق على المستثمر الأجنبي المعايير والضوا
- 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.