Article 4 of the Saudi Road Transport Law
المادة 4 من نظام النقل العام على الطرق
The article requires the concessionaire to be a Saudi or a Saudi company with Saudis holding at least 51% of capital throughout the concession, and allows the State to take a share in public transport companies.
Official text (Arabic)
This article has not been amended since the law was issued.
يشترط في الملتزم أن يكون سعوديا أو شركة سعودية مشتركا في تأسيسها على ألا تقل حصة السعوديين في رأس مالها عن (51%) طوال مدة الالتزام. ويجوز للدولة - بناء على اقتراح وزير المواصلات - أن تساهم في رأس مال شركات النقل العام الجماعي بالحصة التي تراها لازمة لتمكين هذه الشركات من تحقيق الغرض المطلوب منها.
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 4 explained in plain English
This article sets who may be a concessionaire for public collective transport, and allows the State to support the companies in this transport.
First: the nationality requirement
- The concessionaire must be a Saudi, or
- a Saudi company in whose founding he takes part, with Saudis' share of its capital not less than 51%.
The requirement is not needed only when applying; it must continue throughout the concession. If Saudis' share fell below that percentage during the period, the requirement would no longer be met.
Second: the State's participation
The State may, on the proposal of the Minister of Transport, take a share in the capital of public collective transport companies in the share it considers necessary to enable these companies to achieve the purpose required of them. The participation is optional, and the text does not set its amount.
This article is linked to Article 3, which regulates granting the concession by Royal Decree, its period and the conditions of its contract. Anyone who wants to set up a company to enter this activity, or change the ownership structure of a concessionaire company, should consult a lawyer who specializes in administrative cases and transport laws or in companies.
Practical example
A transport company was founded as a partnership between Saudi investors holding 60% and a foreign investor holding 40%, and obtained a public transport concession. If it later wants to sell shares that would make Saudis' share less than 51%, it would violate the requirement that must remain in place throughout the concession.
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 4 of the Saudi Road Transport Law
May a foreign company obtain a public transport concession?
The text requires the concessionaire to be a Saudi or a Saudi company in which Saudis' share of capital is not less than 51%.
Is it enough to have the 51% share only at founding?
No. The text requires that Saudis' share not be less than 51% throughout the concession.
Does the State take shares in public transport companies?
It may, on the proposal of the Minister of Transport, in the share it considers necessary to enable the company to achieve its purpose.
More articles on The Public Transport Concession and Concessionaire Conditions
- Article 2
The article provides that public collective passenger transport by bus within cities and between neighboring cities is by concession for a limited period, unless the government decides to manage it itself.
يكون النقل العام الجماعي للركاب بالحافلات على شبكة الطرق العامة داخل المدن أو ما بين المدن المتجاورة بطريق الالتزام ولمدة محدودة، ما لم ترى الحكومة أن تتولى إدا
- Article 3
The article governs granting the public collective transport concession by Royal Decree for no more than 15 years, renewable, and authorizes the Minister of Transport to choose among applicants and issue the concession's conditions.
يتم منح التزام النقل العام الجماعي للركاب بمرسوم ملكي ، ويحدد المرسوم مدة الالتزام على أن لا تزيد على خمسة عشر عاما، ويجوز تجديدها أو تمديدها لمدة مماثلة بقرار
- Article 5
The article allows the Minister of Transport to operate transport lines by license before the concession is granted, during its procedures, or when it cannot continue, for no more than a year, renewable.
يجوز لوزير المواصلات في المدة السابقة على منح الالتزام أو أثناء السير في إجراءات منحه؛ أن يجعل استغلال النقل العام في ذلك الخط بطريق الترخيص ، كما يجوز له إذا م
- Article 11
The article requires the concession holder to build the terminals at the start and end of lines and the intermediate waiting stations to Ministry of Transport specifications, with ownership passing to the State when the concession ends without renewal.
يتولى الحائز على الالتزام إنشاء محطات بداية ونهاية الخطوط ومحطات الانتظار المتوسطة بالطرق، طبقا للمواصفات التي تحددها وزارة المواصلات ، وعند انتهاء مدة الالتزام
- Article 15
The article allows a concession to carry goods and equipment for a fee in one or more zones to be granted to a natural or legal person, following the procedures and rules in Chapter One of the Law.
يجوز منح التزام نقل البضائع والمهمات نظير أجر في المنطقة أو المناطق لأحد الأشخاص الطبيعيين أو الاعتباريين، وتتبع في هذه الحالة الإجراءات والقواعد المنصوص عليها
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.