Privatization Law allows foreign investors to rent properties in Makkah, Madinah

The leasehold property is for a period equivalent to the period of the contract concluded between the investor and one of the executive authorities and this will be for the purpose of implementing a privatization project

  
The Jabal Omar project is one of the most important mixed-use real estate developments, located within walking distance of the Holy Mosque, in Makkah Al Mukarramah. Image used for illustrative purpose

The Jabal Omar project is one of the most important mixed-use real estate developments, located within walking distance of the Holy Mosque, in Makkah Al Mukarramah. Image used for illustrative purpose

Jabal Omar Development Company / Handout via Zawya

Okaz/Saudi Gazette

JEDDAH — The Privatization Law, recently approved by the Council of Ministers, allows foreign investors to rent real estates within the borders of the holy cities of Makkah and Madinah.

The leasehold property is for a period equivalent to the period of the contract concluded between the investor and one of the executive authorities and this will be for the purpose of implementing a privatization project.

The key condition is that investors must use the property for the sole purpose of implementing a privatization project while abiding with all the instructions spelled out in the contract.

The law affirmed that if the investor violates any of the agreed upon conditions, he will first be notified about this violation by the executive authority to rectify them, and if the specified period elapses without the violation being corrected, then the lease contract concluded with him will be terminated.

The law prohibits private establishments, which have signed a privatization contract, from completely or partially assigning the partnership contract to other parties except after obtaining written approval from the executive authority.

It is also possible to subcontract with others to implement any of the works related to the public private participation (PPP) project, provided that there are no breaches of the obligations of the main contract holder, and is directly responsible to the executive authority.

The practices of the private sector establishments that signed the contract will not be classified as monopolistic if their activities are considered as a commitment under the contract, even if these actions have impacted or restricted competition.

The law stipulates that the period of the partnership contract between the public and private sectors does not exceed 30 years from the date of signature, whether for the original contract period or after the renewal.

It is also allowed to exceed this period based on the recommendation of the executive authority.

In the event that the period of the partnership between the two parties’ ends, and the project is re-offered and awarded to the same party, then the expired contract is not considered as an extension or renewal of the previous one.

It is noteworthy that in the past non-Saudis were not permitted to own real estates in Makkah and Madinah, and they were allowed only to rent for a maximum period of six years — a two-year lease, renewable no more than twice.

But in late 2019, the Premium Residency holders are allowed to own household property in Makkah and Madinah for a maximum lease period of 99 years.


© Copyright 2021 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.

More From Policy