• The following words and phrases - wherever they appear in this governance - mean the meanings shown in front of each, unless the context requires otherwise:

  • Governance: Governance of the study of requests and subjects referred to the Ministry of Finance, in accordance with what was stipulated by Council of Ministers decision No. (804) dated 16/9/1445H.

  • Rules: Rules for dealing with requests from public entities to establish companies or participate in their establishment or to establish any entity whose purpose is investment or is profit-oriented, issued by Council of Ministers decision No. (804) dated 16/9/1445H.

  • Company: The company established by a public entity or in which it participates in its establishment or owns shares or stocks.

  • Entity: Any legal personality established by a public entity or in which it participates in its establishment or owns shares, authorized by law to acquire rights and bear legal responsibilities.

  • Ministry: Ministry of Finance.

  • Public Entity: The public apparatus, whatever its status or name (Ministry, Authority, Public Institution, Center, Program, National Committee, or others).

  • Head of the Entity: The first official in the public entity, or the Chairman of the Board if it has a Board of Directors.

  • Supporting Entities: The entity that contributes to supporting the study of the request according to its jurisdiction, including: (Ministry of Commerce, Ministry of Economy and Planning, Ministry of Investment, Ministry of Foreign Affairs, Capital Market Authority, Expenditure and Projects Efficiency Authority, General Authority for Competition), and entities concerned with regulating certain sectors.

This document outlines the governance of the study of claims and subjects referred to the Ministry in accordance with clauses (First) and (Sixth) of the rules.

• 1- Improve the quality of supervision over requests for the establishment or ownership of public entities in companies or entities.

• 2- Define the regulations and procedures governing requests for the establishment or ownership of public entities in companies or entities.

• 3- Enhance transparency and establish governance rules.

• The establishment of the public entity for entities and companies or its ownership or participation in their establishment aims to achieve the following:

  • A- Providing goods and services that the private sector cannot provide under normal competitive conditions.

  • B- Providing goods and services that require stability in their provision to all segments of society, which have unique characteristics.

  • C- Maintaining the confidentiality of data and transactions in sensitive sectors related to state security.

    
    

• 1- The provisions of governance apply to the requests and subjects of public entities referred to the Ministry in accordance with clauses (First) and (Sixth) of the rules.

• 2- The provisions of governance do not apply to entities that have been exempted based on Council of Ministers Decision No. (804) dated 1445/9/16H, mentioned in clause (Second) of the rules.

• The claims and subjects referred to the Ministry according to clauses (First) and (Sixth) of the rules regarding any of the following:

  • A- Transfer of ownership of the existing company.

  • B- Establishment of a company or participation in its establishment.

  • C- Acquisition of an existing company or purchase of shares or stocks in it.

  • D- Establishment of an entity with purposes of investment or any profit-oriented activity.

  • E- Amendment of the organizational status of any entity - affiliated with any public authority - to enable it to invest or be profit-oriented.

The submission of the public authority's request to the ministry regarding any of the requests and subjects mentioned in paragraphs (B), (C), (D), and (E) of Article (Six) of the governance shall be in writing, provided that the request includes the documents and information referred to in the governance.

• 1- The public entity submitting the claim must adhere to the following:

  • A- Attach the response of the Public Investment Fund regarding the unsuitability of the claim according to paragraph (3) of section (First) of the rules, concerning the claims and subjects mentioned in paragraphs (B), (C), (D), and (E) of Article (Sixth) of the governance.

  • B- Ensure that its claim meets all the requirements stated in Article (Ninth) of the governance.

  • C- Ensure the accuracy and currency of the information and data accompanying the claim, provided that no more than (12) months have passed since the date of submitting the claim.

  • D- Provide any information or clarifications to the Ministry in the required format and within the timeframe specified.

• 2- If the public entity does not meet the requirements stated in paragraph (1) of this article, the Ministry may - after notifying that entity of the requirements and granting it sufficient time to meet them - close the claim and notify the submitter of this.

• The public entity submitting the claim may submit a new claim in accordance with the procedures stipulated in the governance.
  

• 1- The public entity submitting the request must attach electronic copies of the following documents and data to its request:

  • A- Clarification of previous requests related to the application.

  • B- The response of the Public Investment Fund regarding the unsuitability of the request.

  • C- The connection to the sector's targets, the public entity's strategy, and national strategies.

  • D- Identification of ownership objectives and analysis of the expected impact.

  • E- Data of participating owners or individuals - whether natural or legal persons - whom the public entity wishes to involve, their nationalities, financial suitability, and adequacy.

  • F- A detailed study that includes the following:

    • 1- The activity of the company or entity.

    • 2- The duration of the company or entity.

    • 3- The business model and governance.

    • 4- Performance measurement indicators.

    • 5- Information about the sector.

    • 6- Capital, methods of financing, and statement of share distribution.

    • 7- Analysis of the current market situation and the structure of supply and demand.

    • 8- The financial model.

    • 9- The financial sustainability plan.

    • 10- Analysis of competition between the public and private sectors and a statement of the impact of the company or entity on the private sector, or any of the companies owned by the Public Investment Fund.

    • 11- The timeline for implementation.

• 2- If the request is related to what is mentioned in paragraphs (A), (C), or (E) of Article (Six) of governance, it should be accompanied - in addition to what is mentioned in paragraph (1) of this article - by the following:

  • A- The articles of incorporation or the basic system, or any other statutory document.

  • B- Relevant licenses.

  • C- The audited annual financial statements for the last (three) years, or from the date of establishment, whichever is less.

  • D- The annual report of the board of directors for the last year.

• 3- If the request is related to what is mentioned in paragraphs (B) and (D) of Article (Six) of governance, it should be accompanied - in addition to what is mentioned in paragraph (1) of this article - by the following:

  • A- Statutory requirements for establishment.

  • B- Objectives and justifications for establishing the company or entity.

  • C- The legal form of the company or entity.

• After verifying that the public entity submitting the claim meets the requirements stated in Article (Eight) of the governance, the Ministry studies the claim, in participation with the entity that submitted it, and decides on it within (90) days. The Ministry bases its study on the following criteria:

  • A- Need: Identifying the gap that requires the establishment or ownership of the company or entity by the public entity, and the extent of contribution to meeting the sector's needs.

  • B- Relevance: The extent to which the company's or entity's activity is related to achieving the sector's targets and the public entity's strategy and national strategies.

  • C- Efficiency: Through the optimal utilization of available resources to achieve the targets.

  • D- Governance: Through evaluating the governance model.

  • E- Impact: By measuring the expected impact on the public and private sectors.

  • F- Sustainability: Through evaluating financial and operational sustainability.