In these Regulatory Arrangements, the following words and phrases shall have the meanings assigned thereto, unless the context requires otherwise:

Regulatory Arrangements: Regulatory Arrangements for the Center for Special Economic Zones in the City of Riyadh.

Center: Center for Special Economic Zones in the City of Riyadh.

Economic Zones: Any special economic zone the boundaries of which are geographically defined within the city of Riyadh and which enjoys special treatment as well as competitive and legislative advantages different from those applied to economic activities within the Kingdom, without prejudice to international agreements and obligations in force in the Kingdom.

Board: Board of Directors of the Center.

Chairman: Chairman of the Board.

CEO: Chief Executive Officer of the Center.

Licensed Establishment: Any entity within the economic zone which is licensed by the Center.

Developers: Any entity in charge of developing, managing, operating, and maintaining the economic zones.

Owners Association Regulations: Regulations that govern joint ownership within the economic zones as well as the relationship between property owners, occupants, developers, and lessees and any licensed establishment.

1. A center in charge of regulating economic zones in the city of Riyadh shall be established in accordance with these Regulatory Arrangements under the name of the Center for Special Economic Zones in the City of Riyadh. The Center shall be headquartered in the city of Riyadh and may, as determined by the Board, establish branches or offices within the Kingdom and abroad.

2. The Center shall operate in accordance with international best practices.

3. The Center shall report to the Royal Commission for Riyadh City, and shall have a legal personality as well as financial and administrative independence. It shall have all the powers necessary to perform its duties under these Regulatory Arrangements, including any monitoring, supervisory, or executive roles.

Economic zones shall be established in accordance with the following:

1. The Center shall prepare a proposal to establish an economic zone, including a study of the requirements for its establishment, the sectors to be licensed, the geographical location and area of the zone as well as its annexes, the incentives and exemptions to be granted, and its impact on the Kingdom's economy.

2. The Center shall submit the proposal prepared in accordance with paragraph (1) of this Article to the Board of Directors of the Royal Commission for Riyadh City for consideration. If the Board of Directors of the Royal Commission for Riyadh City endorses the proposal, the Center shall submit such proposal to the Council of Ministers for consideration. A copy of the proposal shall be provided to the Economic Cities and Special Zones Authority.

3. The Council of Ministers shall, upon its approval, issue a resolution establishing the economic zone. The resolution shall specify the following:

• a) The geographical location, area, and annexes of the economic zone.

• b) The activities and sectors of the establishments to be licensed by the Center in the economic zone.

• c) The incentives and tax exemptions that may be granted to licensed establishments in the economic zone in accordance with these Regulatory Arrangements.

4. Economic zones and the entities located therein shall be subject to the laws and regulations applicable in the Kingdom, unless an express provision in the Council of Ministers resolution referred to in paragraph (3) of this Article provides otherwise.

The Center aims to contribute to enhancing the Kingdom's economic position and improving its competitiveness by participating in the establishment of special economic zones that compete with leading special economic zones around the world through the following:

1. Adopting policies, rules, instructions, and procedures that regulate the economic activities and services within the economic zones in accordance with international best practices.

2. Providing the appropriate environment to attract domestic and international companies.

3. Enhancing the business and services related to the activities undertaken in the economic zones.

The Center shall take all the measures necessary to achieve its objectives; it may in particular undertake the following:

1. Devising strategies, policies, plans, and general and detailed programs for the development of economic zones.

2. Preparing proposals for the establishment of economic zones and submitting such proposals in accordance with Article 3 of these Regulatory Arrangements.

3. Issuing regulations for economic activities within the economic zones, in accordance with international best practices and in a manner that meets the needs of the economic zones. Such regulations shall include any exceptions to laws applicable in the Kingdom which are related to such activities if such exceptions are provided for in the Council of Ministers resolution, and shall include the administrative penalties for violating the provisions thereof.

4. Exercising any monitoring, supervisory, or executive role on behalf of the government agencies concerned with the economic activities within the economic zones in agreement with such agencies.

5. Establishing comprehensive service centers in the economic zones to be supervised and managed by the Center. The Center, ministries, and other government agencies shall be represented in such service centers. The service centers shall provide various services to beneficiaries and investors in the economic zones, as specified by the Board. Ministries and agencies shall grant their representatives the powers necessary to ensure the prompt provision of services as specified by the Board.

6. Determining the criteria and conditions for investment, encouraging and facilitating such investment, attracting companies, and regulating economic activities in economic zones.

7. Setting controls and rules for the ownership and usufruct of real estate within the economic zones, recording dispositions on such real estate, and issuing titles of ownership and documents of related usufruct rights, and submitting the same for completion of legal procedures.

8. Approving the master plan, building code, and urban code for the economic zones.

9. Issuing the Owners Association Regulations.

10. Establishing centers or entities that are affiliated with the Center to carry out some of its functions and duties, organizing their financial and administrative affairs, and determining the means and mechanisms for carrying out such functions and duties, provided that the budget of such centers and entities is within the budget of the Center.

11. Monitoring entities with regard to the economic activities carried out thereby within the economic zones to ensure compliance with the provisions of these Regulatory Arrangements and the decisions issued pursuant thereto as well as any laws and regulations in force in the economic zones.

12. Concluding service-level agreements with developers in the economic zones and determining the standards related to such agreements as the Center deems appropriate.

13. Seeking, as it deems necessary, the assistance of specialized research and planning centers, consulting firms, and any distinguished personnel, experts, and consultants.

14. Cooperating and exchanging expertise with regional and international bodies and organizations, within the Kingdom or abroad, and concluding agreements and memoranda of understanding related to its activities with relevant authorities in countries and with international organizations, in accordance with relevant legal procedures.

15. Representing the Kingdom in regional and international bodies and organizations related to the Center's functions and duties in coordination with the Ministry of Foreign Affairs.

16. Promoting the economic zones to attract investments by holding or participating in local and international events and exhibitions for activities relating to the functions of the Center.

17. Requesting any information, statement, report, or document from ministries and other government agencies as well as from developers and establishments within the economic zones, as required by the Center's works, services, and projects; taking necessary action in line with the Center's objectives and strategies; and submitting certain matters for determination, if required.

18. Concluding memoranda of understanding and agreements with ministries and other government agencies to coordinate regarding the performance of the works and services necessary to organize economic activities within the economic zones.

19. Establishing centers responsible for security, firefighting, rescue, emergency response, and healthcare services; appointing an entity, or more, as the Center deems appropriate, to carry out such responsibilities; or assigning the developer to carry out such responsibilities at his expense. The Center or its designee shall coordinate with the relevant agencies relating to such services in the economic zones.

20. Performing any other task the Board deems necessary to achieve the objectives for which the Center was established in a manner not inconsistent with these Regulatory Arrangements.

21. Reviewing license applications and issuing licenses for entities or companies located in the economic zone. The Center may assign such function to relevant government agencies as it deems appropriate.

22. Authorizing certain government agencies or the private sector to perform certain tasks, other than the tasks provided for in paragraph (21) of this Article, upon the approval of the Board.

1. Ministries and other government agencies performing works or services related to economic activities within the economic zones shall implement the decisions and instructions issued by the Center in implementation of its functions as stipulated in these Regulatory Arrangements, and shall comply with the memoranda of understanding and agreements referred to in Article 5 of these Regulatory Arrangements.

2. The functions and duties of the Center stipulated in these Regulatory Arrangements shall not prejudice the functions and duties exercised by government agencies that are not related to economic activities within the economic zones.

1. The administrative regulations of the Center shall govern its administrative affairs, including the affairs of its employees.

2. The financial regulations of the Center shall govern its financial affairs, including those relating to the mechanisms for carrying out its works and securing procurements.

3. The technical regulations of the Center shall govern the technical matters relating to the Center's activities.

The Center shall have a board of directors the chairman and members of which shall be appointed pursuant to an order by the Prime Minister upon the nomination of the Chairman of the Board of Directors of the Royal Commission for Riyadh City, and the Board shall, upon formation, name a secretary from among its members or others.

The Board is the highest authority of the Center. It shall be in charge of managing the Center’s affairs and the conduct of its business, and shall take the necessary decisions to achieve its objectives and carry out its functions and duties in the manner it deems appropriate. The Board may, pursuant to the functions stipulated in Article 5 and these Regulatory Arrangements, undertake the following:

1. Approving the Center’s strategies, policies, plans, and general and detailed programs for the development of economic zones.

2. Approving the submission of proposals for the establishment of economic zones.

3. Adopting the regulations governing economic activities within the economic zones and amendments thereto in accordance with international best practices and according to the needs of the economic zones.

4. Approving the conclusion of agreements, contracts, and memoranda of understanding to which the Center is a party.

5. Approving service-level agreements with developers in the economic zones and the standards related to such agreements as the Center deems appropriate.

6. Approving the controls and rules for the ownership and usufruct of real estate within the economic zones, recording dispositions on such real estate, and issuing titles of ownership and documents of related usufruct rights.

7. Approving building regulations as well as land uses, plans, and divisions.

8. Approving the Owners Association Regulations.

9. Approving the controls and requirements for issuing, withdrawing, and canceling licenses and permits, and wholly or partially suspending them on a permanent or temporary basis, for activities relating to the functions of the Center in the economic zones pursuant to the resolution issued by the Council of Ministers in accordance with Article 3 of these Regulatory Arrangements.

10. Adopting the criteria and conditions for investment in the economic zones to attract companies.

11. Adopting the controls and rules necessary for work permits, residence permits, and work visas within the economic zones.

12. Approving the establishment of centers or entities that are affiliated with the Center, determining their duties, and assigning thereto any of the functions of the Center which are provided for in these Regulatory Arrangements and the regulations applied by the Center.

13. Adopting the organizational structure of the Center.

14. Adopting the work regulations of the Board and its committees, and adopting the financial, administrative, and technical regulations of the Center, provided that adoption of the administrative regulations is made in agreement with the Ministry of Human Resources and Social Development, and that adoption of the financial regulations and the provisions with financial impact in the administrative regulations is made in agreement with the Ministry of Finance.

15. Approving the Center's draft budget, final accounts, and annual report as well as the auditor's report, and submitting the same in accordance with legal procedures.

16. Appointing an external auditor and a comptroller.

17. Approving the fees for the licenses and permits issued by the Center and the services provided thereby in the economic zones, in agreement with the Ministry of Finance and the Non-Oil Revenue Development Center.

18. Approving the assignment of any of the Center's functions without prejudice to these Regulatory Arrangements.

The Board may, in exercising the above-mentioned powers, form standing or ad hoc committees from among its members or from local and international experts, and assign certain tasks thereto. The formation decision of each committee shall name its chairman and members and specify its tasks. The committees may seek the assistance of any person to perform the tasks entrusted thereto.

The Board may, without prejudice to its primary duties and responsibilities, delegate some of its powers to its Chairman, any Board member, the CEO, or any of the Center's employees.

1. Board meetings shall be held at the headquarters of the Center, and may, if necessary, be held at a different location pursuant to a decision by the Chairman.

2. The Board shall convene at least once every three months, and whenever the need arises as determined by the Chairman. The Chairman may designate any Board member to chair the meetings in his absence. The call for a meeting shall be made by the Chairman or his designee. Board meetings shall be deemed valid if attended by the majority of Board members, including the Chairman or his designee. Board decisions shall be passed by the majority vote of attending members; in case of a tie, the meeting chairman shall have the casting vote.

3. The Board may issue its decisions by circulation.

4. The Board shall issue the regulations governing its work.