المملكة: Tight governance of the non-profit sector.. Beginning of implementation of the regulations for civil society associations

The executive regulations of the The National Center for the Development of the Non-Profit Sector Precise requirements for the establishment of civil society associations, requiring that at least ten Saudi persons apply for establishment, with full legal capacity and their records being free of any final judgments for crimes against honor or trust.

The regulations framed the administrative structure of the associations’ boards of directors, such that the number of members shall not be less than five and not more than thirteen members, with the duration of one electoral cycle ranging between one year and a maximum of four years.

Mechanism for establishing NGOs

The updated legislation clarified the mechanism for establishing NGOs by one or more people, whether of a natural or legal capacity, provided that they do not aim for profit, and that they depend on the funds, endowments or donations allocated by the founders.

The regulations obligated the boards of trustees in NGOs to have no less than three members appointed by the founders, with the necessity of providing the center with the final accounts and financial reports audited by An external auditor within four months of the end of the fiscal year.

In the path of financial transparency, the instructions required associations and institutions to deal with zakat funds in completely independent bank accounts and records, with the requirement that all cash funds be deposited in the entity’s name with local banks with joint signatures from management officials.

Nivility Institutions Council

The new regulations approved the establishment of the “Nivility Institutions Council” and the “Nivilities Associations Council” in the capital, Riyadh, as non-profit entities responsible for representing the sector. Before governmental and judicial authorities, coordinating efforts and developing rehabilitation programs, while allowing the establishment of regional and specialized sub-councils.

The regulations categorically prohibited all private entities from contracting or agreeing with countries and international organizations, or participating in any external activity, without obtaining prior approval from the center and the competent authorities.

The legislation permitted associations and institutions to receive aid from outside the Kingdom, provided that they fully adhere to the relevant applicable regulatory provisions.

And it was granted Regulatory Articles The Center and the supervisory authorities have broad powers that include field visits to entity headquarters, examining documents and records, and attending meetings of the General Assembly and boards of directors to verify compliance.

The regulations gradually began imposing penalties on violators, starting with a warning and granting a corrective deadline, all the way to dismissing the boards of directors or trustees, temporarily suspending activity, or merging the entity, and even issuing a final dissolution decision in the event of continued violations.

The final legislation gave all currently existing civil society associations and institutions a full year from the date of publication of the regulation to align their administrative and financial conditions with the new provisions, in order to avoid applying statutory penalties against them.

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