Details of the executive regulations for the system of associations and non-profit organizations
In a strategic move aimed at restructuring and regulating the third sector in Saudi Arabia, the National Center for Non-Profit Sector Development the new executive regulations for the Law of Associations and Foundations. This step directly reflects the objectives of the Kingdom's Vision 2030 , which aspires to increase the non-profit sector's contribution to the GDP to 5% and reach one million volunteers, thus necessitating a flexible and robust legislative framework that ensures sustainability and transparency.
Context of legislative development and its importance
The adoption of these regulations marks a pivotal turning point in the history of Saudi Arabia's non-profit sector, transforming it from individual initiatives to organized, institutional work. The regulations are significant because they address previous challenges related to establishment, funding, and overlapping jurisdictions, thereby enhancing the confidence of both donors and beneficiaries and attracting qualified professionals to this vital sector.
Key features of the bylaws: Establishment and purposes
The new regulations streamline the establishment process while establishing controls to ensure seriousness, requiring a minimum of ten Saudi founders with full legal capacity and good character. The regulations also broaden the scope of associations' objectives to encompass diverse fields beyond traditional charitable work, covering environmental, health, technological, consumer protection, and tourism aspects, thus opening the door to developing comprehensive community solutions.
Strict governance and financial oversight
To ensure the highest standards of integrity, the regulations emphasized financial aspects, requiring associations to open separate accounts for Zakat funds and maintain dedicated records to guarantee their disbursement to legitimate beneficiaries. They also mandated the appointment of a licensed external auditor to review financial statements and held boards of directors fully responsible for the association's funds, requiring them to retain financial records for a minimum of ten years.
Prohibition of conflicts of interest and international relations
In a regulatory precedent aimed at strengthening oversight independence, the regulations explicitly prohibit employees of the National Center for Non-Profit Sector Development from working in any capacity with associations or civil society organizations. Regarding foreign relations, the regulations establish precise controls for dealing with international entities, requiring official approvals before entering into any agreements or receiving foreign funding, in order to protect national sovereignty and ensure the integrity of financial transactions.
General Assembly: Supreme Authority
The bylaws solidified the concept of internal democracy by establishing the general assembly as the supreme authority with the final say in all association matters, and its decisions are binding on all. They also regulated election and voting mechanisms and provided flexible membership options (open or closed), thus enhancing community participation in decision-making within non-profit organizations.
