Vacation Ownership Investment Confernce 4

Timeshare Law & Executive Charter for Tourism Real-Estate Units in Saudi Arabia 11-March-2008

www.sct.gov.sa www.sauditourism.com.sa www.mas.gov.sa

4th Annual

VACATION OWNERSHIP INVESTMENT CONFERNCE

Table of Content

Tourism Vision.

Timeshare background in KSA.

Main Articles of the Law.

The Main Aspects of the Law and the Executive Charter in the Kingdom of Saudi Arabia.

Tourism Vision

“As the cradle of Islam, we the Kingdom Of

Saudi Arabia aim to develop sustainable

tourism for the socio-cultural, environmental

and economic benefit of all, reflecting our

cherished Islamic values heritage and

traditional hospitality”

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Timeshare law background in KSA

The idea of Regulated the Timeshare in Saudi Arabia started in (06/11/1999).

SCT involved in drafting the law in (23/04/2002).

The Council of Ministers Approve Timeshare law in (30/05/2006).

Royal Decree was issued (13/09/2006), approving Timeshare, and assigned the SCT with issuing the Executive Charter.

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The Executive Charter background

The Executive Charter was developed by professional team of SCT employees. The Charter was based on best practices of USA, Spain, Malta, UK, EU, Oman, Tunisia, & Egypt

It was submitted in (12/03/2003) for final approval……

President of SCT Board of Director, (Approving the Executive Charter) in 23/05/2007…..

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Main Aspects of the Law & the Executive Charter in the Kingdom

Timeshare contracts not less than three years.

The purchaser have the right to cancel the contract without any reason within ten days or within three months ….

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Allowed a one-year notice for the current participants to correct their status according to the adopted Law.

Defined a maximum financial penalties up to SR. (500.000) = ($ 133.000).

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Licensing and Registration Requirements they are two types as follows:

1) real-estate licenses 2) marketing the units (inside or

outside the Kingdom.)

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Minimum requirements (40) units for Timeshare practice

The establishment should not be less than four-star hotel standards

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the vender must contract w/ financial accountant if the project is under construction….

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Management and operating co. to (Ensure the quality & services standards).

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The vendor should not sign a contract for a timeshare units in Makkah or Maddinah for a period exceeding 2 years…………..

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For real-estates located in Makkah and Maddinah the number of contracts signed with one purchaser must not exceed 30% of real-estate units……………….

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Guarantees for Timeshare Practicing License:The title deed must be marked in writing by the Notary that the property contains units mortgaged to the Timeshare practice and shall not be sold without a written approval from the SCT.

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The vendor must provide a bank warrantees for RS.(25) thousand / per unit for real-estates in KSA & abroad…..

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Issuing a Marketing License:A bank warrantee accounting for SR. (500.000) per real-estate to issue a marketing license……….

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The time share system must be legally authorized in the country where the property is located (for units outside KSA)……

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An independent committee is formed for Investigation & Violations it shows how to investigate and resolve the violations according to the law….

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Timeshare Effects on Promoting Real Estate Investment in the Kingdom

Excellent accommodation units in the kingdom are limited,(73%) of them are located in Makkah surrounding the holy areas.

In Madinah surrounding the Holy Prophet's Mosque it’s (8.6%) .

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In Riyadh 7.5%, whereas all other areas of the kingdom have only 10.6%.

This situation needs a new approach that would place tourism investment projects at the tourism components areas instead of being attracted to the current areas.

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Time Share idea succeeded and developed in a short period of time. Due to the increase of all elements of the industry and the price increase, the goal of the investor to sell the units of his project to meets the goal of the purchaser to have another home to spend his vacation .

So, the time share idea emerged and became a vital component of the tourism industry.

Conclusion

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Thank You….

www.sct.gov.sa www.sauditourism.com.sa www.mas.gov.sa

Vacation Ownership Investment Confernce 4

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