Saudi Arabia’s Evolving Regulatory Framework for the Technology and Data Economy

Saudi Arabia’s commitment to digital transformation is a cornerstone of its Vision 2030 initiative, which aims to diversify the economy and position the Kingdom as a global technology hub. With 66 out of the 99 Vision 2030 goals linked to data and Artificial Intelligence (AI), the country is witnessing a rapid evolution of its regulatory framework to facilitate technological innovation and investment. Businesses operating in Saudi Arabia’s technology and data sectors must navigate an increasingly complex legal landscape to ensure compliance and seize emerging opportunities. Below, we explore recent developments shaping the regulation of Saudi Arabia’s technology and data economy.

1. Implementation of the Personal Data Protection Law (PDPL)

The Saudi Personal Data Protection Law (PDPL) became enforceable in September 2024 under the supervision of the Saudi Data and AI Authority (SDAIA). Businesses operating within and outside Saudi Arabia that process the personal data of Saudi residents must comply with PDPL mandates. Non-compliance could result in financial penalties, making it essential for companies to align their data management strategies with the law’s requirements.

2. Amendments to the Data Transfer Regulations

The Data Transfer Regulations were amended in September 2024 to streamline cross-border data transfer requirements. Inspired by the EU’s GDPR framework, organizations must now implement safeguards, such as Standard Contractual Clauses (SCCs), Binding Common Rules (BCRs), or accreditation certificates, when transferring personal data to countries lacking SDAIA-approved data protection adequacy.

3. Introduction of Standard Contractual Clauses and Binding Common Rules

To facilitate compliance with cross-border data transfers, SDAIA has introduced pre-approved SCCs and guidelines for BCR implementation. These legally binding agreements ensure that both data exporters and importers adhere to Saudi Arabia’s privacy and security regulations.

4. Generative AI guidelines for government and public use

Recognizing the rapid adoption of AI, SDAIA has issued guidelines governing the ethical and responsible use of generative AI for government institutions and the public. These guidelines emphasize best practices, risk mitigation strategies, and key principles to foster responsible AI deployment.

5. Mandatory Data Protection Officer (DPO) Rules

SDAIA has outlined new criteria for appointing Data Protection Officers (DPOs), mandating businesses that process sensitive personal data or engage in large-scale data activities to appoint a qualified DPO to oversee compliance and data protection practices.

6. National Registration of Controllers Requirement

Entities processing high-risk or sensitive personal data are now required to register with SDAIA. This mandatory registration applies to public entities, businesses processing sensitive data, and organizations whose core activities involve personal data processing.

7. Comprehensive data protection guidelines

SDAIA has released multiple guidelines covering various aspects of data protection, including privacy policy frameworks, data minimization principles, data anonymization, destruction guidelines, and record-keeping best practices. Organizations must align their operations with these frameworks to avoid regulatory scrutiny.

8. Cybersecurity regulations for Managed Security Operations Centers (MSOCs)

The National Cybersecurity Authority (NCA) has introduced a new licensing framework for MSOC service providers, which mandates tiered licensing requirements and the certification of cybersecurity analysts. These regulations enhance cybersecurity monitoring and threat response capabilities across the Kingdom’s digital ecosystem.

9. Amendments to Essential Cybersecurity Controls (ECCs)

The NCA has updated the Essential Cybersecurity Controls (ECCs) to introduce new Saudization requirements, clarify control mechanisms, and redefine data localization rules. These amendments strengthen the country’s cybersecurity resilience while ensuring regulatory alignment with broader national digital security strategies.

10. Digital content platform regulations

The Communications, Space & Technology Commission (CST) has introduced a regulatory framework requiring digital content platforms—such as video streaming, gaming, and advertising platforms—to obtain licenses if they surpass a subscriber threshold. This regulation applies extraterritorially and aims to ensure compliance among international digital service providers catering to Saudi users.

Implications for businesses and investors

The evolving regulatory environment presents both challenges and opportunities for businesses operating in Saudi Arabia’s technology and data sectors. Key takeaways include:

• Compliance readiness: Organizations must proactively align with new data protection, cybersecurity, and AI governance regulations to avoid legal risks and penalties.
• Cross-border data strategies: Businesses handling Saudi citizens’ data must implement appropriate safeguards for international transfers, ensuring adherence to newly introduced SCCs and BCRs.
• Investment in cybersecurity and AI ethics: With growing regulatory scrutiny, companies must invest in cybersecurity infrastructure, AI governance frameworks, and data protection capabilities.
• Market entry considerations: Digital content providers, AI service providers, and technology firms must assess licensing requirements before entering the Saudi market.

Conclusion

Saudi Arabia’s technology and data economy is undergoing a significant transformation, fueled by an ambitious regulatory agenda aimed at fostering innovation, investment, and digital security. Businesses that stay ahead of regulatory changes and implement compliance-driven strategies will be well-positioned to thrive in the Kingdom’s evolving digital landscape. As regulatory developments continue, organizations must remain agile and engage with legal and compliance experts to navigate the complexities of Saudi Arabia’s digital economy effectively.

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