Tourists visiting the ancient archaeological site of Hegra in AlUla, Saudi Arabia. Bloomberg
Tourists visiting the ancient archaeological site of Hegra in AlUla, Saudi Arabia. Bloomberg
Tourists visiting the ancient archaeological site of Hegra in AlUla, Saudi Arabia. Bloomberg
Tourists visiting the ancient archaeological site of Hegra in AlUla, Saudi Arabia. Bloomberg

PIF-owned AlUla Development Company launched to turn tourism site into global destination


Ian Oxborrow
  • English
  • Arabic

AlUla Development Company is launching operations with the aim of turning the city into a global tourism destination in Saudi Arabia.

The company, which is wholly owned by the Public Investment Fund (PIF), plans to deliver hospitality, residential, retail and infrastructure projects as part of the tourism push.

Planned developments include more than 7,500 hotel keys, 5,000 residential units, a staff village comprising more than 1,000 units, as well as infrastructure support, according to a statement on Monday.

"AlUla Development Company will create jobs and opportunities for local businesses and communities whilst preserving one of the world’s largest and oldest cultural sites," the statement said.

"The company’s mandate is in line with PIF’s strategy on unlocking the capabilities of promising sectors in Saudi Arabia that can help drive the diversification of the economy, increase private sector engagement and improve quality of life to support Saudi Arabia’s position regionally and internationally as a leading tourism and cultural destination in line with Vision 2030."

The company will work in collaboration with the Royal Commission of AlUla (RCU) and private sector entities.

AlUla is expected to contribute about 120 billion Saudi riyals ($32 billion) to Saudi Arabia’s economy.

Saudi megaprojects 2023: Neom, AlUla and more

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    The Line is one of 10 districts in Saudi Arabia's $500 billion Neom megacity. Photo: Neom
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    Sindalah Island is set to be the first destination open to the public within the Neom mega project. Photo: Neom
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    Trojena, a mountain tourism destination, will be the first major outdoor skiing site in the GCC. Photo: Neom
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    Oxagon, part of the Neom mega project, is a futuristic new industrial city in the sea. Photo: Neom
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    AlUla is a budding tourist magnet in the north-western Madinah region. AFP
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    When it opens in 2023, Nujuma, a Ritz-Carlton Reserve, will form part of The Red Sea project. Photo: Marriott International
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    Salwa Palace is the largest standing structure in the historic city of Diriyah. Photo: Diriyah Gate Development Authority
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    A screen grab of aerial footage of the King Salman Park in Riyadh. The project is set to become the world’s biggest urban park.

The RCU forecasts that the population of the area will triple to 130,000 by 2035, generating about 38,000 new jobs.

The RCU was established in 2017 to preserve and develop AlUla, in line with the heritage and preservation priorities of Saudi Arabia’s Vision 2030 programme.

AlUla is among a number of projects in Saudi Arabia which form part of its diversification efforts.

Others include the $500 billion Neom smart city in the north-west of the kingdom, the Red Sea Project, which includes an archipelago of 92 islands, 50 dormant volcanoes, mountain ranges and sand dunes, and Ad Diriyah, the 300-year-old city considered to be the birthplace and capital of the first Saudi state.

Visitors to Saudi Arabia spent 27 billion riyals during the first six months of last year, making tourism one of the kingdom's most promising sectors.

The Ministry of Investment said 3.6 million foreign tourists visited the kingdom during the second quarter of the year, greatly contributing to a plan to diversify sources of income as part of Vision 2030.

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1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.

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Updated: January 30, 2023, 1:44 PM