Red Sea project with overwater villas and cliff-carved rooms ready to rock in Saudi Arabia

It's been six years since Saudi Arabia announced plans for luxury ecotourism development The Red Sea on the kingdom’s western coast, and things are on track to open later this year.

From an eco-friendly resort carved into the mountains to futuristic overwater villas with views to rival the Maldives and new mangrove habitats, the kingdom's flagship coastal destination is rapidly taking shape.

One of the most important landmarks at the location is the new Red Sea International Airport, which will welcome its first leisure passengers – on domestic flights from Riyadh and Jeddah – this year.

Saudi Arabia's Red Sea International Airport will open to domestic travellers from Riyadh and Jeddah this year. Photo: Red Sea Global

“The Red Sea International Airport is progressing as planned and is on track to start receiving its first domestic flights later this year,” said Red Sea Global, the Public Investment Fund responsible for the project.

Designed by Foster + Partners and inspired by the colours of the surrounding desert landscape, the cantilever-roofed airport will imitate the experience of a private aircraft terminal with smaller spaces and personalised service. It will also be the region's first carbon-neutral airport.

Hotel rooms carved into rock and futuristic overwater pods

Desert Rock hotel will be made up of rooms carved into a cliff. Photo: Red Sea Global

Desert Rock, an ultra-luxury resort at the destination is halfway ready to welcome guests with 10 signature rooms carved into the cliff and interiors excavated from rock. Set in a hidden valley and surrounded by mountains, the resort blends into its location and offers uninterrupted views of the dramatic desert landscape. The resort's ground-level wadi villas are also nearly ready to receive guests.

On the futuristic Sheybarah Island – one of 92 isles that make up the coastal destination – 38 reflective overwater orb villas have been constructed.

A 45-minute boat ride from the mainland, the island has a 30-metre reef drop-off right by the beach, which will appeal to those who love to explore the ocean. A luxury spa and two speciality restaurants have also been constructed on the island.

Shura Island – the main hub of the Red Sea development – has 11 luxury resorts under construction including Jumeirah The Red Sea, The Red Sea Edition and Raffles Red Sea. Connected to the mainland by a 3.3km crossing – Saudi Arabia's longest internal bridge – the island is naturally shaped like a dolphin. It will also have a luxury marina and an 18-hole championship golf course. The golf clubhouse has already been built.

Developers are now working to enhance the surrounding coastline of the isle, including creating new beaches and mangrove habitats to support native fauna and flora.

Sustainability has been key to the project from the outset and progress is being made on this front. About 760,000 photovoltaic panels, which will power phase one of the development, have already been installed.

Travellers can book stays at Six Senses Southern Dunes

Six Senses Southern Dunes, The Red Sea will open this year. Photo: Foster + Partners

One of five solar farms in the destination is near Six Senses Southern Dunes, The Red Sea, and utilities at this luxury inland resort are already being entirely powered by the plant’s clean energy.

No confirmed opening date has been announced for the property, which will be the first to open in the destination, but bookings are being taken on the hotel's website for stays from December 1.

"We stand at the brink of an extraordinary moment as we prepare to unveil The Red Sea destination to the world," said John Pagano, group chief executive at Red Sea Global.

"In six years, we have made exceptional progress, creating exquisite resorts and best-in-class sustainable infrastructure in a remote location, demonstrating innovation in line with our regenerative approach and commitment to responsible development."

Phase one will open with the international airport and three hotels – The St Regis Red Sea Resort, Nujuma, a Ritz-Carlton Reserve and the aforementioned Six Senses.

When fully completed in 2030, the project will feature 50 resorts and 8,000 hotel rooms spread over 22 islands and six inland sites.

What's opening at the Red Sea Resort in Saudi Arabia in 2023 – in pictures

Ten tax points to be aware of in 2026

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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