300.1.5.3 Private Foundations
| No: 65681/67 | Date(g): 3/7/2019 | Date(h): 1/11/1440 | Status: In-Force |
Effective from Jan 01 2024 - Dec 31 2023
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This rule has been amended according to the circular No. (106878603), Dated 01/07/1446H, corresponding to 31/12/2024H. Please refer to the Arabic version of this rule to read the last updated version.
The bank may open accounts only in Saudi riyal for private Foundations. The requirements are as follows:
a. Requirements and controls for opening and managing main bank accounts:
- Requirements for opening main account:
| 1. | A copy of the registration certificate issued by the National Center for the Development of the Non-Profit Sector (NCNP) (the Center). |
| 2. | A copy of the foundation's bylaws, approved by the Center. |
| 3. | A copy of the decision to form the members of trustees board and verifying the identities of the members. |
| 4. | Copies of the IDs of persons authorized to operate and manage the bank account, and verification of their authorization by identifying them in the decision of the trustees board; such authorization shall allow for joint signature by two officials, and obtaining the approval of the Center when the authorized persons are from outside the board. |
| 5. | Approval of the bank’s senior management to open the account in cases where required -in accordance with the provisions of the Guidance of Anti Money Laundering and Combating Terrorist Financing-. |
- Controls for managing the main account:
| 1. | If disbursement is made by a check, the check shall be payable to the first beneficiary. |
| 2. | ATM and/or credit cards shall not be issued. |
| 3. | A prepaid card may be issued and funded based on the joint signature of the authorized persons on the account. |
| 4. | The foundation is not allowed to accept gifts, bequests, donations, endowments, grants, or Zakat from parties other than the founders specified in its bylaws, unless the approval of the Center is obtained. Additionally, private foundations are not allowed to carry out any cash dealings. |
| 5. | No transactions (e.g. remittance, collection of checks, etc.) to any beneficiaries outside Saudi Arabia shall be made, except for transferring money for the purpose of managing the foundation’s activities. For example, remittance for paying fees of consulting services or of participation in external symposiums, conferences and the like may be made after the bank obtains the official approval therefore from the Center (NCNP). |
| 6. | Remittances or checks coming from outside Saudi Arabia to the foundation’s account at the bank shall not be accepted, unless official approval therefore is obtained from the Center (NCNP). |
| 7. | Sub-accounts may be opened for investing the foundation’s funds in activities with financial returns that would help the foundation achieve its objectives, after obtaining approval from the Board of Trustees. |
b. Requirements and controls for opening and managing sub-accounts:
Sub-accounts may be opened for the various purposes of the foundation, as follows:
| 1. | Only the documents for opening and managing the main account shall be required. | ||
| 2. | These accounts shall be used only for the purpose for which they were opened. | ||
| 3. | In case there are branches of the foundation, one sub-account may be opened for each branch of the foundation, with the primary purpose being "Expenses-Branch Name", as follows: | ||
| a. | A copy of the approval of the Center (NCNP) for establishing the branch for which a sub-account is to be opened. | ||
| b. | A copy of the organizational structure decision for the branch and the names of the employees in its management, approved by the Center (NCNP), with Verifying their identities. | ||
| c. | Copies of the IDs of persons authorized to operate and manage the account, and verification of their authorization by identifying them in the decision of the Board of Trustees of the Foundation; such authorization shall allow for joint signature by two officials, and obtaining the approval of the Center when the authorized persons are from outside the board. | ||
| e. | Disbursements from the account shall be limited to the following: | ||
| - | bank checks withdrawn only by the first beneficiary. | ||
| - | Transfers made to the bank accounts of beneficiaries of material support inside Saudi Arabia only. The transfer forms shall be filled out by the persons authorized to sign for the expense sub-account. In addition, the transfers shall be monitored by the bank to ensure that they go in line with the nature of the branch’s activities. | ||
| - | Paying salaries of the foundation branch’s staff. | ||
| - | Paying utility bills and government invoices. | ||
| f. | ATM cards and/or credit cards shall not be issued for such accounts. | ||
| g. | A prepaid card may be issued and funded based on the joint signature of the authorized persons on the account. | ||
| h. | Approval of the bank’s senior management to open the account in cases where required -in accordance with the provisions of the Guidance of Anti Money Laundering and Combating Terrorist Financing-. | ||
- Civil Society Organizations established pursuant to royal orders:
This rule has been added pursuant to the circular No. (450651330000), dated 14/10/1445H, corresponding to 22/04/2024G. Please refer to the Arabic version of this rule to read the last updated version.
| Bank accounts may be opened for Civil Society Organizations established pursuant to royal orders as follows: | |
| 1. | A copy of the approval from His Majesty the King for the establishment of the civil society organization. |
| 2. | A copy of the articles of association of the organization. |
| 3. | A copy of the decision to form the members of trustees board and verifying the identities of the members. |
| 4. | Copies of the IDs of individuals authorized to manage and operate the bank account, with verification of their authorization by identifying them in a decision by the Board of Trustees. The signature should be joint for two officials, unless the organization's articles of association state otherwise. |
| 5. | Any transactions (e.g. remittance, collection of checks, etc.) outside Saudi Arabia may be made after verifying that these transactions align with the activity or main purpose for which the organization was established, as per its articles of association. |
| 6. | No transactions (e.g. remittance, collection of checks, etc.) outside Saudi Arabia shall be made for an organization if it is evident that the transaction does not align with its activity or main purpose under its articles of association, except for transferring money for the purpose of managing the organization’s activities. For example, remittance for paying fees of consulting services or of participation in external symposiums, conferences and the like may be made after obtaining approval from the National Center for Non-Profit Sector. |
• Family funds:
This rule has been amended according to the circular No. (43074912), dated 26/08/1443H, corresponding to 29/03/2022G.and the circular No. (106878603), Dated 01/07/1446H, corresponding to 31/12/2024H. Please refer to the Arabic version of this rule to read the last updated version.
| The bank may open accounts only in Saudi riyal for family funds. The requirements are as follows: | |
| 1. | A letter from the chairman of the trustee board of the family fund (or their authorized representative) to the bank in which the account is to be opened clearly indicating the purpose of opening the account. |
| 2. | A copy of the license issued by the Ministry of Human Resources and Social Development. |
| 3. | A copy of the fund's bylaws. |
| 4. | A copy of the trustee board formation decision and copies of board members’ IDs. |
| 5. | The bank account shall be managed by a joint signature of at least two persons: one shall be the chairman or the vice-chairman of the trustee board, and the other shall be the financial officer (principal signature). The trustee board may authorize two of its members or two senior Saudi managers of its executive management to manage the bank account, subject to the approval of the Minister or their authorized representative. |
| 6. | disbursement from the fund shall be in accordance with the methods and conditions stipulated in the fund's bylaws. |
| 7. | The family fund may accept funds, gifts, bequests, Zakat and subscriptions (if any) from its founders and family members only, provided that the bank obtains a pledge from the chairman of the fund’s trustee board to comply with this requirement. |
| 8. | The family fund is allowed to invest its money according to the provisions stipulated in the fund’s bylaws. |
| 9. | The family funds are not allowed to make any transfers or issue bank or personal checks to parties outside Saudi Arabia. |
| 10. | Approval of the director of the compliance department for opening the account. |
• Charitable activities of (civil and military) government bodies:
| The bank may open accounts only in Saudi riyal for charitable activities of (civil or military) government bodies. The following requirements and controls shall be met and applied: | |
| 1. | The bank shall obtain, through SAMA, the approval of the Ministry of Finance for opening a bank account or for maintaining the operation of an existing account, if the account’s funds (or part of them) are from public funds. |
| 2. | The bank shall receive a request from the ultimate authority in the government body carrying out the charitable activity or the person he/she authorizes to open the account, if the account’s funds are not from public funds. |
| 3. | The bank shall receive from the ultimate authority or his/her authorized representative a letter containing the names of the persons authorized to manage the bank account (by joint signature), provided that such authorized persons are Saudi employees of the same government body. |
| 4. | Such government body shall not raise funds or accept donations, aids or gifts from anyone except from its staff. |
| 5. | Deposits are accepted in cash, by checks, and through domestic direct transfer. In addition, deposits can be carried out using ATMs, Internet or credit cards. In all deposits, depositor’s information shall be obtained. |
| 6. | No ATM cards and/or remittance membership shall be issued/granted for the account. |
| 7. | The government body wishing to open such bank account shall undertake that the beneficiaries of such account are from its staff and their families. |
| 8. | Disbursement from the account shall be made by checks payable to the first beneficiary, or via wire transfer from the main account to the first beneficiary’s account. |
| 9. | Sub-accounts under the main account may be opened. Sub-accounts shall be used only for receiving deposits and making transfers to the main account. Checkbooks shall not be issued for such sub-accounts. Moreover, neither withdrawal nor transfer from these sub-accounts shall be allowed except to the main account. |
| 10. | Approval of the manager of compliance department for opening the account shall be sought. |