Saudi Arabia's Hayaa Al-Ittisalat wa Al-Fada' Al-Raqmi (Communications, Space and Technology Commission, "CST") has issued updated digital services rules that extend technology licensing obligations to a broader category of operators. The rules entered into force in early 2025. International companies that provide software, platform, or AI-enabled services to Saudi users now face registration, localisation, and algorithmic accountability requirements that did not previously apply to them.
Saudi Arabia's updated digital services regulation imposes technology licensing and data-localisation obligations on international companies that reach defined user or revenue thresholds in the Kingdom. Businesses that provide digital services – including cloud platforms, AI-driven applications, and marketplace software – must register with the CST and submit compliance documentation within the deadlines set by the applicable implementing rules. Failure to act before the prescribed deadline exposes operators to service suspension and financial penalties under Saudi technology legislation.
This alert identifies which business categories are affected, the applicable threshold criteria, the compliance deadline, and the five immediate steps international operators should take now.
What changed and when it takes effect
Saudi Arabia's technology legislation has been updated to bring digital services providers under a unified licensing regime. The revision covers three distinct layers of obligation.
First, technology licensing is now required for any entity that provides digital services – including software-as-a-service, platform intermediation, and AI-enabled products – to users located in Saudi Arabia. Operators that previously relied on offshore delivery without a local presence must now obtain a CST licence before continuing to serve Saudi users.
Second, algorithmic accountability obligations require that companies operating recommendation engines, automated decision systems, or AI-generated content tools document the logic of those systems and make that documentation available to regulators on request. This reflects the broader regional trend toward structured AI Act compliance-style requirements, adapted to the Saudi regulatory context.
Third, software liability rules have been clarified. Providers of software that causes financial or reputational harm to Saudi users may be held directly liable under the updated regime – a departure from the previously more limited approach to operator responsibility.
The obligations took effect progressively. The registration window for existing operators opened in January 2025. The hard compliance deadline – after which unregistered operators face enforcement action – falls at the end of Q2 2025. Companies that have not yet begun their registration process are already operating outside the permitted timeline.
Which companies are affected
The updated regime applies to any legal entity – regardless of where it is incorporated – that meets one or more of the following threshold criteria:
- The entity provides digital services accessible to users in Saudi Arabia, whether through a website, mobile application, or API connection.
- The entity's Saudi user base exceeds a defined threshold set by the CST implementing rules – broadly, operators with a significant volume of active Saudi accounts fall within scope.
- The entity processes personal data of Saudi residents, even if the processing occurs outside the Kingdom.
- The entity operates an AI-driven product that generates content, recommendations, or automated decisions directed at Saudi users.
Smaller operators with a minimal Saudi footprint may qualify for a simplified notification procedure rather than a full licence. However, that lighter-touch route still requires a formal submission to the CST. Operators that assume they fall below the threshold without verifying this in writing take a material risk.
Companies in e-commerce, fintech, cloud infrastructure, and enterprise software are among those most frequently encountering the new requirements. Foreign operators that white-label their platforms to Saudi resellers are not automatically excluded – the CST assesses the underlying service provider, not only the local reseller.
For a full assessment of how Saudi Arabia's AI and technology rules apply to your specific services. Contact us at the Ferraz &. Whitmore AI and technology law practice for Saudi Arabia or reach us directly at info@ferrazwhitmore.com.
Immediate actions for international operators
Companies that provide digital services to Saudi users should take the following steps without delay.
1. Conduct a threshold assessment. Determine whether your Saudi user volume, revenue attribution, or data-processing activities bring you within scope of the CST licensing regime. Document the analysis. A written threshold assessment provides a defensible record if the CST later queries your registration status.
2. Appoint a local compliance contact. The CST requires international operators to designate a responsible representative based in – or formally accessible in – Saudi Arabia. This individual or entity receives regulatory correspondence and is accountable for submission deadlines.
3. Prepare your algorithmic accountability documentation. If your product uses automated decision-making, recommendation logic, or AI-generated outputs, prepare a plain-language description of how the system operates. This documentation must be ready for regulatory inspection. It should address data inputs, decision criteria, and any human-oversight mechanisms in place.
4. Review your software liability exposure. Map the scenarios in which your software could cause financial or reputational harm to Saudi users. Update your terms of service and incident-response procedures to reflect the updated software liability rules. Consider whether your current indemnity and insurance arrangements adequately cover Saudi-jurisdiction claims.
5. File or update your technology licence application. Submit your CST registration or licence application before the Q2 2025 enforcement deadline. Late applications do not automatically result in a grace period – the CST has signalled that it will proceed with enforcement action against operators that remain unregistered after the deadline passes.
Companies managing intellectual property rights connected to their Saudi digital services should also review their registration position. Our analysis of intellectual property protection in Saudi Arabia covers the interaction between technology licensing and IP ownership under Saudi law.
Operators active across the Gulf region should note that similar requirements are evolving in parallel in the UAE. Our alert on digital services regulation in the UAE sets out the comparable compliance obligations for UAE-facing operations.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our AI and technology law practice covers digital services regulation, technology licensing, algorithmic accountability, and software liability matters across the Middle East, Asia-Pacific, and CIS regions. Engaging a lawyer in Saudi Arabia with cross-border technology experience is essential when the regulatory obligations span multiple legal systems. As an international law firm advising on Saudi Arabia technology matters, we work with international entrepreneurs, platform operators, and in-house legal teams navigating the CST's evolving digital services rules. The firm's practitioners have advised on technology licensing and AI-related compliance matters across both civil law and common law systems, drawing on our dual Portuguese and English legal tradition. To discuss how the updated Saudi digital services regime applies to your operations, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.
Published: March 31, 2026
Author: Anna Chen – Senior Associate, Asia-Pacific, Middle East & CIS
Anna Chen is a Senior Associate at Ferraz & Whitmore focusing on cross-border transactions, market entry, and dispute resolution across Asia-Pacific, Middle Eastern, and CIS jurisdictions. She supports international clients in navigating regulatory and commercial challenges in high-growth and emerging markets.