What the Higher Education Fund Regulation Means for Universities and Investors
17 October 2026
On 5 Jumada al-Awwal 1448 AH, corresponding to 16 October 2026, the Umm Al-Qura Gazette published the Higher Education Fund Regulation in its Regulations and Laws section. The Regulation grants the Fund public legal personality and financial and administrative independence, and authorizes it to invest the funds of universities and colleges, operate their facilities and establish companies. Article 16 provides that the Regulation takes effect from the date of its publication in the Official Gazette.
In Brief
The Fund is now an independent entity organizationally linked to the Minister of Education, with its headquarters in Riyadh. The Fund may manage the investments of higher education institutions and operate their facilities by agreement with them. It may also establish companies, enter into partnerships and accept trusteeship over their endowments. Its employees are subject to the Labor Law and the Social Insurance Law as provided in Article 15.
What Is the Higher Education Fund and What Is Its Legal Nature?
Article 2 provides that the Fund has public legal personality and financial and administrative independence and is organizationally linked to the Minister of Education. The same article designates Riyadh as the Fund’s headquarters and permits it to establish branches or offices within the Kingdom as needed.
Article 1 defines higher education institutions as universities or colleges in the Kingdom that hold statutory authority to provide postsecondary education. This definition matters because it identifies the entities for whose benefit the Fund works and whose funds and assets it manages.
Why Was the Fund Established?
Article 3 states that the Fund aims to diversify the funding sources of higher education institutions, develop their funding mechanisms and grow their own resources. It also aims to invest their funds and assets, manage their investments, and support and develop their projects in accordance with the Regulation.
The same article links these objectives to achieving the financial sustainability of these institutions and increasing their capacity to perform their role in line with development requirements. This indicates that the Fund’s role is primarily financial and investment focused rather than academic or educational.
What Powers Does the Fund Have to Invest and Establish Companies?
Article 4 grants the Fund the power to make investments of all kinds, including investment in securities. This includes owning assets and real estate and disposing of them by sale or mortgage in accordance with the applicable rules.
Paragraph 8 of the same article permits the Fund to establish companies and special purpose entities within the Kingdom, either alone or jointly with others. It also permits the Fund to participate in existing companies and to own shares or stakes in accordance with the applicable statutory procedures.
Its powers extend to charging fees for its services and work as determined by the Board under paragraph 7 of Article 4. Under paragraph 13 of the same article, it may also provide advisory, financial, economic and technical services and training within its areas of competence.
How Does the Fund Deal with Universities, Colleges and Their Funds?
Paragraphs 3 and 4 of Article 4 require that the management of the investments, assets and funds of higher education institutions be carried out by agreement with them. The same rule applies to operating the facilities of these institutions, whether the Fund does so alone or jointly with others.
Article 11 allocates to each higher education institution a dedicated account within the Fund into which the revenues from investing its assets are deposited. Under the same provision, this account is used to cover the requirements and needs of that institution.
Paragraph 3 of Article 6 assigns to the Board the acceptance of trusteeship over endowments dedicated to higher education institutions where such trusteeship is entrusted to it. This is done in accordance with the relevant applicable procedures as set out in that paragraph.
Who Manages the Fund and How Are Its Decisions Made?
Article 5 provides for a Board of Directors chaired by the Minister of Education. The Board includes the Secretary General of the Council of Universities’ Affairs and representatives of the Ministry of Education, the Ministry of Finance and the Technical and Vocational Training Corporation. It also includes three representatives of higher education institutions, two members with relevant expertise and specialization, and the Chief Executive Officer. The institutional representatives and the experts are appointed by order of the Prime Minister for a term of three years, renewable once.
Under Article 7, a Board meeting is valid only if a majority of members attend, including the Chairman or the Vice Chairman. Decisions are made by a majority vote of those present, and in the event of a tie the side with which the chair of the meeting voted prevails. A member may not abstain from voting or authorize another member to vote on his behalf in his absence.
The same article permits meetings to be held and decisions to be voted on remotely using technology. It also permits decisions to be issued by circulation, provided that all members vote on them and that they are then presented to the Board at its next meeting.
Article 8 explains that the Chief Executive Officer is appointed and dismissed by Board decision and is responsible for managing the Fund’s affairs. His duties include signing agreements and contracts after Board approval and representing the Fund before the judiciary and government bodies.
What Are the Fund’s Financial Resources and How Are They Overseen?
Article 10 lists the Fund’s resources. These include amounts that higher education institutions realize from rationalizing and regulating student stipends. They also include fees for its services, returns on its investments, returns from operating the facilities and assets of the institutions, and any grants, donations, bequests and endowment revenues that the Board accepts.
Article 11 requires the Fund to open an account with the Saudi Central Bank in which its funds are deposited. It also permits the Fund to open other accounts with any bank licensed to operate in the Kingdom and to make payments from them in accordance with its financial rules.
On oversight, Article 13 provides that the Board appoints one or more external auditors licensed to practice in the Kingdom. The General Court of Audit receives a copy of the auditor’s report after the Board approves it, without prejudice to the jurisdiction of the General Court of Audit.
What Does the Regulation Mean for Investors and Partners Contracting with the Fund?
The Fund has the power to enter into partnerships, establish companies with others and operate the facilities of higher education institutions jointly with others. This opens the door for companies and investors to contract with it on operational and investment projects as provided in Articles 4 and 6.
However, the Regulation sets out a specific approval path that a contracting party should verify before signing. Article 6 assigns to the Board the approval of partnerships, agreements and contracts, and Article 8 provides that the Chief Executive Officer signs them after Board approval.
The closing provision of Article 6 permits the Board to delegate its authority to approve partnerships and contracts and to accept grants to its Chairman, to some of its members or to Fund employees. It is therefore necessary to confirm that a valid approval decision or delegation exists before concluding any contract with the Fund.
As for the Fund’s employees, Article 15 makes them subject to the Labor Law and the Social Insurance Law. As a result, employment contracts concluded with the Fund are governed by the Labor Law and not by the civil service regulations.
What Time Limits and Deadlines Does the Regulation Set?
The Regulation contains a number of time limits and deadlines governing the Fund’s work and how it is overseen. The following table summarizes them along with the article that provides for each one.
| Action | Time Limit or Deadline | Article |
|---|---|---|
| Entry into force of the Regulation | From the date of publication in the Official Gazette | Article 16 |
| Regular Board meetings | At least three times a year | Article 7 |
| Written invitation to a Board meeting | At least seven days before the meeting | Article 7 |
| Membership term of institutional representatives and experts | Three years, renewable once | Article 5 |
| Submission of the annual report to the Prime Minister | Within ninety days of the end of the fiscal year | Article 12 |
| Submission of the final accounts to the Prime Minister | Within ninety days of the end of the fiscal year | Article 14 |
What Should Be Done Now
Universities and colleges may review their assets, facilities and endowments and identify what they could agree with the Fund to manage or operate. The Regulation requires agreement with the institution for managing its funds and operating its facilities, so it is advisable to prepare the terms of such an agreement early.
Investors and companies wishing to partner with the Fund may study its powers under Article 4 and identify the available areas of cooperation. Before signing, they are advised to request evidence of the Board’s approval of the contract or the delegation decision it has issued.
It is also important to follow the financial and administrative rules, spending controls and facilities operation policy that the Board will issue under Article 6. These documents will set out the practical details of dealing with the Fund and are not included in the published text of the Regulation.
Endowers and donors wishing to support higher education may consider entrusting the trusteeship of their endowments to the Fund. The endowment deed or donation document should be drafted carefully and take account of the relevant applicable procedures.
Frequently Asked Questions
Can the Fund manage a university’s funds without its consent?
This does not appear possible under the text, since paragraphs 3 and 4 of Article 4 require that managing investments and operating facilities be done by agreement with the relevant institution. This condition preserves a central role for the university or college in deciding which of its funds and facilities are entrusted to the Fund.
Can a private company establish a joint company with the Fund?
Paragraph 8 of Article 4 permits the Fund to establish companies and special purpose entities within the Kingdom jointly with others. This requires Board approval under paragraph 12 of Article 6 and compliance with the applicable statutory procedures.
Who represents the Fund before the courts?
Paragraph 13 of Article 8 provides that the Chief Executive Officer represents the Fund before the judiciary, government bodies and others inside and outside the Kingdom. The same provision permits the Chief Executive Officer to delegate this representation to others.
When does the Regulation take effect?
Article 16 provides that the Regulation is to be published in the Official Gazette and takes effect from the date of its publication. It appeared in the Umm Al-Qura Gazette on 5 Jumada al-Awwal 1448 AH, corresponding to 16 October 2026.
If your organization is a university, college or company considering a contract with the Fund, the Corporate and Investment team at Perfect Solution Lawyers and Consultants would be pleased to review your situation. You can request a meeting to discuss proposed partnerships and contracts and the investment structures that suit you.
The official source is the Umm Al-Qura Gazette on the Higher Education Fund Regulation page.
This article is for general awareness and does not constitute legal advice.