Saudi Arabia has denied reports the will have a special status, following reports suggesting that alcohol could be allowed and residents granted certain privileges.
Andrew McEvoy, the head of tourism at , suggested in an interview with UAE outlet The National that despite a strict ban in Saudi Arabia, allowances for alcohol were not "off the table" and that the local population would be known as "Neomians".
There have been reports before that alcohol might be allowed in the resort city.
Saudi Arabia's (PIF), which owns the site, was quick to deny reports that NEOM would be treated as "a country within a country".
It said NEOM would be "absolutely subject to the sovereignty and systems" of Saudi Arabia and denied reports that residents and locals would "enjoy a special characteristic or nickname to distinguish them from others" in the kingdom, according to Saudi Press Agency reports.
"[The] NEOM project will work within special economic zones that are subject to the sovereignty and economy of the Kingdom of Saudi Arabia in terms of security, defense and regulatory aspects," SPA stated.
"This will be accompanied by developing special economic legislations related to the project in a way that achieves the best concepts of governance of economic zones in the world, so that NEOM turns to become among the most important points of attraction globally."
The National had reported that McEvoy said the people of NEOM would known as "Neomians", not Saudis, and the city would have "its own economic zone and its own authority".
"It’s an appealing destination to a lot of people because it's a chance to help create a new country almost completely from scratch," he told The National.
"We need to make sure its laws and regulations match the ambitions of those we are trying to attract to work and live here... We have got about 2,000 Neomians living there already along with about 10,000 construction workers."
The report also suggested that Saudi Arabia's - in part due to the kingdom being home to the Muslim holy sites Mecca and Medina - could be exempted in the $500 billion city.
AFP has approached NEOM for clarification on the comments but received no response, it said.
McEvoy predicted that NEOM - which is still in its early stages of construction - could be home to 2 million people over the next decade.
It is one of Saudi Arabia's most ambitious plans in a massive diversification drive - a futuristic city created from scratch in a sparsely populated corner of the kingdom. It will include according to some reports.
It will also incorporate 'The Line', a 170km neighbourhood set on a linear design which it hopes will host around a million people and some of the world's biggest tech companies.