KSA CORPORATE LAWS
& LEGISLATIONS

Saudi Arabia has a solid legal framework and regulations in place to support the country’s governance and commercial environment. Saudi Arabia’s legal system is governed by Islamic law, or Sharia, and includes a variety of rules and regulations aimed at maintaining social peace, assuring ethical behaviour, and supporting economic progress. The legal framework of the country encompasses a wide range of issues, including commercial, labour, investment, and intellectual property laws, and serves as a solid basis for both domestic and foreign enterprises.

Disclaimer: Despite our efforts to provide the most up-to-date regulations, the laws mentioned above may not reflect the latest revisions, as they are subject to frequent changes.

LIST OF KSA CORPORATE LAWS & LEGISLATIONS

BUSINESS & COMPANY LAWS

The KSA Business and Company Laws form a crucial legal framework governing company formation, operation, and dissolution in the country. Serving multiple purposes, these laws are instrumental in fostering a favorable business environment, building investor confidence, and aligning corporate governance with global standards.

KSA COMPANIES LAWS

Saudi Arabia’s growing corporate laws, particularly the New Companies Law and the Anti-Money Laundering Law (AML), encourage transparency and economic progress. The New Companies Law simplifies business formation and operation, while AML law increases financial monitoring to combat money laundering, maintaining the Kingdom’s secure and compliant corporate environment.

Laws And Legislation

New Companies Law

The 2022 Companies Law of Saudi Arabia, issued under the Kingdom’s corporate legislation, modernizes the corporate legal framework, attracting foreign investment. Aligned with Vision 2030, it enhances flexibility, protects business interests, strengthens the private sector, and adheres to international standards, replacing the 2015 law.

KSA FINANCIAL CRIMES LAWS

Laws And Legislation

Anti-Money Laundering Law (AML)

The Saudi Central Bank, formerly SAMA, oversees financial services in Saudi Arabia. It prioritizes Anti-Money Laundering (AML) compliance within corporate laws. Saudi Arabia has strong AML programs, aligning with Islamic principles, internal rules, and international standards, reinforced by existing AML legislation.

TAXATION AND FISCAL LAWS

Taxation and fiscal laws in Saudi Arabia are comprehensive, covering income tax for foreign companies, value-added tax (VAT), corporate tax, customs duties, and excise tax. These regulations are designed to govern economic activities effectively while promoting financial stability within the country’s framework. Saudi Arabian resident companies, including foreign companies with a permanent establishment, are subject to corporate income tax on their profits. Customs duties are imposed on the import and export of goods. The rates vary depending on the type of goods and their origin.

KSA BUSINESS TAX LAWS

Saudi Arabia’s tax laws as mentioned below include the tax laws to consider when planning to set up a company in Saudi Arabia, such as the Excise Goods Tax Law, the Value Added Tax (VAT) Law, the VAT Implementing Regulation, and Transfer Pricing. These laws contribute to the country’s fiscal structure by levying taxes on certain products and services and instituting VAT, hence increasing revenue collection, and staying consistent with international standards.

Laws And Legislation
Excise Goods Tax Law

Royal Decree No. (M/86) of 27/8/1438 AH established Saudi Arabia’s Excise Tax Law, effective 11 June 2017 under the Gulf Cooperation Council States’ Common Excise Tax Agreement. It imposes an indirect tax on specified items, collected from producers, importers, or intermediaries, often included in future sales prices.

Laws And Legislation
Transfer Pricing Law

Transfer pricing, governed by Saudi Arabia’s Corporate Laws, refers to pricing in transactions among related parties or those under shared control, applying the Arm’s Length Principle. It ensures fairness in pricing as if dealings were between independent entities.

Laws And Legislation
Zakat Collection Law

Zakat Tax, mandated by Islam, is compulsory in Saudi Arabia under its Corporate Laws. Managed by the Zakat, Tax and Customs Authority (ZATCA), it’s collected annually at a rate of 2.5% from individuals and businesses for economic development.

KSA VALUE ADDED TAX LAWS

Saudi Vat Tax Law
Value Added Tax (VAT) Law

In Saudi Arabia, Value Added Tax (VAT) is an indirect tax applied to specified goods and services, regulated by corporate laws. It follows the Unified VAT Agreement, collecting tax across the supply chain and requiring registration for all economic activities.

Saudi Vat Implementing Regulation Law
VAT Implementing Regulation Law

Value Added Tax (VAT) in Saudi Arabia is levied on goods and services at each stage of the supply chain, from raw material purchase to consumer sale. Governed by corporate laws, it operates under the VAT Implementing Regulations.

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