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.
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.
Implementing Regulations Of The Companies Law
The Regulations detail filing procedures for financial statements, auditor’s and directors’ reports, and auditor appointment criteria, including terms and exemptions for small and micro enterprises, ensuring comprehensive compliance in corporate governance.
The Law of Trade Names regulates the registration, usage, and safeguarding of trade names, ensuring equitable competition and legal acknowledgment for businesses operating under designated names within the commercial realm.
Executive Regulations of
Trade Names Law
The Executive Regulations of Trade Names provide detailed guidelines and procedures for the implementation of the Trade Names Law, outlining specific requirements and processes related to registration, usage, and protection of trade names.
The Law of Commercial Agencies governs the establishment, operation, and termination of commercial agency relationships, ensuring legal protection and fair practices for both principals and agents involved in business representation agreements.
The Implementing Regulations of The Law of Commercial Agencies
The Implementing Regulations of The Law of Commercial Agencies provide detailed procedures and guidelines for the application and enforcement of the law, ensuring adherence to its provisions and fair treatment within commercial agency relationships.
The Commercial Papers Law governs the issuance, negotiation, and enforcement of commercial papers such as promissory notes and bills of exchange, ensuring legal standards and protections in financial transactions and trade.
The Bankruptcy Law governs the legal processes and procedures for handling insolvency cases, including debt restructuring, liquidation, and reorganization, aiming to provide a fair and orderly resolution for financially distressed entities.
Implementing Regulations of The Bankruptcy Law
The Implementing Regulations of the Bankruptcy Law outline detailed procedures and guidelines for the application and enforcement of bankruptcy procedures, ensuring adherence to the law’s provisions and fair treatment of stakeholders involved in insolvency cases.
The Franchise Law oversees the formation, operation, and cessation of franchise agreements, safeguarding legal standards and protections for both franchisors and franchisees engaged in collaborative business ventures.
Implementing Regulations of The Franchise Law
The Implementing Regulations of the Franchise Law outline procedures and guidelines for enforcing franchise agreements, ensuring compliance with legal standards, and providing clarity for franchisors and franchisees in business relationships.
The Law of Commercial Register
The Law of Commercial Register governs the registration, maintenance, and accessibility of commercial records, ensuring transparency and legal compliance for businesses operating within the commercial sector’s regulatory framework.
The Implementing Regulations of The Commercial Register Law
The Implementing Regulations of the Commercial Register Law provide detailed procedures and guidelines for the application and enforcement of registration requirements, ensuring compliance with legal standards and facilitating transparency in commercial record-keeping practices.
The Chambers of Commerce Law governs the establishment, functions, and regulations of chambers of commerce, supporting trade, facilitating business growth, and ensuring compliance with commercial standards, practices, and regulatory requirements.
The Implementing Regulations of
The Chambers of Commerce Law
The Implementing Regulations of the Chambers of Commerce Law provide comprehensive guidelines for enforcing chamber operations, ensuring compliance with legal standards, and facilitating effective functioning within the commercial sector’s regulatory framework.
The Law of Commercial Data regulates the collection, storage, and utilization of commercial information, ensuring data privacy, security, and compliance with regulations in commercial transactions and operations.
The Implementing Regulations of the Commercial Data Law
The Implementing Regulations of the Commercial Data Law provide comprehensive guidelines for enforcing data management practices, ensuring adherence to legal standards, and promoting data privacy and security within commercial operations and transactions.
The Law on The Authorities of The Ministry of Commerce
The law on the Authorities of the Ministry of Commerce” outlines the powers, functions, and responsibilities delegated to the Ministry, ensuring effective governance, regulation, and promotion of commerce within its jurisdictional scope.
KSA FINANCIAL CRIMES LAWS
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.
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.
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.
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
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.
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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