As announced by Crown Prince Mohammad Bin Salman on 13 April 2023, four special economic zones (SEZs) will be established in Saudi Arabia. With each SEZ having a distinct area of focus, investors setting up entities in these SEZs will be taxed at 5% corporate tax for the first 20 years, 0% VAT on goods procured by the entity from others in the SEZ or from other sources inside or outside the Kingdom, 0% withholding for repatriating profits, customs duties deferral for goods inside SEZ or 0% Custom duties on capital equipment and inputs inside SEZ, and exemption from expat levy for employees and their families. With a plan to regulate the economic activities of companies in the SEZs, the

The real estate and construction sector serves as a backbone for any economy, and hosts of industries depend on it to grow and prosper. Saudi Arabia has always enabled this sector to develop and flourish. At the same time, the activities covering real estate and construction must be properly regulated to protect the interests of all stakeholders. Besides addressing the need for residential, commercial, and industrial space, the sector plays a significant role in attracting investment, boosting investment activities, and developing and sustaining infrastructure. Legal Aspects Matters covering real estate & construction encompass transactions from the simple leasing of a property for a fixed period to complex and complicated transactions combining different components stretching from the leasing of real estate

As per the Saudi Arabian Labor Law issued under Royal Decree No: M/51_ dated 23/08/1426 H. and amendments, employers are required to have an approved Work Rules Regulations Policy, and failure to comply may lead to penalties. In this downloadable PDF, we will discuss the key aspects of the policy, including the requirement for all entities to issue the policy, the two types of policies, new tools implemented to help submit drafts of company policy, the penalties for non-compliance, and how AlGhazzawi & Partners can help you ensure compliance. We are an accredited law firm that can assist in reviewing and submitting the Work Rules Regulations Policy to the Ministry for approval. If you have any questions about the policy

Saudi Arabia is predicted to be one of the world’s fastest-growing economies during this decade, according to the World Economic Outlook of October 2022 released by the International Monetary Fund.1   Saudi Arabia has committed to encouraging business investment in the Kingdom and welcomes foreign investors to engage in the Saudi market and be a part of its economic expansion. The Regional Head Quarters (RHQ) program launched in 2022, inviting companies to relocate their RHQ to Saudi Arabia. This program also announced that governmental agencies and public entities would not contract with any company not having its RHQ in The Kingdom. In a recent statement earlier this month to the British Financial Times, the Saudi Minister of Investment, Khalid Al-Falih,

On 7 March 2023, the Council of Ministers formally approved the Initiative for attracting multinationals to set up regional headquarters in Saudi Arabia.  Earlier, the Regulations related to contracting by governmental entities with the foreign entities, which do not have regional headquarters in Saudi Arabia (Regulations) were approved by the Council of Ministers on 22 December 2022 under Decree No: 377 dated 03/06/1444 H. Starting January 2024, the Regulations related to governmental agencies contracting with foreign entities not having their regional headquarters in Saudi Arabia will become effective. As a result, foreign entities not having their regional headquarters will find it difficult to bid for public projects. It is expected that many multinationals will set up regional headquarters in Saudi

Procedural Laws play a vital role in the judiciary and administration of justice. Good knowledge and insight into procedural laws are essential to take the right steps and decisions for raising lawsuits and following them throughout the trial. In its judicial reforms, Saudi Arabia has set up separate commercial courts across the country since 2017 to hear disputes related to commercial transactions and contracts, and disputes surrounding bankruptcies, financial restructuring, and violations of commercial regulations. Initially, the Supreme Judicial Council separated commercial circuits from the Board of Grievances and annexed them with the General Courts. Commercial courts and commercial circuits at the general courts were then required to follow Sharia Courts Procedural Law issued in 1435 H. In June 2020,

A new law governing the use of surveillance cameras in the Kingdom has been approved by the Council of Ministers, headed by King Salman. Pursuant to Royal Decree No: 164 dated 01/03/1444 H., Saudi Arabia has mandated the installation, operation, and maintenance of surveillance camera systems for a wide range of public and private entities. Locations where the installation and use of cameras will be mandatory and where their use is prohibited are outlined in the new legislation as published in the official gazette on 7 October, 2022, which also stipulates fines and penalties for violators. The Surveillance Camera System Law (The Law) will become effective in the first week of April, 2023, providing impacted establishments with six months to prepare for

Continuing with reforms in judiciary and in line with Vision # 2030, Saudi Arabia promulgated the Law of Evidences on 2 January, 2022 which was published in the official gazette on 7 January, 2022. The Law has become effective on 7 July, 2022. In essence, the Law of Evidences (Law) is a comprehensive law codifying the entire process and procedures in handling evidentiary issues. The Law covers documentary evidences, digital or electronic evidences, admissions, oaths, witness testimonies, inspection and expert reports. The Law prescribes and fixes fines for lapses, defaults, attempts to falsify or laying false accusations as well as provides for parties to claim damages for being harmed besides the provision of criminal proceedings for forgery and falsification of

Following the issuance of the Council of Ministers’ Decree which allows the foreign law firm to set up offices in Saudi Arabia (with certain conditions and requirements), the Ministry of Justice of Saudi Arabia has just released the draft of the ‘Rules for Setting up of Foreign Law Firms’ for public consultation. Comments were able to be provided until 14 April, 2022. Here is a short note covering the major provisions proposed in the draft: Objectives: Further development of legal practices, enhancing efficiency, adopting international experiences, and creating more qualitative job opportunities for citizens. Primary Conditions for licensing of foreign law firms: Absence of any judgment (final verdict) against the firm on charges of misuse of trust or dishonesty, or

The Minister of Human Resources and Social Development has issued a Ministerial Decree approving the Schedule of Penalties against Violations by Companies and Establishments covering various aspects of operations falling under the relevant Labor Regulations. The Schedule became operational from the date of its publication in the official gazette Ummul Qura under No: 4913 dated 13/05/1443 (17 December, 2021): This note lists the important provisions under Schedule ‘A’. However, it does not cover all items. Schedule ‘B’ lists penalties for recruitment offices for violating the provisions of undertaking recruitment and manpower services. Penalties in Saudi Riyals No Violation Class A – Est. having 51 Employees or more Class B – Est. having 1-50 employees Class C – Est. having 10