From 8 October 2026, the Madrid Protocol enters into force in the Kingdom of Saudi Arabia. Trademark owners in the Kingdom can then extend protection internationally through a single centralized system, and foreign brand owners can designate Saudi Arabia in their international applications. National registration with the Saudi Authority for Intellectual Property (SAIP) remains available. This article explains what changes for foreign and Saudi companies, what Madrid filing does and does not guarantee, and how to choose the right route.

When Does the Madrid Protocol Take Effect in Saudi Arabia?

Saudi Arabia has been a member of the World Intellectual Property Organization (WIPO) since 1982 and is a party to more than 14 WIPO treaties. On 8 July 2026, the Kingdom deposited its instrument of accession to the Madrid Protocol (1989), which will enter into force for Saudi Arabia on 8 October 2026.

The accession reflects the Kingdom’s commitment to strengthening its intellectual property framework, expanding services to beneficiaries, and making the national economy more competitive. It lets rights holders use international systems that make it easier to protect trademarks and industrial designs at both international and national levels.

What Is the Madrid System?

The Madrid System is an international system that lets trademark owners seek protection in the member countries it covers through one centralized system. As of the date of entry into force, it covers 133 countries.

What Does the Accession Mean for Foreign Companies?

Foreign companies outside the Kingdom that want to extend trademark protection to Saudi Arabia can now designate Saudi Arabia in their international trademark applications, seeking protection in the Kingdom through the Madrid System.

What Does the Accession Mean for Saudi Companies?

Saudi Companies Protecting Their Trademarks Abroad Through Madrid

A Saudi company that wants to protect its trademark outside the Kingdom through the Madrid System must first have a trademark application or basic registration in Saudi Arabia. It can then file an international application to seek protection in other member countries of the system, which covers 133 countries as of the date of entry into force.

Saudi Companies Protecting Their Trademarks Only in the Kingdom

National trademark registration with the Saudi Authority for Intellectual Property (SAIP) remains available. Trademark owners can continue to register in Saudi Arabia without seeking international protection. The Madrid System is an additional route for international protection and does not replace national registration.

Does a Madrid Application Guarantee Protection in All 133 Countries?

No. Protection in each country covered by the system is subject to examination by that country under its own laws and regulations. Filing an international application under the Madrid System does not automatically register the trademark in all 133 countries, because each country examines the application separately.

National Filing or Madrid: Which Route Fits Your Objective?

Conclusion: Review Your Trademark Strategy Before 8 October

The entry into force of the Madrid Protocol in Saudi Arabia on 8 October 2026 adds another option to the available mechanisms for trademark protection. It does not replace national registration procedures. Instead, it provides an additional international route through which Saudi and foreign companies can expand and manage trademark protection when operating across multiple markets.

Companies with regional or international expansion plans should assess whether the Madrid System belongs in their intellectual property protection strategy. Trademark owners with registered marks, or those planning expansion outside the Kingdom, should review their strategy based on the number of target countries, their expansion plans, and the scope of protection required.

As accredited intellectual property agents before SAIP, AHYSP Law Firm provides full services to trademark owners registering locally through SAIP or internationally through the Madrid Protocol, including advice and follow-up on the relevant regulatory requirements on the client’s behalf. To discuss your trademark portfolio, contact us at info@ahysp.com.

Frequently Asked Questions

When does the Madrid Protocol enter into force in Saudi Arabia?

On 8 October 2026. Saudi Arabia deposited its instrument of accession on 8 July 2026.

Can foreign companies now protect their trademarks in Saudi Arabia through Madrid?

Yes. From the entry into force, Saudi Arabia can be designated in international trademark applications under the Madrid System.

What does a Saudi company need before filing an international application?

A trademark application or basic registration in Saudi Arabia.

Can I still register a trademark directly with SAIP?

Yes. National registration with SAIP remains available; the Madrid System is an additional route, not a replacement.

Does one Madrid application register my trademark in all 133 countries?

No. Each country examines the application under its own laws and regulations.

The post Saudi Arabia Joins the Madrid Protocol | Trademark Guide appeared first on AHYSP Law Firm.

The governing legislation is the Labor Law (Royal Decree No. M/51 of 1426H), as amended in 2024/2025 by Royal Decree No. M/44 of 1446H. The legal framework regulates wage payment obligations and provides employees with formal routes to pursue unpaid employment entitlements.

This article explains your rights when an employer does not pay your salary in Saudi Arabia, what evidence may support an unpaid salary claim, how the Wage Protection System in Saudi Arabia may be relevant, and how to pursue the matter through MHRSD and, if necessary, the Labor Court. It also covers final salary and end-of-service benefit claims where employment has ended.

What is an unpaid salary claim in Saudi Arabia?

An unpaid salary claim in Saudi Arabia is a labor claim by an employee seeking wages or related contractual employment payments that an employer has failed to pay when due. For private-sector workers, the formal process generally begins with MHRSD Friendly Settlement and may proceed to the competent Labor Court if settlement fails.

Is an Employer Allowed to Delay Your Salary in Saudi Arabia?

An employer cannot simply postpone an employee’s wages without a lawful basis.

Saudi labor rules provide a judicial remedy where an employer delays wages beyond their due date without legitimate justification. The Labor Court may order payment of outstanding wages, and an unjustified wage delay may also expose the employer to sanctions under the applicable labor framework.

The issue is therefore not limited to an employer refusing to pay anything at all. A wage dispute may also concern:

The exact amount recoverable depends on the employment contract, payment history and the nature of each claimed entitlement.

What Should You Do If Your Employer Has Not Paid Your Salary?

Before starting formal proceedings, an employee should create a clear record of the unpaid amount.

A written request to the employer can be useful. It should identify the salary period affected, the amount believed to be outstanding and the date payment was expected. Email, company HR systems and other traceable written communications are generally preferable to relying only on verbal conversations.

This step should not be confused with the formal MHRSD complaint. Its purpose is primarily evidential: it shows what the employee requested and how the employer responded.

Employees should also avoid waiting indefinitely because procedural time limits apply to labor claims. The current MHRSD service conditions should be checked when filing, particularly if the employment relationship has already ended.

What Evidence Should You Prepare for an Unpaid Salary Claim?

The claim should show both the employment relationship and the payment that is missing.

Useful documents may include:

• the employment contract, including a Qiwa-documented contract where applicable;
• bank statements showing previous salary payments and the missing payment period;
• payslips or payroll records;
• correspondence with HR, payroll staff or management;
• written acknowledgements that salary remains outstanding;
• evidence of contractual allowances, commissions or bonuses being claimed;
• Wage Protection System records where available;
• termination, resignation or contract-expiry documents if employment has ended;
• calculations showing separately each unpaid entitlement;
• identification and employment details; and
• a valid power of attorney where a representative is acting for the employee.

MHRSD expressly requires an employment contract, if available, or other evidence establishing the contractual relationship. This is significant because the absence of a physical signed contract does not necessarily prevent an employee from proving the employment relationship. Current Labor Law information published by MHRSD also recognises that an employment contract may remain valid even where it was not put in writing.

How Do You File a Labor Complaint Online in Saudi Arabia?

For an ordinary private-sector labor dispute, Friendly Settlement for Labor Disputes is the formal starting point.

MHRSD describes Friendly Settlement as the first stage for resolving disputes between workers and employers. The process is electronic and aims to give the parties an opportunity to resolve the dispute before litigation.

To file, the employee uses the MHRSD electronic services portal and selects the Friendly Settlement – File a Lawsuit service.

The employee then provides the claimant’s details, employer information, employment information and the competent settlement office, selects the subject of the claim, attaches the supporting documents and submits the case.

After MHRSD reviews and accepts the application, the parties receive notifications concerning the settlement proceedings. If they reach an agreement, a settlement record is issued. If settlement fails, the employee can proceed with the claim before the competent Labor Court.

What Does the Wage Protection System Do in an Unpaid Salary Case?

The Wage Protection System (WPS) and the employee’s labor complaint serve different purposes.

WPS allows MHRSD to monitor whether private-sector establishments pay employees according to registered wage information. The system compares wage-payment information and helps identify discrepancies involving the timing or amount of salary payments.

For an employee, that makes wage-protection data potentially important evidence where an employer claims that salary was paid correctly.

However, WPS should not be presented as an automatic debt-recovery mechanism. A wage discrepancy identified through wage-protection records does not replace the employee’s labor claim where payment remains outstanding.

In practical terms:

WPS helps document compliance. MHRSD Friendly Settlement deals with the dispute. The Labor Court adjudicates an unresolved claim.

Keeping those three functions separate makes the procedure much easier to understand.

What Happens If the Employer Does Not Settle the Complaint?

If Friendly Settlement does not resolve the dispute, the matter can move into the judicial stage.

MHRSD issues the relevant record showing that an amicable resolution was not achieved, after which the claimant may proceed before the competent Labor Court in accordance with Ministry of Justice procedures.

The Ministry of Justice provides an electronic File Statement of Claim service through Najiz for cases including labor disputes. The claimant enters the parties’ details, selects the appropriate case category, states the claim and uploads the supporting documents.

At this stage, precision becomes particularly important. The employee should identify separately what is being claimed rather than presenting one unexplained total.

For example, unpaid salary, wrongful deductions, contractual commission and end-of-service benefits may arise from the same employment relationship but require different factual and legal support.

Can You Claim Unpaid Salary After Leaving the Company?

Yes. Ending employment does not automatically extinguish outstanding salary or other employment rights.

Where the employment relationship has ended, the claim may include unpaid final salary together with any other entitlement that remains legally due, such as an applicable end-of-service award.

The Labor Law requires employers to settle wages and other employment entitlements after termination within the applicable statutory settlement period.

An employee preparing an end of service benefits claim should therefore avoid combining every amount under the label “unpaid salary.” The final settlement should be broken down so that it is clear which amount relates to salary, which relates to end-of-service benefits and which relates to any other contractual entitlement.

[internal link: End-of-Service Benefits in Saudi Arabia]

What If the Employer Keeps Promising to Pay?

Repeated assurances such as “next week” or “when the company receives funds” do not themselves resolve an unpaid wage claim.

Employees should preserve those communications because an acknowledgement by the employer may be relevant evidence. At the same time, relying indefinitely on informal promises can create procedural problems if the employee allows the applicable claim period to expire.

A practical approach is to preserve the correspondence, calculate the unpaid entitlement accurately and consider the formal MHRSD process where voluntary payment does not follow.

Can You File an Unpaid Salary Claim Without a Written Employment Contract?

Potentially, yes.

MHRSD’s Friendly Settlement requirements allow the claimant to submit the employment contract or evidence proving the contractual relationship. The Labor Law information currently published by MHRSD also states that an employment contract can remain valid even if it was not written, with the worker able to prove the contract and resulting rights through available means of proof.

Bank transfers showing recurring salary payments, workplace correspondence, employer records and other employment documentation may therefore become particularly important where the contract itself is unavailable.

Can a Lawyer File the Labor Claim for You?

Legal representation may be useful where the employee has already left Saudi Arabia, the employer disputes the employment relationship or salary amount, several types of employment entitlements are involved, or the matter is moving from settlement into Labor Court proceedings.

MHRSD permits representatives to participate in the Friendly Settlement process where the required power of attorney gives the representative the appropriate authority, including the powers relevant to settlement. The Ministry of Justice likewise recognises representation through a valid power of attorney for judicial proceedings.

A lawyer can also help organise the claim so that the contractual wage, payment history, disputed deductions and end-of-service amounts are presented separately and supported by the correct documents.

Do Domestic Workers Use the Same Labor Complaint Procedure?

No. Domestic-worker disputes have a separate filing route.

MHRSD states that domestic labor disputes are first submitted through the Ministry’s dedicated domestic labor lawsuit service for amicable settlement. If settlement cannot be reached, the dispute is referred to the Labor Courts for adjudication.

Employees should therefore identify which employment regime applies before selecting an electronic complaint service.

When Should You Contact an Unpaid Wages Lawyer in Saudi Arabia?

Many straightforward wage complaints can begin through MHRSD without legal representation. Legal assistance becomes more valuable when the amount is disputed, evidence is incomplete, the employer denies the employment relationship, the employee has left Saudi Arabia or the claim includes several categories of compensation.

AHYSP can assist employees and businesses with reviewing employment documents, identifying the correct claim, preparing supporting evidence, participating through an appropriate power of attorney and representing clients in labor proceedings where required.

The key is not simply to show that money is missing. A properly prepared unpaid salary claim should show why the amount became due, what remains unpaid and which documents prove it.

Conclusion

Saudi law provides a defined route for employees whose wages have not been paid. The employee can document the outstanding amount, initiate Friendly Settlement through MHRSD and, if necessary, pursue the claim before the Labor Court through the applicable Ministry of Justice procedures.

Wage Protection System records, employment contracts, bank statements and written communications can all play different roles in establishing the claim. Former employees should also review whether unpaid final salary or end-of-service entitlements remain outstanding.

Where the employer disputes the amount, the employee is outside Saudi Arabia or the matter requires court proceedings, AHYSP can review the case and assist with the appropriate labor-dispute procedure.

For customized legal consultation, please contact us at info@ahysp.com.

The post Unpaid Salary in Saudi Arabia: Your Rights and How to File a Labor Complaint appeared first on AHYSP Law Firm.

Introduction

If your employer is holding your passport in Saudi Arabia, there are several practical steps you can take to recover it. In many cases, the first step is simply to request its return in writing and keep evidence of that request. If the employer refuses or ignores it, the matter can be escalated through the appropriate Saudi labour authorities.

Saudi Arabia’s Ministry of Human Resources and Social Development (MHRSD) expressly states that an employer may not withhold the passport, residence document or medical insurance card of a non-Saudi worker. This rule forms part of the Saudi labour framework under the Labor Law (Royal Decree No. M/51 of 1426H), as amended in 2024/2025, and its implementing regulations.

What Does Passport Withholding Mean?

Passport withholding in Saudi Arabia means an employer keeps a worker’s original passport rather than allowing the worker to retain control of it. Saudi labour rules prohibit employers from withholding the passports of non-Saudi workers, and domestic-worker regulations separately prohibit employers from retaining passports and other personal documents.

The practical issue often arises when an employer has taken possession of the passport and does not return it when the employee asks.

If that happens, the worker has several possible routes.

What Should You Do If Your Employer Withholds or Confiscates Your Passport in Saudi Arabia?

1. Ask for the Passport Back in Writing

Start with a clear written request.

An email, WhatsApp message or other written communication can simply state that you are requesting the immediate return of your original passport.

Keeping the request in writing is useful because it creates evidence showing:

• that the employer has the passport;
• that you requested its return;
• when the request was made; and
• how the employer responded.

If the passport is returned at this stage, further action may not be necessary.

If the employer refuses, ignores the request or imposes conditions for returning it, the worker can consider a formal complaint.

How Can You Report Passport Withholding in Saudi Arabia?

2. Report the Employer to MHRSD

Private-sector workers can use the MHRSD Reporting Violations of Labor Regulations service to report violations of Saudi labour rules.

The Ministry states that the service allows individuals to report private-sector labour violations electronically without having to visit the authority in person.

When submitting a report about an employer holding your passport, it can be useful to retain documents such as:

• a copy or photograph of the passport;
• your employment contract;
• your iqama details;
• messages requesting return of the passport;
• any written refusal from the employer; and
• correspondence showing when or why the passport was taken.

The exact evidence required will depend on the circumstances.

3. Start a Labour Dispute If the Employer Still Refuses

Where the passport issue forms part of a wider employment dispute, the worker may need to use the formal labour-dispute process.

For employees covered by the general Saudi labour framework, Friendly Settlement for Labor Disputes is the first stage for many employment claims. MHRSD receives the claim electronically and attempts to resolve the dispute between the worker and employer. If settlement is unsuccessful, the dispute may proceed to the competent Labor Court.

This route may be particularly relevant where passport withholding is connected with other issues, such as:

• unpaid salary;
• termination disputes;
• refusal to provide employment documents;
• pressure on the worker to accept certain conditions; or
• other alleged breaches of the employment relationship.

Can You Complain to the Saudi Human Rights Commission?

Yes. The Saudi Human Rights Commission operates a complaint and reporting service that expressly covers labour rights and other human rights matters.

Residents and workers can submit complaints together with supporting documents and details of any previous reports made to the relevant authorities.

This can provide another official channel where the circumstances go beyond an ordinary administrative employment disagreement.

If the retention of the passport is accompanied by threats, violence, forced labour, restrictions on movement or other serious conduct, the situation may require more urgent assistance from the competent Saudi authorities.

What If You Are a Domestic Worker?

Domestic workers are subject to a separate regulatory framework.

Saudi regulations expressly require domestic employers not to retain the domestic worker’s passport or personal documents.

The dispute procedure also differs from the ordinary private-sector employee route. Domestic labour disputes first go through the MHRSD amicable-settlement mechanism for domestic workers. If no settlement is reached, the matter may then proceed to the Labor Court.

A domestic worker should therefore make sure that the complaint is submitted through the procedure applicable to domestic employment rather than the general employee process.

Can Your Embassy Help If Your Employer Keeps Your Passport?

An expatriate worker may also contact their embassy or consulate, particularly where access to the passport creates an urgent consular or travel problem.

The embassy cannot replace the Saudi labour authorities or courts in an employment dispute, but consular assistance may be useful depending on the worker’s nationality and circumstances.

Workers should generally keep a digital copy of their passport, visa, iqama and employment documentation somewhere they can access independently.

When Should You Contact a Lawyer About Passport Withholding?

Some cases are resolved after a written demand or an MHRSD report. Others become part of a broader dispute between the worker and employer.

Legal representation can become particularly useful where:

• the employer repeatedly refuses to return the passport;
• the worker needs the passport urgently;
• the employer is making return of the passport conditional on signing documents or waiving rights;
• salary, termination or immigration issues are also involved;
• previous complaints have not resolved the matter; or
• the worker has already left the employer and needs representation in Saudi Arabia.

A Saudi lawyer can review the employment relationship, determine the appropriate complaint or court procedure, prepare formal correspondence and represent the worker where a valid power of attorney permits representation. MHRSD’s Friendly Settlement procedure expressly provides for authorised representatives.

Getting Your Passport Back: Choosing the Right Route

The legal position on passport withholding in Saudi Arabia is straightforward: an employer should not retain a non-Saudi employee’s passport.

What matters in practice is choosing the appropriate response. A written request may resolve the situation quickly. If it does not, MHRSD reporting procedures, labour-dispute mechanisms and, where appropriate, the Human Rights Commission provide formal routes for escalation.

Where the employer continues to refuse, the passport issue forms part of a larger employment dispute, or the worker needs representation in Saudi Arabia, AHYSP can assess the circumstances and advise on the appropriate legal procedure.

Our lawyers can assist with formal demands, MHRSD proceedings, labour disputes and representation before the competent authorities where required.

For customized legal consultation, please contact us at info@ahysp.com.

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The post Passport Withholding in Saudi Arabia: How to Get Your Passport Back appeared first on AHYSP Law Firm.

Winning a lawsuit does not necessarily mean that the successful party immediately receives the money awarded by the court.

Where the debtor pays voluntarily, the matter may end quickly. Where the debtor refuses to pay, delays payment, or has assets that must be located and attached, the creditor may need to move from the litigation stage into formal enforcement.

Saudi Arabia operates specialized Execution Courts for this purpose. The Ministry of Justice confirms that these courts enforce judgments, judicial decisions and orders, as well as several other categories of enforceable instruments. They also supervise compulsory enforcement and hear disputes arising from the execution process.

If the underlying debt has not yet been reduced to a judgment or another enforceable instrument, the creditor should first consider the available recovery routes discussed in.

See also: Debt Collection in Saudi Arabia: A Guide for Individuals and Businesses

What Is Judgment Enforcement in Saudi Arabia?

Judgment enforcement in Saudi Arabia is the legal process used to compel compliance with an enforceable court decision after the merits dispute has been decided. For monetary judgments, the creditor applies through the enforcement system, and the Execution Court can supervise compulsory measures against the debtor and available assets where voluntary payment does not occur.

This distinction is important. The court that determines whether money is owed and the enforcement process used to collect the amount perform different functions.

At the enforcement stage, the central question is usually no longer whether the creditor was right on the original claim. Instead, the focus shifts to whether there is an enforceable instrument, what remains unpaid, and what lawful measures can be taken to obtain compliance.

Which Judgments Can Be Enforced in Saudi Arabia?

The Saudi Enforcement Law recognizes court judgments, judicial decisions and orders as enforcement instruments. The Ministry of Justice also identifies other instruments that can be brought before the Execution Court, including certain settlement documents, negotiable instruments, authenticated contracts, arbitral awards with the required enforcement status and qualifying foreign judgments.

For a creditor who has already completed court proceedings, the important practical question is whether the judgment has reached the stage at which compulsory enforcement is legally available.

A judgment that remains subject to a form of challenge that prevents compulsory enforcement may require the creditor to wait until the necessary procedural status has been reached, unless the judgment is capable of immediate enforcement under the applicable rules.

The enforceability of the particular judgment should therefore be checked before filing the enforcement request.

See also: Breach of Contract: Legal Remedies in Saudi Arabia

Which Court Enforces a Judgment in Saudi Arabia?

For ordinary civil and commercial enforcement, the competent authority is generally the, operating under the Ministry of Justice.

Execution Courts exist across cities and governorates in the Kingdom. Where a separate Execution Court does not exist, enforcement panels may operate within the general courts.

The Execution Court does more than receive payment requests. Its function includes supervising compulsory enforcement and dealing with disputes connected with execution.

This becomes particularly relevant where the debtor disputes the enforcement procedure itself, claims that payment has already been made, raises an issue concerning attached property, or where another party claims an interest in an asset targeted for enforcement.

How Do You File a Najiz Enforcement Request?

Saudi judgment enforcement is highly digitalized.

The Ministry of Justice currently provides a “File an enforcement application” service through Najiz. An applicant logs into Najiz, selects the Enforcement services package, starts a new application, identifies the type of enforcement, enters information concerning both parties, provides the relevant application details and uploads the enforcement document.

Where the original enforcement document is not in Arabic, the Ministry of Justice service instructions provide for uploading an Arabic legalized translation.

What should you prepare before filing?

Depending on the judgment and applicant, the creditor should be ready to provide the information and documents required by Najiz.

The Ministry of Justice currently lists requirements including:

• completed Najiz profile information;
• an active IBAN linked to the enforcement applicant;
• documents required for the relevant type of enforcement instrument;
• debtor identification information;
• the debtor’s address, where available; and
• A valid power of attorney containing the necessary enforcement authority where an agent files the request.

The Ministry also states that the applicant can file electronically without an in-person court visit and that the service may be used by the enforcement applicant, an authorized agent or the legal representative of a legal entity.

Accuracy at this stage matters. Incorrect debtor details, incomplete authority for a representative, inconsistencies in the amount claimed or problems with the enforcement document can create avoidable procedural delays.

What Happens After the Enforcement Request Is Filed?

After filing, the applicant receives an enforcement application number and can follow the matter through Najiz. The platform also allows relevant users to review enforcement applications and monitor their status.

The debtor must then be formally required to comply with the enforcement decision within the applicable statutory period.

If the debtor pays, the payment can be reflected within the enforcement process. Saudi Ministry of Justice services also provide mechanisms for documenting payments made outside the court process so that the enforcement record accurately reflects what remains outstanding.

If the debtor does not comply, compulsory enforcement measures may follow under the Saudi Enforcement Law.

What Can the Execution Court Do If the Debtor Does Not Pay?

An enforceable judgment gives the creditor access to compulsory execution mechanisms that were generally unavailable while the underlying claim was still being litigated.

Depending on the debtor’s position and the circumstances of the case, enforcement can involve measures directed at identifying, preserving and ultimately realizing assets that may satisfy the judgment.

These may include procedures concerning:

• bank accounts and monetary assets;
• property owned by the debtor;
• receivables or funds held by third parties;
• registered assets;
• commercial or professional information relevant to enforcement; and
• The sale or transfer of assets through the enforcement process where legally appropriate.

The Enforcement Law gives the enforcement judiciary powers relating to disclosure of assets, attachment, compulsory execution and disposal of attached property. The precise measures available depend on the enforcement instrument, debtor and procedural circumstances.

A creditor should therefore avoid assuming that filing the Najiz request is the final step. In more difficult cases, active management of the enforcement file may be necessary.

What If the Debtor Has No Money in Their Bank Account?

A common enforcement problem arises where the judgment is valid but there is no immediately accessible cash in the debtor’s known accounts.

That does not automatically make the judgment worthless.

The enforcement process can extend beyond a single bank account. The creditor may need to consider what assets or rights belong to the debtor, whether receivables are due from third parties, whether registered property exists, and whether assets can lawfully be attached and realized.

The practical difficulty is often not obtaining the judgment but identifying assets capable of satisfying it.

Where the debtor is a company, the analysis may also require attention to its current legal status, assets, and commercial activities and whether insolvency or bankruptcy proceedings affect individual enforcement.

What Happens If the Debtor Is in Bankruptcy?

Enforcement and bankruptcy should not be treated as completely separate issues.

If formal bankruptcy proceedings have begun, statutory restrictions or moratorium rules may affect a creditor’s ability to continue individual enforcement against assets forming part of the bankruptcy estate.

A creditor holding a judgment may therefore need to determine whether to continue through the Execution Court, participate in the bankruptcy process, assert security rights, or take another procedural step permitted under the applicable bankruptcy framework.

A court judgment confirms the creditor’s legal position, but it does not place that creditor outside the rules governing insolvency and creditor priority.

See also: Bankruptcy Law in Saudi Arabia – what creditors should know when a debtor enters restructuring or insolvency proceedings.

Can You Enforce a Foreign Court Judgment in Saudi Arabia?

Potentially, yes, but enforcing a foreign judgment is not identical to enforcing a judgment originally issued by a Saudi court.

The Ministry of Justice expressly includes judgments and judicial orders issued in foreign countries among the types of instruments that may fall within the jurisdiction of the Execution Courts.

The Saudi Enforcement Law imposes additional recognition and enforcement conditions for foreign judgments. Relevant international treaties and agreements may also affect the analysis.

Among the issues that may need to be established are whether the foreign court had proper jurisdiction, whether the parties received proper notice and an opportunity to defend themselves, whether the judgment is final, whether it conflicts with an existing Saudi judgment, and whether enforcement would conflict with Saudi public order.

Foreign judgments therefore require a separate enforceability review before the creditor assumes that an overseas award can simply be uploaded to Najiz and collected in the same way as a domestic judgment.

Are Judgments Against Saudi Government Authorities Enforced the Same Way?

Not necessarily.

Saudi Arabia has a separate enforcement framework concerning judgments and enforceable instruments falling within the administrative jurisdiction of the Board of Grievances.

This means that a party holding a judgment against a public authority should first identify whether the ordinary Ministry of Justice enforcement system or the administrative enforcement framework applies.

The Board of Grievances continues to publish guidance concerning its separate enforcement regime, including procedural requirements applicable to administrative enforcement claims.

This jurisdictional distinction should be resolved before an enforcement application is filed.

Why Can Judgment Enforcement Still Become Difficult?

The existence of a judgment solves the question of legal entitlement. It does not necessarily solve every collection problem.

Enforcement may become more complicated where:

• the debtor’s assets are difficult to identify;
• the debtor has already transferred or disposed of assets;
• third parties claim rights over targeted property;
• the debtor disputes how much remains payable;
• payments were made outside the enforcement system;
• a company debtor has entered bankruptcy or restructuring;
• the judgment was issued outside Saudi Arabia;
• the creditor is acting through a foreign company or representative; or
• Procedural applications or enforcement disputes arise during execution.

For businesses, this is why litigation strategy should consider enforcement before judgment rather than only after the case has been won.

How Can a Lawyer Help Enforce a Judgment in Saudi Arabia?

Where the debtor pays voluntarily, enforcement may be straightforward.

More difficult cases can require legal representation after judgment to ensure that the creditor moves from a favorable court decision to actual recovery.

A Saudi enforcement lawyer may assist with reviewing the enforceability of the judgment, preparing and filing the Najiz enforcement request, acting under a power of attorney, monitoring procedural developments, requesting appropriate enforcement measures, responding to debtor objections, addressing asset-related issues and dealing with foreign or administrative judgments where additional rules apply.

For foreign companies and individuals outside Saudi Arabia, representation can also reduce the practical difficulty of managing an enforcement file remotely.

Conclusion: A Judgment Is Only Valuable If It Can Be Enforced

Enforcement of judgments in Saudi Arabia provides creditors with a formal legal route to convert a successful judgment into payment or other required performance. Najiz allows the creditor to begin and monitor the enforcement process electronically, while the Execution Court supervises compulsory measures where voluntary compliance does not occur.

The strongest recovery strategy often starts before the original lawsuit ends. Identifying the correct debtor, preserving reliable evidence, understanding potential assets and assessing enforcement risk can materially affect the creditor’s practical position after judgment.

Hamad in Association with Youssry Saleh & Partners assists businesses and individuals with judgment enforcement, Najiz applications, enforcement disputes and related debt-recovery proceedings in Saudi Arabia. Our team can also assess foreign judgments and more complex enforcement situations before execution proceedings begin.

This article provides general information only and does not constitute legal advice.

For customized legal consultation, please contact us at info@ahysp.com.

The post Enforcement of Judgments in Saudi Arabia: Collecting What the Court Awarded You appeared first on AHYSP Law Firm.

Introduction

Sending money to the wrong bank account and transferring money to a scammer may produce the same immediate problem: the money has left your account. Legally, however, they are not the same.

Saudi payment rules distinguish between a transfer that the payer made using incorrect beneficiary details, a payment that the payer did not authorize, and a payment that the payer authorized after being deceived. Each situation can lead to a different recovery process.

A victim may therefore need to use several routes at the same time: contacting the bank or payment provider, reporting suspected financial fraud, preserving evidence, making a civil repayment claim and, after obtaining an enforceable judgment, using the Saudi enforcement system.

What Does Recovering Money After a Mistaken Transfer or Scam Mean?

Money recovery after a mistaken transfer or scam means using banking recall procedures, regulatory complaints, criminal reporting, and, where necessary, civil proceedings to seek repayment. Saudi law distinguishes an incorrect transfer initiated by the payer from an unauthorized transaction and from money obtained through deception, so the correct remedy depends on the facts.

What Should You Do Immediately After Sending Money to the Wrong Person or a Scammer?

Speed matters, particularly before funds move to another account or leave the Saudi banking system.

The first step should usually be to contact the bank or payment service provider through its official channels and give it the transaction information. Explain clearly whether:

• you entered the wrong IBAN, account number or beneficiary;
• someone accessed your account without permission;
• you authorized the payment because someone deceived you;
• you paid for goods, services or an investment that you now believe was fraudulent; or
• the recipient acknowledges receiving the money but refuses to return it.

Keep the transaction receipt, reference number, beneficiary details and all correspondence relating to the payment.

For suspected scams, preserve advertisements, websites, social-media profiles, phone numbers, emails, WhatsApp or other messages, invoices, contracts and any instructions the fraudster gave you. Avoid deleting conversations even if you have already taken screenshots.

You should also stop further payments. Scammers sometimes claim that another transfer is required to release, refund or recover the first payment.

Can You Cancel a Bank Transfer Made by Mistake in Saudi Arabia?

A mistaken transfer does not automatically disappear because the sender contacted the bank.

Under the Implementing Regulations of the Payments and Payment Services Law, where the payer initiated the transaction but supplied an incorrect beneficiary identifier or incorrect banking information, the payment service provider is generally not responsible for the payer’s error. However, the provider must make reasonable efforts to recover the funds from the incorrect recipient, and the recipient’s payment provider must cooperate with those recovery efforts.

This makes immediate notification valuable, but it does not mean that the bank can simply debit the recipient’s account whenever the sender requests it.

If recovery through the payment providers fails, the Saudi rules also provide a mechanism under which the payer may make a written request for available relevant information to support a claim for recovery against the recipient.

What if the recipient refuses to return the mistaken payment?

At that stage, the problem may move from banking recovery to a civil claim.

The Saudi Civil Transactions Law, which has been in force since 16 December 2023, contains rules addressing unjust enrichment and payments received when no payment was legally due. In principle, a person who receives money without a lawful basis may have an obligation to return it, although the exact claim depends on why the payment was made and the surrounding circumstances.

This distinction matters because you do not necessarily need to prove that the recipient committed fraud. A transfer may have been completely accidental, yet the recipient may still lack a legal basis for keeping the money.

What if the Transaction Was Not Authorized at All?

A genuinely unauthorized payment falls under a different regulatory framework.

Saudi payment regulations treat a transaction as authorized when the payer has given consent using the method agreed with the payment provider. Where a payer disputes authorization, the payment provider bears regulatory obligations concerning proof that the transaction was authenticated, properly recorded and not affected by a technical deficiency.

The regulations also establish a refund framework for unauthorized transactions, subject to the applicable conditions and exceptions. The result can therefore differ significantly from a situation where the customer personally instructed the transfer but entered the wrong beneficiary information.

When reporting the transaction, describe exactly what happened rather than simply calling every loss “fraud”. Whether you initiated the payment can materially affect the bank’s assessment.

What if You Authorized the Transfer Because a Scammer Deceived You?

This is one of the most important distinctions for anyone trying to recover money after a scam in Saudi Arabia.

Suppose a victim receives a fraudulent investment offer, fake invoice, impersonation message or false request for payment. The victim then logs into their own banking application and approves the transfer.

The transaction may differ from an unauthorized account takeover because the victim personally initiated the payment. That does not make the scam lawful, and it does not prevent claims against the fraudster. It does mean that the automatic regulatory treatment applicable to a genuinely unauthorized transaction may not apply in the same way. The classification depends on the facts surrounding consent, authentication and execution.

A victim should still contact the bank immediately and ask whether the transfer can be recalled, intercepted or otherwise recovered.

At the same time, the conduct may fall within Saudi Arabia’s Anti-Financial Fraud and Breach of Trust Law where another person obtained money without legal right through deception or other fraudulent methods.

Read also: Cybercrime in Saudi Arabia: Complete Guide to Laws, Risks, and Protections

How Do You Report Financial Fraud in Saudi Arabia?

Reporting the incident and recovering the money are related, but they are not identical processes.

For fraud involving bank cards, the Saudi National Platform provides a Financial Fraud Reports service through Absher under Public Security. The service allows users to submit information relating to the incident for review and follow-up.

Other scam situations may require reporting through the appropriate police or Public Security channel depending on how the fraud occurred.

If the dispute concerns how a Saudi bank, payment company or another SAMA-supervised financial institution handled the incident, individuals may also use the Saudi Central Bank’s complaint service for regulated financial institutions.

These channels serve different purposes. A complaint about a bank’s handling of a transaction is not automatically a criminal complaint against the scammer.

What if the scam involved an unlicensed financial company?

If someone presents themselves as a financial institution, investment platform or other regulated financial provider, check whether the entity appears among those authorized by the relevant Saudi regulator.

SAMA specifically warns that unlicensed financial activities can expose customers to fraud and financial loss and provides an official channel for reporting suspected unlicensed activities within its regulatory scope.

What Evidence Should You Keep After a Scam or Mistaken Transfer?

A recovery claim becomes harder when the payment is clear but the reason for making it cannot be demonstrated.

Keep, where available:

• the bank transfer confirmation;
• the transaction number and date;
• the beneficiary’s name and account information;
• contracts, invoices and purchase orders;
• proof of what the payment was supposed to purchase;
• emails, SMS messages and messaging-app conversations;
• the scammer’s telephone numbers and email addresses;
• website addresses and social-media profiles;
• advertisements or representations that induced the payment;
• requests for additional payments;
• evidence that the recipient admitted receiving the money;
• requests asking the recipient to refund it;
• the recipient’s refusal or failure to repay;
• bank complaint or recall references; and
• police, Public Security or regulatory report references.

For a mistaken transfer, the evidence should show why there was no underlying debt or obligation requiring you to pay the recipient.

For a scam, the evidence should also show what was represented to you before you transferred the funds.

Can You Sue to Recover Money Paid by Mistake in Saudi Arabia?

Yes, a civil claim may become necessary where voluntary repayment and bank recovery do not succeed and there is a legal basis for restitution.

Saudi Arabia’s Ministry of Justice provides an electronic Statement of Claim service through Najiz. The claimant enters information about the parties and the dispute, selects the relevant case classification and uploads supporting documents. The competent court depends on the legal nature of the dispute and the parties involved.

The legal basis may differ between cases.

A mistaken transfer can involve the Civil Transactions Law rules on receiving a payment that was not due or unjust enrichment. A scam can involve both criminal allegations and a separate claim seeking recovery of the victim’s money. A failed purchase or business transaction may instead involve contractual rights.

The claimant should therefore identify why the defendant has no lawful right to retain the funds, rather than relying only on the bank statement showing that money changed hands.

What if You Do Not Know Who Received the Money?

Identification can become a major practical issue in fraud cases.

In a simple mistaken-transfer case, the payment provider’s recovery process should be used first. Where its efforts fail, the payment rules contemplate providing available relevant information following a written request so that the payer can pursue recovery.

Fraud cases can be more complicated because the name attached to an account, telephone number or online profile may not identify the person who ultimately controlled the scheme.

Reporting the fraud promptly can therefore matter for investigation and tracing purposes. Victims should provide complete account, communication and transaction information rather than trying to identify the fraudster independently from unreliable online information.

What Happens After You Win a Money Recovery Case?

Obtaining a judgment and actually receiving the money are separate stages.

Once a creditor holds an enforceable judgment or another qualifying enforcement document, Saudi Arabia’s enforcement process can be initiated through Najiz. The Ministry of Justice’s electronic service allows an enforcement applicant to submit financial enforcement requests together with the relevant execution document.

This is why a recovery strategy should consider enforceability from the beginning. Identifying the recipient, documenting the payment and preserving evidence can affect both the lawsuit and the later collection stage.

Is a Mistaken Payment the Same as an Unpaid Debt?

No. An unpaid debt usually starts with a valid obligation: one party owes money under a loan, invoice, contract, cheque or another legal relationship and fails to pay.

A mistaken-payment claim often starts from the opposite position. The claimant argues that the recipient had no legal entitlement to receive or retain the money.

The evidence and legal basis therefore differ even though both cases ultimately seek payment from another person.

Read also: Debt Collection in Saudi Arabia: A Guide for Individuals and Businesses

How Can a Lawyer Help Recover Money Paid by Mistake or Lost to a Scam?

The first legal task is usually to classify what happened.

AHYSP can assist individuals and businesses in Saudi Arabia with reviewing the transaction and available evidence, identifying the appropriate civil recovery basis, preparing repayment demands, coordinating the litigation strategy, filing or managing proceedings where appropriate, and pursuing enforcement after an enforceable decision has been obtained.

Where fraud is suspected, legal counsel can also help organize the evidence and distinguish the criminal-reporting process from the separate objective of recovering the funds.

Read also: AHYSP Cybercrime Services

For foreign individuals or companies, counsel may also assess representation options where the claimant cannot manage the Saudi proceedings personally.

Conclusion

Money sent to the wrong beneficiary, money taken through an unauthorised transaction and money voluntarily transferred after deception require different legal approaches in Saudi Arabia.

The practical sequence usually begins with rapid contact with the bank or payment provider and preservation of evidence. A suspected scam may also require a fraud report, while a recipient who has no lawful basis for retaining an accidental payment may face a civil recovery claim under the Civil Transactions Law.

If voluntary repayment does not occur, AHYSP can assess the transaction, identify the appropriate recovery route, represent the claimant in Saudi proceedings where required and assist with the enforcement stage after an enforceable decision is obtained.

For customized legal consultation, please contact us at info@ahysp.com.

The post Recover Money After a Scam or Mistaken Transfer in Saudi Arabia appeared first on AHYSP Law Firm.

Money can become overdue in many different situations. A company may be waiting for payment of an invoice, while an individual may be trying to recover a personal loan, a refundable deposit, the price of an item sold to another person or an amount acknowledged through written messages. This guide explains debt collection in Saudi Arabia for individuals, Saudi businesses and foreign creditors. It covers amicable demands, documented settlements, court claims, Najiz applications, enforcement instruments, bounced cheques, promissory notes and debtor insolvency.

The legal route does not depend only on who is owed the money. It also depends on why the money is owed, what evidence exists and whether the debtor admits or disputes the obligation. A commercial invoice dispute and a private loan between two individuals may therefore proceed before different judicial circuits, even though both ultimately concern unpaid money.

The Ministry of Justice allows claims to be filed electronically before the appropriate Saudi court, including General, Civil and Commercial Courts. Where the creditor already holds a recognised enforcement instrument, an application may instead be submitted to the Enforcement Court through Najiz.

What Is Debt Collection in Saudi Arabia?

Debt collection in Saudi Arabia is the lawful process of recovering an overdue payment through documented negotiation, settlement, court proceedings or compulsory enforcement. The correct route depends on the debt evidence: enforceable instruments can go directly to the Enforcement Court, while contested or unsupported claims generally require a judgment first.

The process covers commercial invoices, contractual payments, construction claims, professional fees, loans, guarantees, cheques, promissory notes, settlement instalments and other financial obligations.

Not every overdue account should follow the same procedure. A creditor holding a qualifying promissory note has a different position from a supplier relying only on invoices that the customer disputes.

Can an Individual Recover Money Owed by Another Person in Saudi Arabia?

Yes. Saudi debt recovery procedures are not limited to companies, banks or commercial suppliers. An individual may seek repayment where another person owes money under a legally supportable obligation.

Personal debt claims may arise from:

• money lent to a friend, relative or another individual;
• the unpaid price of an item sold privately;
• an advance payment or refundable deposit;
• a cheque or promissory note;
• an amount admitted in a signed document;
• a settlement that the debtor failed to respect; or
• a final judgment ordering another person to pay.

The creditor should first collect evidence showing both that money was transferred or became due and why the debtor must repay it. Relevant evidence may include a written loan agreement, bank transfer records, signed receipts, messages, emails, payment promises, partial repayments, cheques and acknowledgments of debt.

A bank transfer may show that funds moved from one person to another, but the surrounding evidence may still be needed to establish whether the transfer represented a loan, payment, gift, deposit or another arrangement.

The next step depends on the documents available.

If the individual already holds a judgment, qualifying cheque, promissory note, attested document, authorised settlement or acknowledged private document, direct enforcement may be available. The Ministry of Justice identifies these categories among the instruments that Enforcement Courts may enforce.

If the debtor denies the obligation and the creditor does not hold an enforcement instrument, the creditor will usually need to bring a claim before the competent court and obtain a judgment before compulsory enforcement can begin. The competent court depends on the nature of the underlying relationship and should not automatically be described as the Commercial Court merely because the dispute concerns money.

What if the personal loan was agreed only through messages?

An unsigned paper contract is not necessarily the only possible evidence of a debt. Messages, emails, transfer records, admissions and partial repayments may help establish the parties’ arrangement.

However, the evidence should be preserved in its original form. The creditor should retain complete conversations, dates, account information, attachments and payment records rather than relying only on isolated screenshots.

Where the debtor admits the debt, the parties may also consider recording the amount and repayment terms in a formal acknowledgment or enforceable settlement.

What Legal Routes Are Available for Debt Recovery in Saudi Arabia?

A creditor generally has three possible routes for recovering money in Saudi Arabia. These routes may be available to businesses pursuing unpaid invoices and to individuals seeking repayment of a personal loan, deposit, sale price or another amount owed.

The appropriate route depends mainly on the available documents, whether the debtor admits or disputes the obligation and whether the creditor already holds a legally recognised enforcement instrument.

Amicable collection and documented settlement

The creditor may start with a structured payment demand supported by the available evidence. For a business debt, this may include the contract, invoices, delivery records and a statement of account. For a personal debt, it may include a loan agreement, bank transfer, receipt, written messages or acknowledgment of the amount owed.

The demand should identify the amount claimed, the legal or contractual basis of the debt, the payment history and a clear deadline.

Negotiation can produce a payment plan, settlement agreement, guarantee or formal acknowledgment of debt. The parties should document the debtor’s admission carefully. The Ministry of Justice also provides electronic acknowledgment and conciliation services, while authorised settlement documents may qualify for enforcement under Saudi law.

A creditor should avoid accepting vague statements such as “payment will be made soon.” A useful acknowledgment identifies the parties, principal amount, due dates, instalments, consequences of default and, where a company is involved, the authority of the signatory.

Direct application to the Enforcement Court

A creditor may pursue direct enforcement when the creditor already holds a legally recognised enforcement instrument. This route may be available to an individual or a business and avoids the need to obtain a fresh judgment on the underlying debt.

The Enforcement Court may still review the document and consider any enforcement objection raised by the debtor.

The Ministry of Justice identifies enforceable instruments that include:

• Saudi court judgments, decisions and orders;
• enforceable arbitral awards;
• authorised conciliation agreements;
• negotiable instruments, including qualifying cheques and promissory notes;
• attested contracts and official documents;
• qualifying foreign judgments, orders, awards and attested documents;
• private documents whose contents the debtor wholly or partly acknowledges; and
• other documents granted enforceable status under Saudi law.

The creditor may submit the enforcement instrument electronically through Najiz using the Ministry of Justice’s enforcement application service.

Court proceedings before enforcement

A creditor normally needs a judgment when the debtor disputes the obligation, contests the amount, denies receiving the money or challenges the document relied upon.

In a business dispute, the debtor may challenge the contract, delivery of goods, completion of services or accuracy of the invoices. In a personal debt claim, the debtor may argue that the transferred money was a gift, that repayment was not agreed or that the amount has already been paid.

See also: Breach of Contract: Legal Remedies in Saudi Arabia

Commercial Courts generally hear qualifying commercial disputes between merchants and companies. Personal debt claims between individuals may instead fall within the jurisdiction of the competent General or Civil Court, depending on the nature of the claim.

The claimant can file a statement of claim through Najiz, provide the parties’ details, select the appropriate case category and upload the supporting documents. Saudi electronic litigation services also support digital pleadings, memoranda, document submission, virtual sessions and appeals.

After obtaining an enforceable judgment, the creditor can begin the separate enforcement stage.

Can an Unpaid Invoice Go Directly to the Enforcement Court?

An invoice does not automatically provide direct access to compulsory enforcement.

The answer depends on the wider documentary record. A signed and accepted invoice, a confirmed statement of account, an authenticated electronic acknowledgment or another document clearly admitting the obligation may place the creditor in a stronger position than an invoice issued unilaterally.

Where the debtor denies the debt, disputes performance or challenges the amount, the Commercial Court may first need to establish liability.

This distinction should drive the entire recovery strategy:

1. Admitted and enforceable debt: consider direct enforcement.
2. Clear debt without an enforcement instrument: consider obtaining a documented acknowledgment or settlement.
3. Contested debt: prepare a court claim.
4. Debt subject to arbitration: follow the agreed arbitration mechanism unless a legally recognised exception applies.
5. Insolvent debtor: assess the Bankruptcy Law before continuing ordinary collection.

See also: Commercial Litigation Lawyers in Saudi Arabia

What Documents Should a Creditor Prepare?

A strong debt file should explain who owes the money, why the amount became payable and how the creditor calculated the claim.

Depending on the transaction, the creditor should collect:

• written contracts, loan agreements and amendments;
• signed receipts or acknowledgments of debt;
• bank transfers and payment records;
• invoices and account statements;
• purchase orders, quotations and delivery records;
• cheques, promissory notes and guarantees;
• emails, text messages and platform communications;
• payment promises and requests for additional time;
• evidence of partial repayments;
• settlement agreements and instalment plans;
• identification or corporate documents for the parties;
• judgments, arbitral awards or other enforcement instruments;
• an appropriate power of attorney; and
• certified Arabic translations where required.

An individual creditor should not assume that a bank transfer alone proves the existence of a loan. The surrounding communications, repayment promises and conduct of the parties may help establish the legal purpose of the transfer.

A business creditor should connect each invoice to the relevant contract, purchase order, delivery record, completion certificate or other evidence showing that the goods or services were provided and accepted.

Saudi evidentiary rules recognise written and digital evidence. Creditors should therefore preserve original electronic records, complete message histories, metadata, attachments and access information rather than relying only on isolated screenshots or copies inserted into presentations or spreadsheets.

The creditor should also reconcile the amount claimed carefully. The calculation should separate the principal debt, payments received, credit notes, disputed items and any additional contractual claims. A creditor should not automatically add interest, collection fees, penalties or other charges without first reviewing whether they are enforceable under Saudi law.

Can a Creditor Claim Interest or Late Payment Penalties?

Generally not on a monetary debt. Saudi law does not permit the recovery of interest. Under the Civil Transactions Law, in force since 16 December 2023, parties may agree compensation in advance for most obligations, but not for the late payment of money, because such compensation operates as interest.

A contractual clause adding a monthly percentage to an unpaid balance may therefore be unenforceable, even where the rest of the contract stands. Saudi courts have severed delay penalties from otherwise enforceable awards on public policy grounds.

This does not leave the creditor without a remedy. Compensation for actual, direct and proven harm caused by a breach remains available, and agreed damages remain valid for non-payment obligations such as late delivery or defective performance.

The drafting point is simple. Frame the remedy as compensation tied to quantifiable loss, not as a percentage accruing on the outstanding sum.

How Can You Recover Money Owed in Saudi Arabia

1. Identify the debtor and the basis of the debt

Confirm the debtor’s full legal identity and the reason the money became payable.

For an individual claim, determine whether the obligation arose from a loan, sale, deposit, cheque, settlement or another arrangement. For a company claim, verify the contracting entity rather than relying only on a trade name, employee or related company.

2. Preserve the available evidence

Collect the agreements, transfers, receipts, messages, invoices, cheques and payment promises connected with the claim.

Keep electronic records in their original form wherever possible. Do not edit messages, delete parts of conversations or rely only on cropped screenshots.

3. Determine whether you already hold an enforcement instrument

Review whether the debt appears in a judgment, qualifying cheque, promissory note, attested document, authorised settlement or acknowledged private document.

An enforceable document may permit a direct Najiz enforcement application. A disputed debt without such a document may require a court judgment first.

4. Send a formal payment demand

The demand should explain:

• who owes the money;
• why the amount is due;
• the principal amount claimed;
• any payments already received;
• the documents supporting the claim;
• the deadline for payment; and
• how the debtor can respond or propose settlement.

The language should remain factual. A creditor should avoid harassment, public accusations or misleading threats of criminal proceedings.

5. Document any repayment agreement

If the debtor requests more time, record the arrangement properly.

The agreement should confirm the outstanding amount, repayment dates, payment method and consequences of missed instalments. A vague promise to pay later may leave the creditor facing the same evidentiary dispute after another default.

6. File before the correct court or enforcement authority

Submit an enforcement application where a recognised enforcement instrument exists.

Where liability remains disputed, file a claim before the competent court. The correct forum may depend on whether the debt arises from a commercial transaction, private civil arrangement, employment relationship, financing agreement or another specialised matter.

7. Enforce the judgment or other instrument

After obtaining or submitting an enforcement instrument, the creditor may request compulsory enforcement through the Ministry of Justice process.

The Enforcement Court conducts and supervises compulsory enforcement and considers enforcement disputes. The measures available depend on the enforceable document, the debtor’s position, the assets involved and any legally recognised objection.

What Happens If a Debtor Refuses to Pay?

A refusal to respond does not remove the debt, but it changes the creditor’s priorities.

The creditor should stop relying on repeated informal reminders and secure the available evidence. It should then file the correct claim or enforcement application before documents disappear, employees leave or the debtor’s financial position deteriorates.

Once an enforcement application proceeds, the Enforcement Court can supervise compulsory enforcement in accordance with the Enforcement Law. The court, rather than the creditor or collection agency, controls coercive measures against attachable assets.

Creditors should not use threats, public exposure, repeated contact with unrelated third parties or misleading statements about criminal liability. Aggressive communications may create separate legal, regulatory, privacy or reputational risks.

How Are Bounced Cheques and Promissory Notes Recovered?

Cheques and promissory notes can provide stronger recovery options because Saudi enforcement rules recognise negotiable instruments as enforcement instruments. The Commercial Papers Law governs the required characteristics and procedures associated with cheques, bills of exchange and promissory notes.

Before filing, the creditor should verify:

• whether the instrument contains the legally required information;
• whether the amount and maturity are clear;
• whether the original or approved electronic instrument is available;
• whether the debtor has raised forgery, authority or payment objections; and
• whether any applicable presentation or procedural period affects the claim.

A bounced cheque case should not be treated as a normal unpaid invoice without reviewing the instrument itself and the bank’s return documentation.

See also: How Promissory Notes Are Regulated and Enforced in Saudi Arabia

Can a Foreign Company Recover Debt in Saudi Arabia?

A foreign supplier, service provider or investor may pursue a Saudi debtor through the Saudi legal system. The creditor does not necessarily need to establish a Saudi subsidiary merely to bring a claim, although representation, authentication, translation and procedural requirements must be satisfied.

Foreign creditors should prepare:

• constitutional documents proving the company’s existence;
• evidence of the representative’s authority;
• a valid power of attorney for Saudi proceedings;
• certified Arabic translations;
• the contract and transaction documents; and
• complete identification details for the Saudi debtor.

Saudi Enforcement Courts may enforce qualifying foreign judgments, judicial orders, arbitral awards and attested documents, subject to the applicable statutory conditions. An arbitral award must also complete the Saudi enforcement process before compulsory measures begin.

Foreign businesses should assess enforceability before starting proceedings abroad. A favourable judgment in another jurisdiction does not remove the need to satisfy Saudi recognition and enforcement requirements.

What If the Debtor Is Insolvent or in Bankruptcy?

Once a formal bankruptcy procedure begins, the creditor may need to shift from individual enforcement to the claims process applicable to that procedure.

Saudi Arabia’s Bankruptcy Law provides several procedures for different financial situations, including protective settlement, financial restructuring and liquidation mechanisms. The Bankruptcy Commission publishes procedure announcements and provides services through which creditors may submit certain claims.

The creditor should promptly determine:

• which procedure has commenced;
• the deadline and method for submitting claims;
• whether the claim is secured or unsecured;
• whether retention of title, a pledge or guarantee exists;
• whether litigation or enforcement may continue; and
• whether the debtor or officeholder disputes the claim.

A creditor that ignores a bankruptcy announcement may lose practical influence over distributions or restructuring terms, even where the underlying debt remains valid.

See also: What You Should Know About Arbitration Agreements in Saudi Arabia

Do SAMA Debt Collection Rules Apply to Every Debt?

No. Businesses should not treat the Saudi Central Bank’s consumer debt collection rules as a general code for every commercial receivable.

SAMA’s Debt Collection Regulations and Procedures apply to supervised banks and finance companies, as well as third parties carrying out collection for them, in relation to consumer finance obligations. They regulate matters such as documented communication, privacy, complaints and contact practices.

An unpaid B2B invoice between a supplier and a corporate customer requires a separate analysis under the contract, commercial procedure, evidence and enforcement rules.

This distinction matters because several online debt collection guides combine consumer banking debt and commercial trade debt without explaining that different regulatory frameworks may apply.

How Long Does Debt Recovery Take in Saudi Arabia?

Saudi law does not produce one reliable timetable for every unpaid debt.

As a general indication, a payment order application should be decided within about ten days, a straightforward contested claim may reach judgment in roughly three to six months, and enforcement runs as a separate stage afterwards. Complex or cross-border matters take longer.

Timing depends on:

• whether the debtor admits or disputes liability;
• whether the creditor already holds an enforcement instrument;
• the quality of the documents;
• service and notification;
• jurisdictional or arbitration objections;
• the need for expert evidence;
• appeals and enforcement disputes;
• the debtor’s available assets; and
• any bankruptcy procedure.

A directly enforceable instrument may remove the litigation stage, but it does not guarantee immediate payment. Conversely, a negotiated settlement may resolve a claim efficiently when the debtor remains solvent and the settlement creates a credible enforcement position.

Any fixed recovery promise made before reviewing the documents and debtor status should be treated cautiously.

What Does a Debt Collection Lawyer in Saudi Arabia Do?

A Saudi debt recovery lawyer should provide more than payment reminders. The lawyer’s role may include:

• verifying the contracting party and signatory authority;
• reviewing evidence and calculating the legally supportable claim;
• determining whether direct enforcement is available;
• drafting a formal demand;
• negotiating and documenting an enforceable settlement;
• filing a Commercial Court claim or arbitration;
• submitting and managing a Najiz enforcement application;
• responding to debtor objections;
• coordinating Arabic translations and foreign corporate documents;
• reviewing guarantees, collateral and security rights; and
• registering or defending the claim in bankruptcy proceedings.

For individuals and international businesses, local counsel can also coordinate between overseas management, finance teams, witnesses and Saudi judicial requirements.

See also: Litigation — AHYSP Law Firm

Conclusion

Debt collection in Saudi Arabia is not limited to unpaid business invoices. Individuals may also seek recovery of personal loans, deposits, sale proceeds, cheques, acknowledged debts and amounts awarded by a court.

In every case, the creditor should identify the legal basis of the debt, preserve the evidence and determine whether direct enforcement is possible or a court judgment is required. Commercial claims, private civil debts and regulated financial obligations may follow different procedures, so choosing the correct forum remains essential.

Hamad in Association with Youssry Saleh & Partners assists individuals, Saudi companies and international creditors with debt assessments, formal demands, negotiated settlements, court claims and enforcement applications. Our team can review the available documents and identify the legal route appropriate to the circumstances of the debt.

For customized legal consultation, please contact us at info@ahysp.com.

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The post Debt Collection in Saudi Arabia: A Guide for Individuals and Businesses appeared first on AHYSP Law Firm.

Introduction

Oil and gas matter more to Saudi Arabia than almost any other industry, yet the rules around investing in the sector are often misread. Many people assume it is either fully closed or fully open. It is neither. Saudi law and policy keep the resource itself under state control, while the wider chain of activities built around it, from refining and petrochemicals to infrastructure and services, is increasingly accessible to private and foreign participation.

Vision 2030 has made that opening more deliberate. The opportunity now reaches Saudi companies, regional groups, specialist contractors, technology providers, and international investors looking to enter the Kingdom’s energy value chain.

This article explains how investment in Saudi oil and gas actually works: who can own what, which activities are open, how the licensing and approval process runs, and what the tax rules look like. It covers the main routes into the sector, the authorities involved, and the practical steps that come after the decision to invest. The aim is a clear map of the legal ground before you commit time or money to it.

Read also: Saudi Arabia’s FDI Reaches $280 Billion: What It Means for Foreign Investors in 2026

Who Controls Oil and Gas in Saudi Arabia?

Hydrocarbons are a sovereign asset in the Kingdom, not a freely tradable commodity for private ownership. The Ministry of Energy sets national energy policy, and Saudi Aramco holds an exclusive concession over the exploration and production of the country’s reserves. That concession is the reason a foreign company cannot simply buy an oil field or drill its own well, no matter how much capital it brings.

This structure predates Vision 2030 and has survived every reform since. What has changed is the space around the core: the Kingdom now actively courts foreign expertise and money in the parts of the industry that build value on top of the raw resource. Understanding where that line falls is the first thing any investor needs to get right.

Can a Foreigner Own Upstream Oil and Gas Assets in Saudi Arabia?

No. Under the Investment Law (Royal Decree No. M/19 of 1446H), in force from February 2025, foreign investment is open across almost every sector except a defined list of excluded activities maintained by MISA together with the competent authorities. Oil and gas exploration, drilling, and production appear on that list, which places upstream ownership outside the reach of foreign investors.

Excluded activities, in Saudi investment law, are the specific sectors on a published list where foreign ownership is either prohibited or restricted. Under the Investment Law (M/19), an investor may apply to MISA for approval in a restricted activity, but prohibited activities such as upstream oil production remain closed to foreign capital.

The Investment Law replaced the old Foreign Investment Law and shifted the whole system from a licence-based model to a unified MISA registration. It also treats local and foreign investors equally in principle. The upstream carve-out is the notable exception to that equal treatment, and it reflects a policy choice about strategic resources rather than a technical hurdle that clever structuring can dissolve.

A word of caution here. Some older guides still describe entry through a “SAGIA licence” or the repealed Foreign Investment Law. That framework is gone. Any advice you rely on should be measured against M/19 and its Implementing Regulations, issued by Ministerial Decision No. 1086 dated 7 February 2025.

Five Practical Routes Into Saudi Oil and Gas

Since upstream ownership is closed, the useful question becomes how to take part in everything around it. Five routes account for most foreign entry, and each carries its own approval logic.

Routes 1: Buying Listed Shares (Public Equities)

The one route that sits outside the MISA registration system is the purchase of listed securities. Foreign investors buying shares on the Saudi Exchange (Tadawul) do so under the Capital Market Authority’s qualified foreign investor framework, opened in 2015, rather than through a MISA registration. Aramco has been publicly traded since its 2019 listing, so exposure to the sector is available through listed equity and related instruments. This is portfolio participation, not operational entry: it confers no right to operate, license, or manage any asset.

Routes 2: Joint Ventures With Aramco or SABIC

MISA facilitates foreign direct investment through joint ventures with Saudi entities. Across the midstream and downstream segments, ventures with Aramco or SABIC, the Kingdom’s petrochemical champion, offer a structured way into refining, petrochemical integration, and gas processing. The foreign partner usually contributes technology, capital, or offtake, while the Saudi entity holds the regulated position. Governance, funding, and licensing responsibility should be pinned down in the shareholders’ agreement before anyone signs, because renegotiating those terms after the fact is far harder.

Routes 3: Oilfield Services and the IKTVA Program

Aramco’s In-Kingdom Total Value Add (IKTVA) program drives rising local content across its supply chain, which gives foreign service companies a concrete reason to set up inside the Kingdom rather than serve it from abroad. Demand concentrates in drilling technology, reservoir engineering, digital oilfield solutions, and equipment manufacturing. Entry runs through MISA registration plus Aramco contractor prequalification, so a firm can be fully licensed and still be unable to bid until it clears the prequalification gate.

Read also: Anti-Bribery & Corruption in Saudi Arabia: Compliance Risks and Strategic Considerations for Companies and Investors

Routes 4: Unconventional Gas and the Jafurah Field

The Jafurah basin is the Kingdom’s largest unconventional gas development, holding an estimated 229 trillion standard cubic feet of raw gas, with Aramco’s lifecycle investment expected to exceed USD 100 billion. Foreign participation is already visible in its infrastructure. In 2025, a consortium led by Global Infrastructure Partners, part of BlackRock, entered an USD 11 billion lease-and-leaseback arrangement over Jafurah’s midstream gas facilities. For contractors and technology providers, the field’s build-out creates sustained demand across processing, fractionation, and downstream gas use. Note the structural point that runs through this whole sector: foreign capital went into the infrastructure and service layers, not into the reservoir itself.

Routes 5: Downstream and Refining

Saudi Arabia operates some of the world’s largest refining complexes, including Ras Tanura and SATORP, the Aramco and TotalEnergies joint venture. Opportunities cluster around refinery upgrades, integration with petrochemicals, and cleaner-fuel production. These downstream activities are generally open to significant or full foreign ownership, subject to MISA registration and the relevant Ministry of Energy and technical approvals.

How to License an Oil and Gas Investment: The Approval Chain

Getting into the permitted parts of the sector runs through several gates, not one. Treating MISA registration as the finish line is a frequent and costly misunderstanding.

First, MISA registration. Every foreign investor must register with the Ministry of Investment before doing business. MISA assesses the activity, the investor’s track record, and alignment with national energy objectives. Approval is not a formality; incomplete files and mismatched activity codes cause most of the delays applicants experience.

Read also: Company Incorporation Services in Saudi Arabia

Second, commercial registration with the Ministry of Commerce. Once MISA clears the investor, the company is incorporated under the Companies Law (Royal Decree No. M/132 of 1443H), effective 19 January 2023, typically as a limited liability company or, for larger ventures, a joint stock company. Each form carries its own capital and governance requirements.

Third, sectoral approvals. Energy activities often need clearance from the Ministry of Energy, plus safety, environmental, and technical standards administered by the relevant bodies. Certain minimum capital thresholds apply to energy and industrial licences, and these can be substantial.

Fourth, if you plan to work for Aramco, prequalification. As Route 3 shows, Saudi Aramco maintains a vetted list of approved contractors. A firm not on that list generally cannot bid for its projects, so contractor prequalification is effectively a separate licensing regime layered on top of the government’s own.

Read also: New Phase of the Nitaqat Saudization Program (2026–2028): What Businesses in Saudi Arabia Need to Know

Does clearing all four gates guarantee smooth operation? Not on its own. Ongoing compliance, Saudization targets under the Labor Law (Royal Decree No. M/51 of 1426H, as amended in 2024/2025), and Arabic-language documentation obligations continue for the life of the business.

The Tax Angle Investors Often Miss

Saudi Arabia’s tax regime holds a surprise for oil and gas specifically. The headline numbers most investors know are the 20% corporate income tax on the foreign-owned share, 2.5% Zakat on the Saudi or GCC-owned share, and 15% VAT, all administered by ZATCA under the Income Tax Law (Royal Decree No. M/1 of 1425H). There is no personal income tax on salaries.

Companies engaged in the production of oil and hydrocarbons, however, sit under a special rate band that runs materially higher than the standard 20%, scaling with the level of capital invested. This regime targets extraction-linked income. A downstream refiner or a services contractor is usually taxed under the ordinary corporate framework, but the distinction turns on the precise activity and can be subject to interpretation. Confirm the classification of your specific venture before modelling any obligations, as the gap between the two regimes is large.

None of the above is tax planning advice. It is a compliance context, and the exact treatment of any project should be verified with ZATCA and qualified counsel.

Legal Support for Oil and Gas Investment in Saudi Arabia

Our Corporate & Energy team works with international investors from the first structuring question through to live operations. Typical support includes:

• Route mapping: assessing which activities are open, restricted, or closed, and identifying the right entry route for your business model.
• Approvals strategy: clarifying whether you need MISA registration, Ministry of Energy licensing, sector clearances, or a combination, and in what order.
• Company formation: preparing and reviewing incorporation and foreign-shareholder documents under the Companies Law.
• Ownership and joint ventures: advising on ownership structures and negotiating shareholders’ and joint venture terms.
• Commercial contracts: drafting service, supply, EPC, distribution, and subcontracting agreements.
• Ongoing compliance: supporting readiness for regulated petroleum and petrochemical operations, plus licence renewals, amendments, and regulatory correspondence.

Planning Your Entry

Saudi Arabia’s oil and gas sector is open, but selectively. The upstream stays sovereign and closed to foreign ownership, a red line unlikely to move. Everything around it, from listed equity and petrochemical joint ventures to oilfield services, Jafurah gas infrastructure, and refining, is where foreign capital and technology are genuinely wanted, and where the Investment Law’s equal-treatment principle applies. Success depends less on the strength of the opportunity than on choosing the correct route, sequencing the MISA, Ministry of Commerce, and Ministry of Energy approvals, and confirming which tax regime governs the activity before committing.

Entering this sector rewards preparation and punishes assumption. If you are weighing a downstream, midstream, gas, or services venture in the Kingdom, mapping the right route and its approval chain early can save months of licensing friction and prevent a costly misclassification of your activity or tax position. Our team advises international investors on exactly these questions, from selecting the entry route to securing the full chain of approvals.

For customized legal consultation, please contact us at info@ahysp.com.

The post Investment in Saudi Arabia’s Oil & Gas Sector: Licensing, Ownership Rules, and Regulatory Approvals appeared first on AHYSP Law Firm.

Mergers and acquisitions in Saudi Arabia are open to foreign investors, but they are not a one-step process. A foreign buyer can acquire shares or assets in a private company, or pursue a listed target, provided the activity is open to foreign investment. Deals require MISA registration, Ministry of Commerce filings, GAC clearance where thresholds are met, and CMA approval for listed targets.

Introduction

A few years ago, buying into a Saudi company meant working around a foreign investment regime built for caution. That has shifted. Under Vision 2030, the Kingdom has rebuilt its corporate, investment and competition rules to attract exactly the kind of cross-border deals that were once difficult to close. For an international acquirer, the opportunity is real, but so is the regulatory map. Getting the structure and the approvals right at the outset is what separates a clean deal from a stalled one.

This guide walks through how M&A actually works in Saudi Arabia today: the governing laws, the choice between a share and an asset deal, the regulators whose sign-off you need, and the traps that catch foreign counsel who assume the process mirrors their home market.

Read also: Saudi Arabia’s FDI Reaches $280 Billion: What It Means for Foreign Investors in 2026

A quick definition for readers new to the market

In Saudi law, a merger or acquisition covers any transaction that transfers ownership or control of a business, whether through buying shares, buying assets, combining two companies into one, or forming a new entity from both. Competition regulators describe the same idea as an “economic concentration”: a lasting change of control over a target. That control test, not just the label on the deal, decides which rules apply.

What laws govern mergers and acquisitions in Saudi Arabia?

No single “M&A code” governs deals here. Several instruments work together.

The Companies Law (Royal Decree No. M/132 of 1443H), effective 19 January 2023, sets the corporate mechanics: how a company is bought, how shareholders vote on a merger, and how directors must act. It introduced the Simplified Joint Stock Company (SJSC), a flexible vehicle that acquirers increasingly use as a holding or bid entity.

The Investment Law (Royal Decree No. M/19 of 1446H), in force from February 2025 and administered by MISA (the Ministry of Investment of Saudi Arabia), governs the foreign investor’s right to hold the target. It treats local and foreign investors equally and replaces the old foreign investment license with a unified MISA registration, restricting foreign participation only in a defined list of “excluded activities.”

On top of these sit the Competition Law, enforced by the General Authority for Competition (GAC), and, for listed companies, the Merger and Acquisition Regulations issued by the Capital Market Authority (CMA). Where the bidder is listed and issues shares as consideration, the Rules on the Offer of Securities and Continuing Obligations also apply. Tax and labour rules round out the picture.

Share deal or asset deal: which structure fits?

Most private M&A in the Kingdom is structured as a share purchase, and for practical reasons. Share deals offer simplicity and business continuity, avoiding the need to obtain or amend the target’s operating permits and licences, transfer employee sponsorships, or renegotiate employment contracts. The trade-off is inheritance: in a share purchase the buyer takes on the target’s liabilities along with its business.

An asset purchase flips that calculus. Its main advantage is that the buyer can choose which assets and liabilities to acquire, leaving unwanted exposure behind. The cost is administrative friction, because licences, contracts and staff often have to move across individually.

Read also: Earn-Outs in Saudi Arabia: Structuring Price, Performance and Post-Closing Risk

One point that reassures many first-time buyers: there are currently no transfer taxes on either share deals or asset deals in Saudi Arabia. Tax still matters at the entity level, though. Saudi Arabia applies Zakat at 2.5% to the Saudi and GCC-owned share of a company and corporate income tax at 20% to the foreign-owned share, with VAT at 15% and no personal income tax on salaries. Treat these as compliance context, not a plan; the right structure depends on facts a tax adviser needs to see.

Which regulators must approve a Saudi M&A deal?

Think of approvals as a sequence, not a single gate.

MISA comes first for a foreign buyer: the acquirer needs an active MISA registration to hold the interest, unless the target’s activity sits on the excluded list. The Ministry of Commerce (MoC) then handles the corporate filings, including any amendments to the target’s or bidder’s bylaws. The GAC reviews the deal for competition effects where the financial thresholds are met. And for a listed target, the CMA is the principal gatekeeper.

A common mistake is assuming these run in parallel and finish together. In practice, the CMA usually grants its approval only once the other regulatory approvals are in hand, so sequencing drives your timeline.

When does a deal need competition clearance from the GAC?

This is where foreign-to-foreign acquirers are most often caught off guard. A Saudi filing can be triggered even when the target has no Saudi subsidiary, because turnover, not local presence alone, sets the test.

Under the GAC’s current guidelines, an acquisition is notifiable only where all three financial thresholds are met: combined worldwide turnover of the parties exceeding SAR 200 million; the target’s global turnover exceeding SAR 40 million; and combined turnover generated in Saudi Arabia exceeding SAR 40 million. The 2025 Guidelines, issued in the fifth edition, now explicitly require the target to contribute to local Saudi revenue for an acquisition to be caught, which narrows the net for genuinely foreign deals.

Read also: Competition Law in Saudi Arabia: Compliance, Mergers, and Penalties

Timing is generous but not trivial. The statutory review period runs 90 calendar days and may be extended by a further 45. A GAC clearance is valid for one year, and a transaction not completed within that window requires re-application. The regulator is active: the GAC reviewed 406 applications in 2025 and issued a record 271 No Objection Certificates, so filings here are routine, not exceptional.

How does acquiring a listed Saudi company work?

Public deals live under the CMA’s Merger and Acquisition Regulations, and the thresholds are precise. The Regulations apply to any purchase or sale of voting shares in a listed company that results in ownership or control of 10% or more. Cross a higher line and a duty to the wider market kicks in: if an acquisition results in ownership or control of 50% or more of the voting rights, the CMA has the authority to require the acquirer to offer to buy the remaining shares, protecting minority holders.

Two features tend to surprise newcomers. Both the offeror and the target must appoint an independent legal adviser authorised to practise law in Saudi Arabia and an independent financial adviser, and the financial adviser acts as the channel to the CMA. On price, the offer must match the highest price the bidder or its concert paid for target shares in the three months before announcing a firm intention to bid.

Market practice matters as much as the rulebook. Saudi public M&A strongly favours negotiated, board-supported structures, and the most common route to date has been a statutory merger by way of a share-for-share exchange, following CMA approval and the extraordinary general assemblies of both companies. Landmark combinations such as the SABB and Alawwal Bank merger and the NCB and Samba tie-up followed this model. Hostile bids, by contrast, have not featured in the market.

Access to listed shares has also just widened. On 6 January 2026 the CMA amended its rules to remove the QFI regime and discontinue the swap-agreement framework, opening Saudi-listed shares to direct investment by all foreign investors from 1 February 2026, subject to foreign-ownership limits and sectoral restrictions.

Common M&A mistakes foreign investors make in Saudi Arabia

Most stalled or unwound deals in the Kingdom trace back to the same handful of assumptions. Three come up again and again in practice:

• Assuming control means majority ownership. The GAC judges control by substance, not shareholding. It now expressly recognises positive, negative, joint and de facto control, and de facto control can arise from contractual or governance rights even where the equity stake suggests otherwise. A minority position with strong veto rights can still be a notifiable deal.
• Closing before competition clearance. The GAC can investigate a transaction after closing and unwind it where a required notification was never made. Early competition analysis is worth the cost precisely because it removes that risk before money changes hands.
• Overlooking sector restrictions. Some Saudi activities remain restricted or licensed regardless of the general open-door policy. The excluded-activities list under the Investment Law, along with any sector regulator’s rules, should be checked before a term sheet is signed, not after.

Read also: Corporate Transparency & Beneficial Ownership Disclosure under Saudi AML Law: What Companies Must Know in 2026

Conclusion

Saudi Arabia has become a genuinely workable M&A market for foreign buyers, but it rewards preparation. The structure you choose shapes your liabilities; MISA registration secures your right to hold the asset; GAC clearance can be triggered by turnover alone; and any listed target pulls the whole deal into the CMA’s disciplined offer regime. None of this is insurmountable. It simply needs to be mapped early, in the right order, with local counsel who know how each regulator behaves in practice.

As of July 2026, under the law of the Kingdom of Saudi Arabia. Reviewed by the Corporate and M&A team at Hamad in Association with Youssry Saleh & Partners (AHYSP). This article is general legal information, not legal or financial advice, and specific transactions should be assessed on their own facts.

If you are weighing an acquisition or joint venture in the Kingdom, an early read on structure and clearances usually saves far more than it costs later. Our corporate team maps the MISA, GAC and CMA route for your specific deal before you commit to a term sheet, so surprises surface early rather than at closing. For customized legal consultation, please contact us at info@ahysp.com.

FAQ

The post Mergers and Acquisitions in Saudi Arabia: A Legal Guide appeared first on AHYSP Law Firm.

Saudi Arabia has introduced a dedicated regulatory framework for data center services as part of its wider development of cloud computing, artificial intelligence and digital infrastructure.

For an investor, however, a data center is not simply an information technology business. It is also a physical development that depends on land, electricity, cooling, telecommunications connectivity, safety systems and environmental controls.

The approval pathway must therefore cover three connected questions:

• Who will own and operate the Saudi business?
• Where and how will the facility be built?
• Which services will the operator sell to customers?

Answering those questions early helps the investor identify the correct authorities and avoid designing a facility around the wrong regulatory assumptions.

What does a “data center license” in Saudi Arabia actually mean?

Data center licensing in Saudi Arabia means the combined process of registering the facility with CST, establishing the operating company, securing site and municipal approvals, and complying with any separate cloud, telecom, cybersecurity and PDPL rules. The exact pathway depends on what the facility will host and sell.

The term “data center license” can be misleading because Saudi Arabia does not issue one approval that covers the entire project.

The Communications, Space and Technology Commission, or CST, operates a sector-specific registration framework for providers that offer data center services to customers. Other authorities remain responsible for investment registration, company formation, construction, safety, environmental compliance and personal data protection.

A CST registration therefore does not replace a building permit, commercial registration or cloud computing registration.

Does every data center require CST registration?

The CST Data Center Services Regulations entered into force on 1 January 2024 and apply to data center service providers operating in Saudi Arabia. CST describes the relevant beneficiaries as wholesale or retail providers that offer data center services to other parties in the Kingdom.

This distinction matters.

A company that sells colocation, hosting or other data center services to customers will generally fall within the CST framework. Colocation means that customers place their own servers or other equipment inside the operator’s facility and pay for space, power, cooling, connectivity and related support.

A facility used only to run the owner’s internal business systems may stand in a different position. The company should still confirm the position against the actual use of the facility because group arrangements, managed services or services supplied to affiliates can affect the analysis.

How do the CST registration categories work?

CST lists the following data center registration categories:

CST expressly states that the Qualifying category applies to data centers under development. It also requires a separate registration for each facility according to its classification and stage of development.

The categories should not be treated as marketing descriptions. They form part of the regulatory registration process. The investor should review the current technical criteria before finalising the design, certification strategy or customer promises.

A facility may begin in the Qualifying category while construction continues and later move into the appropriate operational category. The operator should plan that transition rather than waiting until the facility is ready to open.

Which authorities regulate a Saudi data center project?

A typical project can involve several authorities. Their roles are different, and approval from one authority does not replace approval from another.

The approval matrix can change where the project sits in a special economic zone, serves government entities, supports critical national infrastructure or includes regulated cloud, financial, health or telecommunications services.

What corporate approvals does a foreign investor need?

A foreign investor should begin with the Investment Law, issued under Royal Decree No. M/19 of 1446H, published in August 2024 and effective from February 2025. Its Implementing Regulations were issued by Ministerial Decision No. 1086 dated 7 February 2025.

The Investment Law replaced the former Foreign Investment Law and moved Saudi Arabia from the previous foreign-investment licence model to a unified MISA registration system. It also provides for equal treatment of local and foreign investors in similar circumstances, subject to restricted or prohibited activities and other applicable laws.

Read also: MISA License Explained for Foreign Investors

After completing the relevant MISA process, the investor must establish the Saudi operating entity and obtain its commercial registration under the Companies Law, issued under Royal Decree No. M/132 of 1443H and effective from 19 January 2023.

The company’s registered activities should match its real business model. A data center project may involve several distinct activities, including:

• owning and operating the physical facility;
• leasing racks or technical space;
• providing hosting services;
• managing servers or infrastructure;
• providing cloud computing;
• selling telecommunications connectivity;
• leasing equipment; and
• Offering system integration or technical support.

A broad information technology description may not cover every service that the company intends to invoice.

The corporate structure also matters. One company may own the building while another operates the data center or sells cloud services. In that case, each entity must hold the registrations and contractual rights that correspond to its actual role.

Which site and construction permits must be obtained?

Before construction begins, the project normally requires land-use confirmation and a building permit.

The Balady process allows the owner or its representative to appoint an approved engineering office, submit the required designs and apply for the building permit. After construction, the owner applies for an occupancy certificate through the same municipal system.

The investor should not sign a long-term lease or acquire land before confirming that the site can support the intended use.

Read also: Construction in KSA

Site due diligence should examine:

• permitted land use;
• electrical capacity and connection conditions;
• fiber access and route diversity;
• cooling and water requirements;
• generator and fuel-storage arrangements;
• access for construction and maintenance;
• expansion rights;
• environmental constraints;
• Civil Defense requirements; and
• The route to the occupancy and commercial licenses.

Power and connectivity require particular attention. A site may be legally available but commercially unsuitable if the required electricity capacity or diverse network connections cannot be delivered on the project timetable.

The legal team should review the lease, utility arrangements and construction contracts together. A land agreement should not require the investor to proceed where essential regulatory or utility conditions remain unavailable.

How does the CST data center registration process work?

CST provides an electronic registration service through its business portal. The applicant submits the facility information and supporting documents required for the relevant category. CST currently lists the registration service as free.

Registration is facility-specific. A registration for a Riyadh data center does not automatically cover a separate facility in Jeddah, Dammam or another location.

The information submitted to CST should match:

• the facility’s development stage;
• the technical design;
• the operator’s legal entity;
• the services offered to customers;
• the intended operational category; and
• the supporting certifications or technical evidence.

Technical certification and CST registration serve different purposes. A recognised facility certificate may support the application, but it does not replace the regulatory registration.

The investor should therefore determine the intended category during design and construction. Waiting until the building is complete can reveal gaps between the built facility and the evidence required for its intended registration.

Does data center registration cover cloud computing services?

No. Operating a data center and providing cloud computing are separate activities.

A data center operator provides the physical environment in which equipment operates. This normally includes space, power, cooling, physical security and access to connectivity.

A cloud provider supplies computing resources or software through the internet. Cloud services may include:

• infrastructure as a service, where customers obtain virtual computing, storage or network resources;
• platform as a service, where customers use a managed environment to build or run applications; and
• Software as a service, where customers access complete software applications online.

CST explains these service models separately from the physical facility layer.

Where the Saudi company sells cloud services, it must assess the separate Cloud Computing Services Provisioning Regulations and CST registration process. CST uses a qualifying route and Classes A, B and C, with different facility and operational evidence applying to the available classes.

An operator may therefore require both:

• registration for the physical data center; and
• Registration for the cloud services supplied from that facility.

The distinction depends on what the company actually promises and supplies to customers, not only on the wording used in its commercial registration.

Read also: Digital Economy in Saudi Arabia: Opportunities for Foreign Investors

When is a telecommunications license also required?

Many data centers buy connectivity from telecommunications operators that already hold the necessary CST licenses. Simply purchasing connectivity does not normally turn the data center into a telecommunications provider.

A separate question arises where the operator itself plans to establish or operate telecommunications infrastructure, resell regulated connectivity, provide public network services or supply wholesale infrastructure to other service providers.

CST maintains separate licensing frameworks for telecommunications and infrastructure services. For example, an infrastructure wholesale services license can authorize a provider to establish, own, operate and maintain telecommunications infrastructure for supply to other licensed providers.

The customer contract should describe the service accurately. Calling a regulated network service an “additional data center service” does not remove the licensing issue.

Which cybersecurity rules apply to a data center operator?

A registered data center provider should first examine CST’s Cybersecurity Regulatory Framework for service providers in the communications and information technology sector. CST states that the framework mainly concerns organizations licensed, registered or otherwise regulated by CST.

Read also: Impact of Saudi Cybersecurity Laws on Businesses

Cybersecurity compliance should form part of the project from the design stage. It can affect:

• physical and logical access;
• network separation;
• privileged accounts;
• vulnerability management;
• incident response;
• monitoring;
• backup and recovery;
• subcontractors; and
• business continuity.

The National Cybersecurity Authority’s Essential Cybersecurity Controls may also apply. They apply directly to government entities and private organizations that own, operate or host Critical National Infrastructure. The NCA encourages other organizations to use the controls as a cybersecurity benchmark.

This means that not every private data center automatically requires an NCA certification. The operator should complete an applicability assessment based on its customers, hosted systems and regulatory status.

Customer contracts should also divide security responsibilities clearly. The operator may control physical access and facility security while the customer remains responsible for its applications, user accounts and data configuration.

How does the PDPL affect data center services?

The Saudi Personal Data Protection Law, or PDPL, applies where the operator processes personal data.

A data center operator may act as a processor when it stores or manages information on a customer’s instructions. It may act as a controller for its own employee information, customer contacts, access logs, visitor records and security footage.

The contract should reflect the real relationship. Simply calling the operator a “processor” does not settle the issue if it independently decides why or how personal data will be used.

The parties should address:

• processing instructions;
• confidentiality;
• security measures;
• breach cooperation;
• subcontractors;
• data deletion;
• audit rights; and
• assistance with data-subject requests.

The PDPL does not impose one simple rule that all personal data must remain in Saudi Arabia. Instead, transfers outside the Kingdom must satisfy the PDPL and the Regulation on Personal Data Transfer Outside the Kingdom.

Read also: Penalties and Violations Under Saudi Arabia’s Data Protection Law

Available safeguards may include standard contractual clauses, binding common rules or an approved accreditation mechanism. A transfer risk assessment may also be required, including for continuous or widespread transfers of sensitive data.

Remote access also needs attention. Allowing personnel outside Saudi Arabia to access personal data stored in a Saudi facility may amount to a cross-border disclosure or transfer even if the physical server never leaves the Kingdom.

The operator should therefore map where data is stored, where backups are held and from which countries administrators or support teams can access it.

Is an environmental permit required?

Environmental requirements depend on the project’s location, design and potential impact.

The National Center for Environmental Compliance oversees environmental permitting and compliance for facilities with a potential environmental impact. A data center project should assess the position where it includes generators, fuel storage, batteries, large cooling systems, substantial water use or electronic waste.

The assessment should take place during site selection and design, not after construction. Environmental conditions can affect the layout, equipment, operating procedures and project timetable.

What is the recommended approval sequence?

The following sequence gives investors a practical starting point:

1. Define the physical facility and every service that the business will sell.
2. Prepare a project-specific authority and approval matrix.
3. Complete land, power, connectivity and environmental due diligence.
4. Complete MISA registration where the project involves a foreign investor.
5. Incorporate the Saudi company with the correct commercial activities.
6. Obtain the building, municipal, environmental and safety approvals.
7. Apply for the appropriate CST data center registration for each facility.
8. Assess separate cloud or telecommunications registration requirements.
9. Complete the occupancy and operating approvals.
10. Finalize the cybersecurity, PDPL and customer-contract framework before launch.

Several applications may run in parallel. However, the company structure, technical design, customer services and regulatory filings must remain consistent.

What mistakes commonly delay data center projects?

A common mistake is treating CST registration as the only approval. It does not replace company establishment, construction, municipal, safety or environmental requirements.

Another is failing to distinguish between colocation and cloud computing. A company may register its physical facility but still lack the separate registration required for the cloud services it intends to sell.

Some investors also commit to a site before confirming power, connectivity, zoning or environmental conditions. These issues can force a redesign or make the location unsuitable.

Cybersecurity and data transfers create further problems when considered too late. A global support model may allow overseas administrators to access Saudi customer data, creating cross-border transfer issues even though the main servers remain in the Kingdom.

Finally, the customer agreement must match the service model. Generic hosting terms may not deal adequately with service continuity, security responsibilities, personal data, access rights, subcontractors, equipment removal and exit support.

Plan the licensing route before committing the project budget

Saudi Arabia provides a structured route for data center investment, but that route involves connected corporate, construction, technology and data-compliance requirements.

The practical value of early legal review is not limited to obtaining registrations. It helps the investor determine whether the proposed site, operating structure, technical design and customer services can work together under the applicable rules.

Before committing to a site, construction timetable or customer launch, investors should confirm which approvals apply to the company, the facility and the services it will sell.

Hamad in Association with Youssry Saleh & Partners advises data center developers and operators on MISA registration, corporate establishment, CST registration, site approvals, cloud and telecommunications requirements, PDPL compliance and customer contracts. Our team can prepare a project-specific licensing roadmap and identify regulatory gaps before they affect the build or launch schedule.

For customized legal consultation, please contact us at info@ahysp.com.

FAQ

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Foreign investors once treated Saudi antitrust rules as a formality. That is no longer safe. The GAC now reviews hundreds of transactions a year, most of them involving foreign parties, which makes it one of the busiest merger-control regulators in the region. If you are buying a target, setting up a joint venture, or pricing aggressively in a Saudi market, competition rules need to be on the table before you sign.

What does the Competition Law in Saudi Arabia regulate?

Competition Law in Saudi Arabia sets the rules that keep markets fair. The purpose is straightforward: stop companies from rigging the market, whether by teaming up against customers, misusing a strong position, or buying up rivals without approval. The General Authority for Competition enforces it.

The current law came into force in 2019 under Royal Decree No. M/75. It replaced the Kingdom’s first competition law from 2004 and goes further, with tougher rules and wider reach.

The law controls three things:

• Agreements between competitors. Businesses cannot work together to fix prices, share our customers or regions, or rig bids in a tender.
• Abuse of a strong market position. A company that dominates a market cannot use that power to force out rivals or impose unfair terms. Holding a large market share is allowed. Using it to shut out competitors is not.
• Mergers and acquisitions. Bigger deals, which Saudi law calls “economic concentrations,” must be reported to the GAC and cleared before they close.

One point often surprises companies new to the Kingdom. The GAC investigates cases, but it does not judge them. A separate body, the Committee for Review and Adjudication of Competition Law Violations, decides whether a breach happened and sets the penalty. Investigation and judgment stay in different hands.

Does Saudi competition law apply to companies with no office in the Kingdom?

Yes, and this is the feature that catches deal teams off guard most often. Article 3 of the Competition Law says the rules apply even to actions taken outside Saudi Arabia, as long as those actions affect competition inside the Kingdom. In other words, you do not need a Saudi company, a branch, or even a single employee in the country to fall under the law.

For mergers, this has a real consequence. Two foreign companies with no presence in Saudi Arabia may still have to file their deal with the GAC if their sales into the Saudi market are large enough to cross the thresholds. This is common in practice: about half of the deals the GAC reviews each year involve two foreign parties. Selling into the market, on its own, can be enough to bring a global deal under Saudi review.

Read also: MISA License Explained for Foreign Investors

So when a multinational lists the countries where it needs merger approval, Saudi Arabia belongs on that list as early as the EU or the other active Gulf regulators.

When must you notify the GAC before closing a deal?

Two conditions trigger a mandatory filing before closing. First, the deal has to be an economic concentration, meaning a change of control through a merger, acquisition, or standalone joint venture. Second, the parties have to cross the GAC’s financial thresholds.

Since a late-2023 reform, those thresholds are cumulative. A filing is generally required only when all three of these are true:

• The combined worldwide annual sales of the parties exceed SAR 200 million;
• The target’s worldwide annual sales exceed SAR 40 million; and
• The combined annual sales of the parties inside Saudi Arabia, the local-nexus leg, exceed SAR 40 million.

Because all three must be met, a large global buyer with only a small Saudi footprint can fall outside the net. That was the aim of the reform: to stop capturing deals with no real connection to the Kingdom.

Read also: Earn-Outs in Saudi Arabia: Legal Guide

Two details catch people out. Both sides carry the filing duty, and the GAC has fined a buyer and a target the same sum for the same failure to notify. Review then takes up to 90 calendar days from a complete filing, with a possible 45-day extension, so that period has to sit inside your signing-to-closing plan.

Where it is unclear whether a deal is caught at all, parties can ask the GAC for informal, non-binding guidance before preparing a full submission.

In practice

A global group signs to buy a foreign target. The target has no Saudi entity but sells into the Kingdom through a distributor. The lack of a local company does not settle the filing question on its own. Before fixing a closing date, the parties should look at turnover, control, and the target’s Saudi sales, and treat competition clearance as a condition precedent rather than a formality bolted on at the end.

What changed under the 2025 merger guidelines?

In April 2025 the GAC issued the fifth edition of its Economic Concentration Review Guidelines. Two changes matter most for foreign investors.

The first broadens the meaning of “control.” The guidelines now separate positive control, the power to direct strategic decisions, from negative control, the power to block them. A minority stake with veto rights over budgets, business plans, or senior appointments can amount to control, and so trigger a filing, without any majority holding. Investors in minority or club deals should look hard at their governance rights.

Read also: Joint Ventures with Saudi Partners: Benefits, Legal Requirements and Key Considerations

The second adds exemptions. The guidelines carve out some joint ventures aimed at markets or products not yet present in Saudi Arabia, and some transactions involving investment funds, where set conditions are met. They are useful but conditional, so check the criteria against the current text rather than assuming an exemption applies.

When is a company “dominant,” and what counts as abuse?

Dominance is not about size alone. The law treats a business, or a group acting in concert, as dominant under either of two tests: a share of at least 40% of the relevant market, or the ability to influence that market by controlling prices, output, or supply. The current law dropped the old requirement that dominance last for twelve months, so it can be assessed at a single point in time.

The second test reaches further than many foreign counsel expect. A firm can be dominant without selling anything directly, as long as it can move the price of a product or service in the market. The same logic can catch a powerful buyer, not only a seller.

Being dominant is lawful. Abusing that position is not. Article 6 lists prohibited conduct, and the list is not exhaustive: selling below total cost to force out rivals or block new entrants, fixing or imposing resale prices or conditions, manipulating quantities to create an artificial shortage or glut, discriminating between customers on equivalent deals, refusing to deal without objective justification, tying an unwanted product to a wanted one, and requiring a counterparty not to deal with a competitor. Market leadership on its own does not create liability; the abusive conduct does.

Which agreements between businesses are illegal?

The law splits prohibited agreements into two groups, and the split matters. Some restraints are anti-competitive on their face, with no need to prove any effect. Price-fixing, bid-rigging in tenders, market or customer allocation, and output limits sit here. Others are judged by their actual or likely effect, which leaves room to defend a restriction genuinely needed to launch a product or open a market.

Form does not matter. A prohibited understanding can be written, verbal, explicit, or simply tacit, so an exchange of future prices, discounts, or tender strategy with a competitor can create risk even without a signed document.

Enforcement here is active and public. In December 2025 the GAC fined thirteen establishments a combined SAR 36.9 million for price-fixing across several sectors. In an earlier and widely reported case, it penalized fourteen supermarkets, a total in the region of EUR 26 million, for abusing their positions by pressuring suppliers into free goods. Both were public decisions naming the companies involved.

In practice

Two suppliers meet at a trade-association event. Their sales managers compare notes on planned price increases and agree the market should “stay disciplined.” Nothing is written down. The exchange can still draw scrutiny, because the rules apply to oral and implicit understandings just as much as to signed contracts.

Can you reduce your exposure? Leniency, settlement, and exemptions

The law also gives companies room to manage risk, and moving early is what makes the difference.

Leniency rewards the first mover. The first company to come forward and hand the GAC evidence against its co-conspirators can obtain leniency. Timing is decisive: a leniency or settlement request can be made before or after the authority opens an investigation, but not once a decision has been taken to start criminal proceedings. The GAC must respond within 120 days of a complete request, and where it grants relief, no case proceeds before the violations committee against that applicant.

Settlement runs alongside, letting the GAC and an alleged violator resolve a matter without a full contest. Exemptions cover the front end: a business can apply to have an agreement, a practice, or a concentration exempted. The authority weighs whether the arrangement improves the market, product quality, or innovation, or delivers consumer benefits that outweigh the harm to competition, and it will not clear anything that removes competition altogether.

What are the penalties, and how are cases decided?

Penalties are heavy and scale with the breach. For core violations, including anti-competitive agreements, abuse of dominance, and unlawful or unmodified concentrations, the law allows a fine of up to 10% of the annual sales connected to the violation, or up to SAR 10 million where those sales cannot be assessed. The deciding committee can instead impose a fine of up to three times the profit gained from the offense, and any fine can double for a repeat breach committed within three years.

Lesser breaches carry lower ceilings. Obstructing an investigation attracts up to 5% of annual turnover, or up to SAR 5 million where turnover cannot be estimated, and other breaches reach up to SAR 2 million. Beyond money, the GAC can order structural remedies such as unwinding an agreement or requiring a divestiture, and final decisions may be published in the press at the offender’s expense.

Read also: Commercial Arbitration Rules in Saudi Arabia

The GAC’s investigators do not decide the case. A committee of five board members adjudicates violations, proceedings run in writing, and a decision becomes final unless a party appeals to the competent court within thirty days. Serious matters can escalate to criminal proceedings, and once that step is taken, leniency is no longer available.

Whether a given arrangement crosses the line often depends on how the market is defined and what effect the conduct has, which are questions of evidence and interpretation. Assessing exposure before you act is far safer than doing it after the GAC opens a file.

The practical takeaway

Competition compliance now sits at the center of doing business in the Kingdom. Collusion and abuse of dominance are prohibited, qualifying mergers and joint ventures need clearance before closing, the rules reach foreign parties that sell into the market, and fines can reach a tenth of the relevant sales. For an international investor the exposure is manageable, provided the work happens early: check the thresholds, test your governance rights against the control standard, review pricing and distribution terms before they harden, and remember that leniency and settlement exist if a problem surfaces.

If you are planning an acquisition, structuring a joint venture, or want comfort that your Saudi operations sit on the right side of the GAC’s rules, our Corporate and Competition team can assess your filing obligations and exposure before deadlines and structures are locked in. Getting the analysis right early costs far less than defending a decision later, and it keeps your transaction on schedule. For customized legal consultation, please contact us at info@ahysp.com.

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