Saudi Arabia’s bankruptcy and insolvency law regime has been governed by two regulations, the earliest dating back to 1930. These regulations have historically caused uncertainty and hesitation amongst lenders and foreign investors. In April 2015, the Ministry of Commerce and Investment (MOCI) issued a draft policy paper for adoption of a more robust bankruptcy and insolvency regime and, in September 2016, the MOCI issued a draft Bankruptcy Law for public comments and submitted the same to the Shoura Council for approval.
In December 2017, the Shoura Council approved the draft Bankruptcy Law. As the Shoura Council is primarily an advisory body without legislative powers, the new Bankruptcy Law will be subject to further approval prior to implementation.
Saudi Gazette – 12 December 2017
Whistleblower protection law
Saudi Arabia has been in the midst of a sweeping anti-corruption drive, which began in November 2017. As part of this drive, the Shoura Council adopted a draft regulation for the protection of whistleblowers who report financial and administrative corruption.
Saudi Arabia’s anti-bribery and corruption (ABC) regime is largely governed by the Combating Bribery Law (CBL), which is primarily aimed at eradicating corruption involving public officials working in a government capacity (although the CBL can be read in such a way that it may be applied to wholly private transactions as well).
It is not yet known how Saudi Arabia’s ABC regime and the CBL will be shaped by recent events and the proposed whistleblower protection measures.
Saudi Gazette – 28 November 2017
Companies employing non-Saudi individuals pay fees on their expatriate employees in the form of Iqama issuance and renewal fees. Beginning this month, expat fees will be increased to SAR 300–400 per expat employee. The Ministry of Finance (MOF) additionally announced that such fees will gradually increase to SAR 800 by 2020 for companies employing more expats than Saudis, but will reach no higher than SAR 700 for those companies employing more Saudis than expats.
The Ministry of Labor (MOL) clarified that firms with five employees or fewer will be exempted from the payment of expat fees.
In July 2017, the MOF commenced assessing expat dependants' fees, which is reported to have decreased the expat workforce by 62,000 by the end of 2017. In 2018, dependants' fees will be increased to SAR 200 per dependant.
In 2017, the MOL considered introducing an annual housing allowance requirement of a minimum of two months' basic salary, but later retracted this decision.
Saudi Gazette – 19 December 2017
With the introduction of VAT in 2018, the MOCI announced that it will intensify inspection and investigation efforts in coordination with the General Authority of Zakat & Tax (GAZT). Companies with a presence in Saudi Arabia should be sure that books and records are available to inspectors and indicate that all transactions are in compliance with the new VAT requirements.
Saudi Gazette – 31 December 2017
Generally, Saudi Arabia’s Anti-Commercial Fraud Law and its Implementing Regulations broadly prohibit the sale, advertisement, offer and importation of products containing false or misleading information. Penalties for violations can include fines, closure of the offending business, and even imprisonment.
As an example of the application of these rules, the MOCI announced that a store was fined and penalised for raising the prices of goods, then offering discounts on the goods to the public – thus creating an artificial “discount” price. The store also failed to maintain a price list on site.
Companies in Saudi Arabia may not offer promotions and discounts except with a licence or no-objection from the MOCI, which can be applied for via a new online service.