Legal developments

The Minister of Commerce and Investment approved the Regulations for Unlisted Joint Stock Companies (Regulations). The Regulations cover many topics, including the following:

  • remuneration of the board of directors;
  • holding general assembly meetings electronically;
  • regulating selling, buying and pledging the company's shares;
  • issuance and conversion of preferred shares;
  • share sale at auction;
  • distribution of profits to shareholders;
  • issuance and sale of priority rights resulting from the capital increase; and
  • procedures to appoint a third party to attend private or public assemblies.

Furthermore, it includes four forms: pledge request by pledgee form, pledge request by pledgor form, pledge release request form and power of attorney form. The Regulations were published in the Saudi Official Gazette, Um Al-Qura, and came into force on 25 November 2016. Please do let us know if you have any questions or require any additional information in this regard.

Saudi Arabia’s central bank, the Saudi Arabian Monetary Agency (commonly referred to by the acronym “SAMA”), announced that its name has changed to Saudi Arabian Monetary Authority effective immediately. The acronym “SAMA” will remain in use as usual and nothing else internally or externally will be affected.

Arab News – 1 December 2016

Visitors to Saudi Arabia (not including Haj and Umrah pilgrims, diplomats, and diplomatic visitors) are required to have a medical insurance policy in Saudi Arabia in effect during their visit, which will cover medical treatment at a maximum of SAR 100,000.

Companies in Saudi Arabia who are sponsoring visitors, or persons who intend to enter Saudi Arabia on a visit visa, should be aware of the insurance requirements for entry into the Kingdom.

Claims must be submitted within 60 days of the occurrence, and the insurance company must make compensation with 30 days of the claim.

During the inauguration of the sixteenth meeting of the heads of GCC countries, the Saudi Minister of Labor discussed the importance of developing a common system to extend insurance protection for Gulf citizens working in any of the GCC countries.

Arab News – 2 November 2016

Capital Market Developments

In pursuit of the goals of the Capital Market Authority (CMA) to develop the capital markets in Saudi Arabia and to enhance the protection of investors, the CMA has amended the Procedures and Instructions Related to Listed Companies with Accumulated Losses Amounting to 50% or More of its Capital (Procedures) so that the Procedures now apply to listed companies with losses in excess of 20% of their capital.

Hence, the Procedures are now renamed the Procedures and Instructions Related to Listed Companies with Accumulated Losses Amounting to 20% or More of its Capital. Meanwhile, the current Procedures will continue to be effective until the amended Procedures take effect on 22 April 2017.