Saudi Arabia National Anti-Concealment Program

Dear Member,

In the letter sent to our Chamber by TOBB, with reference to the letter of the Ministry of Trade dated 10.02.2022 and numbered 71787313, it is stated that, since more favourable conditions are provided to Saudi citizens in obtaining business licences and in tax obligations in Saudi Arabia (SA), it is a common practice in the country, although prohibited, for foreign entrepreneurs, generally wishing to carry out small and medium-scale commercial activities, to engage in economic activity by establishing an informal partnership with a SA citizen they trust. It is stated that in this practice, called commercial concealment, the Saudi party obtains the business licence without any minimum investment amount and enables the foreign party to carry out commercial activities; however, there are many foreigners who, having established a trust-based partnership, invested in SA and ran a company, but suffered losses because the Saudi party, the official owner of the company, cut off their ties with the company.

The letter further states that, in order to prevent these practices, the National Anti-Concealment Program was launched by the SA Ministry of Commerce on 28 February 2021, enabling businesses to bring their legal status into compliance with the law without penalty by fulfilling the necessary conditions; that the said programme will expire on 16 February 2022; and that stricter inspections of such companies are expected after the transition period. 

 

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Date Added :2022-02-15 02:43:00