International Companies have less than 2 years to set up Regional Headquarters in Saudi Arabia.

 

As one of the leading law firms in Saudi Arabia, we have been advising several companies from around the world and representing them in Saudi Arabia in various capacities. Until now, there was no mandatory requirement to have a local presence in Saudi Arabia to enter into contract with businesses and enterprises based in Saudi Arabia. However, effective January 1st 2024, that will change. International companies now have less than two years to register and set up their regional headquarters in Saudi Arabia under the new law.

His Excellency, Engineer Khaled Al-Falih, Saudi Arabia’s Minister of Investment, said the move should not come as a surprise since it is a continuation of the kingdom’s policy, which is based on Saudi Arabia’s 2030 goal for attracting international investment. Riyadh’s strategy is a plan announced by Crown Prince Mohammed bin Salman in January of last year, with one of its goals being to relocate multinational commercial businesses’ regional headquarters to Riyadh.

In keeping with this effort, the Kingdom has declared that any foreign trade business that does not have a regional headquarters in the kingdom would have their contract terminated by 2024.

Key Points to Keep in Mind

The law will come into effect on January 1, 2024 and will limit government contracts for certain enterprises.

  • To be considered for future contracts and extension of existing ones, international enterprises must have a regional headquarters in Saudi Arabia.

 

  • If a foreign company does not establish a regional headquarters in Saudi Arabia, it will be unable to contract with government organizations, agencies, or funds.

 

  • “Regional headquarters” is defined by the Saudi Minister of Investment as having all executive staff operations and supporting activities in Saudi Arabia.

 

  • With previous government approval, headquarters must be situated in Riyadh, Dammam, or Jeddah.

 

  • More information on the new law’s exemptions will be released soon.

 

What it means for companies wanting to do business in Saudi Arabia.

Only multinational corporations with no physical presence in Saudi Arabia are subject to the new Saudi legislation. Companies who currently have a presence in Saudi Arabia or want to do so are not barred from bidding on government contracts or doing business with the private sector. Companies who might be entering Saudi Arabia or bidding on Saudi Project might want to keep this new law in mind and set up their presence sooner than later.

As a leading law firm in Saudi Arabia , we have been receiving queries on how to set up a branch, subsidiary or a company in Saudi Arabia. We detail the process here, however please note, this is not legal advice and only provided for informational purpose. If you would like to learn more or want to set up a company, you are advised to contact our corporate law practice group.

  • Apply for an investment license from the Ministry of Investment (MISA).
  • Establishment, paperwork, and publication contract preparation (for new subsidiaries and companies).
  • Submit your application to the Ministry of Commerce(MOC) for a Commercial Register Certificate (CR).
  • Bank account opening.
  • Making a capital deposit and receiving a bank certificate.
  • Become a member of the Chamber of Commerce.
  • Renting a firm headquarters that complies with civil defense legal criteria.
  • Issuing the certificate of civil defense
  • Obtain a local municipal license.
  • Inform the Ministry of Labor and open a file.
  • Entry into the General Social Insurance Corporation’s database.
  • General Authority for Zakat Registration.
  • VAT Registration.
  • Register for a national address with Saudi Pos
  • Use the Quua platform for labor office services to open a file.
  • Sign up for the modad platform to keep track of and record employment contract Granting the Director General a work visa.
  • Involvement and activation of a resident service for passport services and the Ministry of the Interior for foreign residents.

We would be happy to provide you with additional details on advise you on the setting up a business in Saudi Arabia. Feel free to reach out to us or contact us by email on info@hejailanlaw.com

Saudi Arabia Data Protection Law to take effect from March 23, 2022

The new Data Protection Law in Saudi Arabia, Royal Decree M/19 of 9/2/1443H (16 September 2021); Cabinet Resolution No. 98 of 7/2/1443H (14 September 2021), has been published in the Official Gazette, initiating a 180-day period before the Law takes effect on March 23, 2022. Data controllers may have a year from that date to make changes to their arrangements in order to guarantee compliance.

While the related Regulations will provide more information, the Law seems to be a big step in the right direction. We present a broad summary of the law in this article, as well as some notes on areas that might create stumbling blocks.

The PDPL is intended to safeguard “personal data,” which is defined as any information, in any form, that may be used to identify a person directly or indirectly. This specifically includes a person’s name, identity number, addresses and phone numbers, as well as images and video recordings.

The PDPL applies to any processing of personal data in Saudi Arabia by enterprises or public organizations using any method, including processing of personal data of Saudi citizens by entities based outside the Kingdom.

The PDPL does not apply to personal data processing for personal or family purposes.

The new legislation has numerous significant standards that all businesses should be aware of:

Personal data of all Saudi inhabitants, including citizens and non-citizens, is covered by the legislation.

Extraterritoriality: The legislation applies to any processing of Saudi resident data carried out in the Kingdom or by companies situated outside the Kingdom.

Cross-Border Data Transfers: Data transfers outside of the Kingdom are only permitted for certain, express reasons set forth in the legislation, or for “other purposes” subject to future restrictions. Even if the transfer falls into one of the approved categories, additional requirements must be met, including permission by the appropriate government body, with exceptions given only on a case-by-case basis. Data controllers are required to register with SDAIA and pay an annual fee.

Consent: The basic legal foundation for processing personal data is consent, which must be given in writing (subject to further requirements in the forthcoming regulations). Only in extremely restricted instances may personal data be handled without authorization.

Local Presence: Any international corporation that handles the personal data of Saudi citizens without a legal presence in the Kingdom must select a local representative who is licensed for that purpose. The SDAIA will decide when this requirement takes effect.

Sensitive Data: Under the new legislation, all sensitive personal data, such as genetic, health, credit, and financial data, will be controlled, but will also be subject to additional regulation. The statute envisions a “reconciliation” approach with current data regimes in place by other Kingdom authorities.

Breach Notification: Any breaches, leaks, or other unauthorized access to personal data must be reported to SDAIA and data subjects “immediately.”

Records: Data controllers must plan and register data processing operations with SDAIA in order to comply with the law.

Criminal Penalties: The legislation imposes criminal penalties that include up to two years in jail and fines of up to SAR 3 million ($800,000 USD). Administrative penalties with heavier fines may be applied.

It is highly recommended that businesses based in Saudi Arabia consult with law firms in Saudi Arabia to understand the extent and applicability of the new data protection law and penalties for non-compliance, breach or violations.

Disclaimer: As one of the leading law firms in Saudi Arabia operating in technology and telecommunication, we have put out this note for informational purposes only, it is not intended as legal advice. Specialist advice is to be sought with regard to your specific circumstance.

The Law Firm of Salah Al Hejailan Tops Ranking in Chambers and Legal500

For several years, we have been a top ranked law firm  in Saudi Arabia in both Chambers and Partners as well as in Legal 500. This year once again several of our practice areas are featured in both Legal 500 and in Chambers and Partners are being amongst the best in Saudi Arabia. As a leading law firm in Saudi Arabia we have operated with one ethos in mind to provide the absolute best legal representation to all our clients.  We are thank all our clients for the opportunity to provide you with exceptional legal service.

Third Arab Conference of Lawyers – 28 February to 2 March 2019 (Cairo, Egypt)

Sheikh Salah Al-Hejailan, an attorney- and counselor-at-law, established his law firm in Riyadh in the year 1968, which has subsequently become the leading law firm in Saudi Arabia and the entire region. Sheikh Salah Al-Hejailan who graduated in the Faculty of Law, Cairo University in the year 1962, has joined the Council of Ministers as a legal adviser. Thereafter, he got his LLM from the University of South California, Los Angeles, in the year 1968. He was permitted by the late King Faisal ibn Abdul Aziz Al-Saud to practise the law profession. That was the first license to be given to a person with legal qualifications.
The Law Firm of Salah Al-Hejailan is the first law firm in Saudi Arabia which has had association agreements and partnerships with the most leading international law firms. In the 70s, the Law Firm of Salah Al-Hejailan established the first professional partnership with the law firm of Clifford Turner (thereafter Clifford Chance), the renowned British law firm. In the year 2002, the Law Firm of Salah Al-Hejailan entered into a professional partnership with Freshfields Bruckhaus Deringer, one of the internationally renowned law firms.
Recently, the Law Firm of Salah Al-Hejailan has entered into a professional partnership comprising Sheikh Salah Al-Hejailan and his sons, Hussam, Esq., Sultan, Esq. and Fares, Esq., in addition to his daughter, Mrs. Haneen Al-Hejailan, all of whom are licensed lawyers and are in possession of law degrees from famous European and American universities. They also have vast experience in the legal field in Saudi Arabia and Britain.
The head office of the Law Firm of Salah Al-Hejailan is located in the city of Riyadh and has two branches, one in the city of Jeddah (the Western Province) and the other is in the city of Al-Khobar (the Eastern Province). The Law Firm of Salah Al-Hejailan in Saudi Arabia employs more than 80 attorneys and law professors, both from the Arab and European countries. More than 60 Saudi lawyers have duly received comprehensive legal training and extensive experience in this firm, for many years, before they have established their own businesses across the various regions of Saudi Arabia. It may also be noted that several law professors of Egyptian nationality, who rank first in the field of jurisprudence, have worked with, and
rendered a distinguished legal support to, the Law Firm of Salah Al-Hejailan. Those, inter alia, include the following:
Prof. Dr. Aktham Alkhouli
Prof. Dr. Abdul Wadood Yehya
Prof. Dr. Samir Sharqawi
Prof. Dr. Mohamed Hassanain Abdulal
Prof. Dr. Ahmed Sayed Al-Sawi
Prof. Dr. Abdul Fattah Al-Seify
Prof. Dr. Abdul Fattah Khedr
Prof. Dr. Moatamed Abdul Ghani Muharram
Prof. Dr. Mohamed Al-Qalyoubi
Prof. Dr. Mohamed Badran
Prof. Dr. Said Yehya
Prof. Dr. Amal Al-Fezairi
Prof. Dr. Maher Al-Seddawy
Prof. Dr. Gismat Al-Jedawwi
Prof. Dr. Tallat Dowidar, etc.
It may also be mentioned in this respect that Her Majesty, Queen Elizabeth II of England has bestowed on Sheikh Salah Al-Hejailan the most excellent order of the British Empire, as an honorary commander in the Civil Division. Sheikh Salah Al-Hejailan has also obtained an Order of Merit from the Danish government in appreciation of his services and for his achievements in the field of international cases. It may also be noted that Sheikh Salah Al-Hejailan has been the first elected president of the Euro-Arab Arbitration System of the Euro-Arab Chambers of Commerce and continued in that position for a period of 15 years.

Council of Ministers’ Resolution No. (496) Date: 14/09/1439H

قرار مجلس الوزراء رقم (496) و تاريخ 14/09/1439هـ

 

الموافقة على تنظيم الهيئة السعودية للملكية الفكرية.

 

Council of Ministers’ Resolution No. (496) Date: 14/09/1439H

 

Approving the regulations of the Saudi Commission for Intellectual Property.

 

تهدف الهيئة الى تنظيم مجالات الملكية الفكرية في المملكة و دعمها و حمايتها و الارتقاء بها لأفضل الممارسات العالمية وفق عدة صلاحيات أبرزها اقتراح الأنظمة و اللوائح المتعلقة بحقوق الملكية الفكرية و تسجيل حقوق الملكية الفكرية و منحها وثائق الحماية, إضافة لذلك إبداء الرأي في شأن الاتفاقيات الدولية المتعلقة بحقوق الملكية الفكرية و الترخيص للأنشطة ذات العلاقة.   

The Authority aims at organizing, supporting, protecting and upgrading the intellectual property fields in the Kingdom in accordance with a number of powers, including the proposed laws and regulations relating to intellectual property rights, the registration of intellectual property rights and the granting protection documents to the intellectual property rights. As well as giving an opinion on international agreements related to intellectual property rights and licensing of related activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Royal Decree No. A/218 dated17/09/1439H on the establishment of the Royal Commission for Mecca and Holy Sites.

أمر ملكي رقم (أ/218) و تاريخ 17/09/1439هـ لإنشاء هيئة ملكية لمدينة مكة المكرمة و المشاعر المقدسة.

 

Royal Decree No. A/218 dated17/09/1439H on the establishment of the Royal Commission for Mecca and Holy Sites.

Council of Ministers’ Resolution No. (487) Date: 14/09/1439H

قرار مجلس الوزراء رقم (487) و تاريخ 14/09/1439هـ

 

الموافقة على تنظيم دارة الملك عبدالله.

 

Council of Ministers’ Resolution No. (487) Date: 14/09/1439H

 

Approving the regulation of King Abdullah Darah.

 

الدارة هي المرجع الأساسي لتاريخ المملكة العربية السعودية و تراثها, و تهدف إلى خدمة تاريخ و تراث المملكة و العالمين العربي و الاسلامي.

و لها على سبيل الذكر انشاء القاعات التذكارية و المتاحف, و توثيق المصادر و المعلومات التاريخية و إتاحتها للجمهور بما فيها المخطوطات و الأفلام و الصحف.

Foundation For Research And Archives (Al Dara) is the primary reference to the history and heritage of Saudi Arabia and aims to serve the history and heritage of the Kingdom, the Arab and Islamic world.

It has, for example, the right to establish memorial halls and museums, documentation of historical sources and information and made them available to the public, including manuscripts, films and newspapers.

Council of Ministers’ Resolution No. (392) Date: 17/07/1439 H

قرار مجلس الوزراء رقم (392) و تاريخ 17/07/1439هـ

 

الموافقة على الغاء إعفاء ضريبة الدخل على الطائرات الأجنبية التي تستأجرها المؤسسة العامة للخطوط العربية السعودية لتسييرها في رحلاتها التجارية.

 

Council of Ministers’ Resolution No. (392) Date: 17/07/1439 H

 

Approving the cancellation of the income tax exemption on foreign aircrafts leased by the General Organization of Saudi Arabian Airlines for its commercial flights.

Ministry of Commerce and Investment’s Resolution No. (42241) Date: 02-08-1439H | (قراروزارةالتجارةوالاستثماررقم (42241) وتاريخ 2/08/1439هـ)

قراروزارةالتجارةوالاستثماررقم (42241) وتاريخ 2/08/1439هـ

إصدارالميثاقالاسترشاديللشركاتالعائليةالسعودية

Ministry of Commerce and Investment’s Resolution No. (42241)Date: 02-08-1439H

Issuing a guiding charter for Saudi family businesses.

Capital Market Agency’ Resolution No. (1-35-2018) Date: 09-07-1439H | (قرار مجلس هيئة السوق المالية رقم (1-35-2018) و تاريخ 9/07/1439هـ)

قرار مجلس هيئة السوق المالية رقم (1-35-2018) و تاريخ 9/07/1439هـ

لائحة حوكمة الشركات

Capital Market Agency’ Resolution No. (1-35-2018)Date: 09-07-1439H

Regulation of corporate governance.