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Saudi Arabia: What happened in 2020 and significant events in 2021

Year in Review 2020 and Year to Come 2021 summarises some of the major developments across Saudi Arabia last year, and a selection of key changes that we anticipate over the coming year. There are links to further reading, where available.

This publication has been written in collaboration with Zamakhchary & Co, our alliance firm in Saudia Arabia.

Explore our overview of key developments below.

Updates in


key areas in 2020 and 2021

“2020 has seen a range of legal developments which support Saudi Arabia’s progress towards Vision 2030 and the National Transformation Programme goals, as well as key measures to support businesses and the economy in response to the Covid-19 pandemic. Bank regulation continues to be a key focus of reform, as well as measures to stimulate listing on the Tadawul, facilitate the resolution of disputes and improve the taking of credit support in the Kingdom. Saudi Arabia has continued efforts to enhance foreign investment, aligning a number or laws and regulations with international best practice.”

Omar El Sayed, Partner, Saudi Arabia

photo of Omar El Sayed

Saudi Arabia highlights in 2020

Commercial disputes

Key measures were introduced to support the efficient resolution of commercial disputes.

Moveable assets law

A modernised regime regulates the grant of security over moveable assets.

Foreign investment

The anti-concealment law targets activities which breach the foreign investment regime.

Significant legal and regulatory events in 2020

2020 has seen a range of legal developments which support Saudi Arabia’s progress towards The Vision 2030 and the National Transformation Programme goals, as well as key measures to support businesses and the economy in response to the Covid-19 pandemic. Bank regulation continues to be a key focus of reform, as well as measures to stimulate listing on Tadawul and facilitate the resolution of disputes. Saudi Arabia has continued efforts to align with international principles.

Explore the tabs below to find out more.


Capital markets

Listing of depositary receipts: The Capital Market Authority (CMA) issued instructions relating to the listing of depositary receipts outside the Kingdom. Previously, foreign issuers could list their shares on the Saudi Stock Exchange (Tadawul), but the CMA’s regulations did not expressly permit secondary listings of Saudi issuers’ shares abroad. The instructions provide, for the first time, a mechanism for companies listed on Tadawul to obtain secondary listings outside the Kingdom.

Read more…


Anti-concealment law: A new Anti-Commercial Concealment Law was approved to address business licensing fraud and penalise the concealment of such offences (Cabinet Decision No.785/1441 On the Approval of the Anti-Cover Law). The law aims to prevent foreign nationals and companies from engaging or investing in any activity which they are prohibited from investing or engaging in under the Kingdom’s foreign investment regime. Violations are subject to penalties, including fines and imprisonment. Whistleblowers benefit from certain protections, including an exemption from penalties. Enforcement is to be a co-ordinated response between licensing authorities in Saudi Arabia and the new anti-commercial concealment committee.

Commercial leases: The Ministry of Municipal and Rural Affairs announced that it would no longer renew commercial licences for businesses after 4 October 2020 unless their commercial lease was registered on the EJAR lease registration portal (administered under the Ministry of Housing).

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Covid-19 relief measures: The Saudi Arabian Government introduced a set of measures to support businesses affected by the Covid-19 pandemic. The Saudi Central Bank (formerly known as the Saudi Arabian Monetary Authority) introduced the Private Sector Financing Support Program, a SAR 50 billion (USD 13.3 billion) economic stimulus package. It focuses particularly on supporting banks to continue lending to small and medium sized businesses (SMEs). Other measures include temporary changes to a deferred payment arrangement for SMEs, employment arrangements, a salary support scheme and extensions to deadlines for filing tax returns and paying taxes.

Read more…

Read more about the commercial impacts of Covid-19 in our briefing.

Dispute Resolution

Cross-border mediation: Saudi Arabia signed up to The United Nations Convention on International Settlement Agreements Resulting from Mediation (known as the Singapore Mediation Convention), which came into force in November. The convention encourages parties to resolve and enforce their cross-border commercial disputes using mediation, without recourse to the courts or arbitration.

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Commercial Courts Law: A new Commercial Courts Law sets higher standards for efficiency and transparency in commercial litigation. Among other things, it enables the courts to award interim remedies (such as injunctions) and allows public access to case documents and judgments.

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Pharmaceutical distribution: A new Pharmaceutical Establishments Law came into force in August. A key change is that the Saudi Food and Drug Authority (SFDA) will now license foreign-owned entities to open and operate businesses trading and distributing pharmaceuticals in Saudi Arabia. This is a departure from the old law which required all such entities to be wholly Saudi-owned.

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Saudi Central Bank rules on non-performing loans: The Saudi Central Bank issued new Rules and Guidelines on Management of Problem Loans in January, to help banks address their non-performing loans.

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Regulation of digital-only banks: The Saudi Central Bank issued Licensing Guidelines and Criteria for Digital-Only Banks in February, which set out the conditions required in order to apply for a Digital-Only Bank licence.

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Payment Services Provider Licensing Regime: The Saudi Central Bank revised the Payment Services Provider Regulations applicable to banks and other types of Payment Services Providers (PSPs) conducting regulated activities in Saudi Arabia.

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Insurance: The Saudi Central Bank issued Rules Governing Bancassurance Activities to regulate the sale of insurance products by banks on behalf of insurers in Saudi Arabia and to facilitate collaboration between banks and insurers to distribute and market insurance products, following a consultation.

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Security over moveable assets: A new regime for taking security over present or future rights in a wide range of moveable assets was introduced by Royal Decree M/94 dated 15/08/1441 H, which also amends the regime for taking pledges of movables under the Commercial Pledge Law issued in 2018.

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Special Economic Zones

Special Economic Zones: Saudi Arabia is set to introduce new Special Economic Zones (SEZs). Revisions to the Economic Cities Authority (ECA) Statute enable the establishment and regulation of SEZs, a key feature of Vision 2030, and renames the ECA as the Economic Cities and Special Zones Authority (ECZSA).

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VAT: The rate of value added tax (VAT) increased to 15%, with effect from 1 July 2020.

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Income Tax and Zakat: The General Authority of Zakat and Tax (GAZT) amended its Income Tax Law regime by way of Ministerial Decision No.5122 dated 1441/12/24. A key change to the regime enables GAZT to look through the corporate ownership structure to the ultimate indirect owners (not just second-level owners) of a Saudi Arabian company in order to determine whether it is subject to Corporate Income Tax or Zakat, backdated to 1 January 2020. This may mean more companies with non-Saudi or non-GCC owners are subject to tax or Zakat.

Saudi Arabia highlights in 2021

Private sector diversification

Efforts to stimulate private sector diversification will continue.

New companies law

A new companies law regime may be introduced.

Special Economic Zones

Saudi Arabia may establish new Special Economic Zones.

Significant legal and regulatory events in 2021

Private sector diversification will no doubt continue to be a major theme in the legislative agenda in 2021. Further measures to support for the Kingdom’s small and medium sized business community and to refine the Companies Law regime are anticipated.

Explore the tabs below to find out more.


New Companies Law proposed: Companies in Saudi Arabia may soon be subject to a revised companies law regime. The Ministry of Commerce and the CMA consulted in July on a new draft Companies Law, which is set to replace the existing Saudi Arabian Companies Law (Royal Decree No.M/03 dated 28/01/1437H (corresponding to 10 November 2015)). Key changes proposed by the draft law include a new type of a simple joint stock company and codified directors’ duties.

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Professional regulation: The Ministry of Commerce is proposing to introduce rules to regulate the licensing of independent consulting professionals, in the fields of hospitality, education, financial, economic and administrative consulting, as well as translation.

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Interest rate reform: 2021 will see banks and financial institutions transition away from the London Interbank Offered Rate (LIBOR) and other IBORs and towards other alternative solutions, known as Alternative Reference Rates (ARR). Banks, asset managers and corporates in Saudi Arabia who are likely to be affected by the change will need to prepare and plan for how to make an orderly transition. Future changes to the Saudi Interbank Offered Rate (SIBOR) are anticipated.

Read more…

Vision 2030

Vision 2030: In 2021, we expect Saudi Arabia to continue to modernise the commercial legal framework in line with the Vision 2030 and National Transformation Programme goals. Further changes to encourage greater foreign investment and support the diversification of the private sector may be introduced.

Download your copy of the report:

Year in Review 2020 and Year to Come 2021 - Saudi Arabian law


Saudi Arabia YIR YTC PDF download


Saudi Arabia’s ambitious Vision 2030 internal reform programme aims to transform every aspect of life in the Kingdom. The paradigm-shifting change envisioned by Vision 2030 is underpinned by three pillars – to foster a vibrant society; develop a thriving economy; and propel an ambitious nation – together with 13 Vision Realisation Programmes and 96 Strategic Objectives.

This guide analyses how Saudi Arabia’s economy and laws are evolving to support foreign inbound investment.



Created in collaboration with Zamakhchary & Co.

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Important note: This publication highlights certain key developments in the laws and regulations in Saudi Arabia. The legislative process in Saudi Arabia can be opaque. Draft legislation is generally not made publicly available nor the subject of official consultations. Timescales for enactment of legislation are not typically published. In practice, laws and regulations may come into effect without being published. Accordingly, it is difficult to anticipate the pace and scope of legislative change.


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