Saudi Arabia’s Ministry of Commerce, under the directive of Minister Dr. Majid bin Abdullah Al-Qasabi, will begin imposing direct fines on anyone who fails to submit financial statements, in accordance with the Kingdom’s Companies Law.
The announcement emphasised that repeated violations within the statutory period for subsequent fiscal years will result in a 50% increase in fines.
The fines are structured as follows:
Violators in all types of companies (except for unlisted joint-stock companies)
- SAR 8,000 for the violator in a single-manager company with a capital of less than SAR 500,000.
- SAR 4,000 for the violator in a company with two or more managers and a capital of less than SAR 500,000.
- SAR 12,000 for the violator in a single-manager company with a capital of SAR 500,000 or more.
- SAR 6,000 for the violator in a company with two or more managers and a capital of SAR 500,000 or more.
Violators in unlisted joint-stock companies:
- SAR 15,000 for the violator if the company’s capital is less than SAR 5 million.
- SAR 20,000 for the violator if the company’s capital is SAR 5 million or more.
Under the ministerial decision, violators will be officially notified of the fines as per the mechanisms outlined in Article 94 of the executive regulations of the Companies Law.
The law also stipulates in Saudi Arabia’s Article 262 fines for violations against anyone who neglects or fails to perform their duty, with paragraph E specifying a fine against: “Whoever fails to perform his duty to keep the company’s accounting records and supporting documents to clarify its business details and contracts, to prepare financial statements in accordance with accounting standards approved in the Kingdom, or to file the same in accordance with the provisions of the Law.”
The implementation of direct fines underscores the Ministry of Commerce’s commitment to enforcing financial transparency and adherence to regulatory standards among businesses operating in the Kingdom of Saudi Arabia.
