Saudi Arabia set to curb commercial concealments.
As part of their ongoing fight against commercial coverup businesses, the Ministry of Commerce and the National Anti-Commercial Concealment Program of Saudi Arabia have set August 23, 2021 as the deadline to correct all the violations with respect to Anti-Commercial Concealment Law.
According to the announcement, the new Anti-Concealment Law will commence from August 23 and the regulations to correct the status of violators will be started simultaneously.
The correction period will be from February 28, 2021 to August 23, 2021. During this period, those who approach the Ministry of Commerce with a request to correct their status, will be exempted from the penalties prescribed in the law, the consequences thereof and of the retrospective payment of income tax. The regulations provide multiple options for both Saudi and expat violators to rectify their status.
Options for Rectification
Violators can correct their business status as per the Law in the following manner –
- By submitting an application to correct the status through the Ministry of Commerce website. (mc.gov.sa)
- By creating a legal partnership between Saudi and Non Saudi partner, after the latter obtains an Investment License.
- By selling the firm to Saudi.
- By selling the firm or part of the firm to a Non Saudi partner through an agreement, after the latter obtains an Investment License.
- By newly obtaining an Investment License by a Non Saudi and starting a business.
- By obtaining Premium Iqama by Non Saudi and transferring ownership in full or part to him as per agreement.
The government agencies participating in the National Anti-Commercial Concealment Program affirmed their full readiness to support all applicants to request correction to be regular investors in accordance with the options stipulated in the Regulations for Correcting the Status of Violators of the Anti-Concealment Law, and that there won’t be any leniency in the application of heavy penalties stipulated by the Law after the end of the corrective period. Reported Saudi Gazette in their article on the matter published on Feb 28, 2021.
Any person who gets arrested by the Ministry for violation of Anti-Commercial Concealment Laws, before submitting an application to rectify his status, or whoever gets referred to the Public Prosecution or the competent court, will not be given any exemption from penalties or other punishments.
Benefits of Rectification
Following are the obvious benefits of rectifying the violation status-
- Compliance with the laws of the Kingdom.
- Rectified businesses can continue commercial activity in Saudi Arabia.
- No retrospective imposition of Income Tax.
- Regularity in disposal of commercial funds.
- Exemptions from penalties and consequences as per Anti-Commercial Concealment Laws.
- Freedom to engage in other commercial activities in the Kingdom.
- Stability, growth and expansion of business.
We at Tass & Hamjit, as our pledge to be part of the Vision 2030 of the Kingdom, are committed to guide our clients and customers to identify their status as per law and assist them in rectifying their status.
Contact: uae@tasshamjit.com