Global Law Experts top search results to help tackle law in Saudi Arabia

Saudi Arabia’s legal system is based on Islamic Sharia law, derived mainly from the Quran and Sunnah. The courts cover criminal, civil, and commercial matters, with judges interpreting religious texts. There is no full codified law system, so rulings depend on this interpretation. Modern regulations have been introduced to address commerce and administration, creating a blend of tradition and reform.

Starting a business involves registering with the Ministry of Commerce and Investment and obtaining relevant licenses. Foreign investors must get approval from the Saudi Arabian General Investment Authority (SAGIA). Compliance with Saudization policies, which require hiring Saudi nationals, is mandatory. Businesses must also register for tax purposes and meet sector-specific rules. Legal advice can ensure smooth compliance.

Saudi Arabia allows up to 100% foreign ownership in many sectors, removing previous local partner requirements in most cases. However, some strategic industries remain restricted. Foreign investors need licensing from SAGIA and must comply with local labor and tax laws. Incentives exist, but investors must respect national regulations to operate lawfully and benefit from available opportunities.

In Saudi Arabia, commercial litigation is handled by courts that apply Sharia law alongside modern regulations. The process begins with filing claims and often includes mandatory mediation to encourage settlement before trial. Courts rely heavily on evidence and witness testimonies. While parties have the right to appeal decisions, many prefer arbitration due to its faster pace, confidentiality, and efficiency, making arbitration a popular choice for resolving business disputes.

Saudi Arabia’s Arbitration Law of 2012 regulates both domestic and international arbitration proceedings, balancing global standards with Sharia principles. The country is a signatory to the New York Convention, facilitating the enforcement of foreign arbitral awards. Arbitration is widely used as a flexible, confidential alternative to litigation, offering businesses an effective way to resolve disputes swiftly within the legal framework of Saudi Arabia.

Administrative law in Saudi Arabia governs how government agencies exercise their authority, requiring compliance with Sharia and relevant regulations. It oversees procedures for issuing permits, managing public resources, and settling disputes involving administrative decisions in specialized courts. Recent reforms have enhanced transparency and accountability, ensuring that government actions balance effective administration with the protection of individual and business rights under Saudi law.

In Saudi Arabia, laws on anti-money laundering (AML) and counter-terrorist financing (CTF) are comprehensive and strictly enforced. Financial institutions must carry out thorough customer verification, report suspicious transactions promptly, and keep detailed records. The Financial Intelligence Unit plays a key role in monitoring compliance and coordinating with international agencies. These regulations help protect the country’s financial system from abuse, support national security, and align Saudi Arabia with international standards against financial crime.