COMMERCIAL REGISTRATION SYSTEM:
The Statute of Commercial Registration System as contained in the Council of Ministers Resolution No. 54 dated 29 Rabi II 1375 H. (1955) and No. 112 dated 13 Shawwal 1375 H. (1955) requires every industrial or commercial establishment, local and foreign, to be registered with the commercial registration offices of the Ministry of Commerce established in all the major towns of the kingdom. Some of the salient features of the system are:
- Branches of foreign business establishments or Saudi agents representing them must obtain prior approval of the Foreign Capital Investment Committee, Ministry of Industry and Electricity, after which they must register with the Ministry of Commerce within one month of the commencement of their business.
- All additional units or branches should also be registered within one month of commencement of business.
- All subsequent changes in particulars must be reported within one month of their occurrence.
- The prescribed application forms to be filled out require information such as names of the establishment and owners, their nationalities, the amount of capital and shares in the capital of each owner, etc
COMMERCIAL AGENCY REGULATIONS:
The Commercial Agency Regulations were promulgated by Royal Decree No. 11 dated 20 Safar 1382 H. (July 1962). Following are some of its salient features:
- Non-Saudis shall not be permitted to act as commercial agents in Saudi Arabia.
- No person may act as commercial agent unless his name has been entered in the Register maintained for that purpose by the Ministry of Commerce.
- The fees for registration in the agency register shall be SR 50 for an individual trader and SR 100 for a company, payable only once.
Further Implementation Rules for "Commercial Agencies Regulations" were issued under Minister of Commerce Order No. 1897 dated 24-5-1401 H. (March 30, 1981). A sample of the "CONTRACT OF AGENCY" prepared by the Ministry of Commerce according to Royal Decree No. M/32 issued on 10 Sha'ban 1400 H. (1980), amending the above-mentioned Royal Decree, has been included as appendix XIII to this Guide.
TENDERS REGULATIONS AND RULES FOR IMPLEMENTATION:
There is no central tenders board and every government agency is empowered to enter into contracts. The Kingdom supplemented the existing tenders regulations through Royal Decree No. M/14 issued on 7 Rabi II, 1397 H. (March 27, 1977). These regulations contain 14 Articles and govern bid submission, methods of procurement and performance, contract award, bid award and contracting authority, contract conditions, advance payments, delay fine, contract forms, etc. Article 14 stipulates that these regulations shall cancel and supersede all contradictory rules. Further, Rules for Implementation of Tenders Regulations were issued under ministerial Resolution No. 2131/97 dated 5 Jumada I 1397 H. (April 23, 1977). These rules contain 40 Articles and govern advertisement of tenders, manner in which they are submitted, bid evaluation process, time for acceptance of contract award, etc.
Council of Ministers Resolution No. 124 dated 29/5/1403 H. (March 14, 1983) requires that not less than 30 percent of contracts of "public works contracts" that require the performance of works, such as construction contracts generally, as well as maintenance and operations contracts, won by a foreign contractor or any Saudi-foreign joint venture prime contractor (with less than 51% Saudi capital), must be sub-contracted to contractors who are at least 51 percent Saudi owned and sponsor their own workers.
For details, please contact the Ministry of Finance and national Economy (see appendix I for address).