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Fines for failing to submit financial statements in Saudi

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Attention businesses in Saudi Arabia! The Ministry of Commerce is cracking down on companies that fail to submit their financial statements on time.

New Fines for Non-Compliance

The Kingdom has announced fines of up to $5,330 for anyone who violates the Companies Law by neglecting to submit financial statements. Setting up a company in Saudi Arabia requires companies to align with the kingdom’s laws. This move aims to ensure greater transparency and accountability within Saudi businesses.

The Breakdown of Fines

The exact penalty depends on the type of company and its capital size. Here’s a quick guide:

  • For all companies except unlisted joint-stock companies:
    • Single-manager companies with capital less than $133,300: $2,130 fine
    • Companies with two or more managers, capital less than $133,300: $1,070 fine
    • Single-manager companies with capital of $133,300 or more: $3,200 fine
    • Companies with two or more managers, capital of $133,300 or more: $1,600 fine
  • For unlisted joint-stock companies:
    • Company capital less than $1.3 million: $4,000 fine
    • Company capital of $1.3 million or more: $5,330 fine

Repeat Offenses Get Steeper Fines

If a company fails to submit financial statements again after being fined, the penalty amount increases by 50%!

Why the Stricter Measures?

The Companies Law requires companies to prepare and submit financial statements within six months of their fiscal year ending. These statements, following Saudi Arabia’s accounting standards, provide vital information about a company’s financial health. Timely submission ensures transparency for investors, creditors, and other stakeholders.

Stay Compliant, Avoid Penalties

Businesses that are set up Saudi Arabia are advised to familiarize themselves with the Companies Law and ensure timely submission of their financial statements. This will not only avoid hefty fines but also contribute to a more transparent business environment in the Kingdom.

Source: https://www.arabianbusiness.com/culture-society/saudi-arabia-announces-fines-of-up-to-5330-for-failing-to-submit-financial-statements

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