A commercial register in a Saudi's name while an expatriate owns and runs the business is concealment (tasattur), criminalised by the Anti-Concealment Law of 1442H for both sides.
What counts as concealment?
- Enabling a non-Saudi to run a business for his own account, without a licence to do so, under a Saudi's name, register or licence.
- Enabling a licensed non-Saudi to run an activity he is not licensed for.
- Indicators: the expatriate controls bank accounts and POS, transfers the profits, and the register holder takes a fixed monthly sum.
Penalties
| Penalty | Under the law |
|---|---|
| Prison and fine | Up to five years and SAR 5 million, or either |
| Ancillary | Seizure of illicit funds, dissolution, deletion of the register, bans |
| For the expatriate | Deportation and no return for work |
Check the current official text and regulations.
Lawful alternatives
- A foreign investment licence to own the business directly where permitted.
- A genuine registered partnership naming the foreign partner in the articles of association. Read setting up a company as a non-Saudi.
- A proper employment contract if the expatriate is a manager, with a fixed wage, not the profits.
If you are in a concealment arrangement now, correct it before it is discovered, and take advice first so the steps are not used against you.
Want to invest or correct your position lawfully?
Usus Law Firm handles company formation for foreign investors and restructuring in full confidence, in Riyadh and Tabuk, and advises in English.
This article is general legal information and is not a substitute for advice on your specific case. Court proceedings in Saudi Arabia are in Arabic; the official Arabic text of each law prevails.
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