Commerce minister imposes direct penalties for late financial filings

Saudi Arabia’s Minister of Commerce issued a decision imposing direct penalties on companies that fail to file financial statements on time, according to the official gazette.

The decision classifies penalties into two categories. The first covers all company types except unlisted joint-stock companies, with fines determined based on capital size and the number of managers.

For unlisted joint-stock companies, the fine was set at SAR 15,000 for companies with capital of SAR 5 million or less, rising to SAR 20,000 for companies with capital exceeding SAR 5 million.

The decision also sets penalties for small and micro enterprises, as defined under the executive regulations of the Companies Law, at SAR 4,000 for companies with a single manager or board chairman, and SAR 2,000 for companies with two or more managers.

The ministry said only warning penalties will apply for violations related to the 2024 financial year.

Under the decision, fines for a second consecutive year of non-compliance will increase by 50%, provided the first violation ruling becomes final.

Notifications will be issued in accordance with Article 94 of the executive regulations of the Companies Law.