Article 239 of the Saudi Companies Law
المادة 239 من نظام الشركات · الباب الحادي عشر: الشركات الأجنبية
The article treats a foreign company's branch or representative office in the Kingdom as its domicile for its activity inside the Kingdom, and applies all the laws in force to it.
Official text (Arabic)
This article has not been amended since the law was issued.
يعد فرع الشركة الأجنبية أو مكتب تمثيلها داخل المملكة موطنًا لها فيما يتعلق بنشاطها وأعمالها داخل المملكة، وتطبق عليه جميع الأنظمة المعمول بها في المملكة.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 239 explained in plain English
This article contains two important rules for anyone dealing with a foreign company that has a presence in the Kingdom:
1- The branch or representative office is the company's domicile: A foreign company's branch or representative office inside the Kingdom is treated as its domicile for its activity and business inside the Kingdom. The foreign company thus has a known domicile in the Kingdom connected to its business there.
This rule is limited in scope: it concerns activity and business inside the Kingdom, not the company's business in other countries.
2- Subjection to Saudi laws: All the laws in force in the Kingdom apply to the branch or representative office.
Those dealing with the foreign company, such as customers and suppliers, benefit from this, since they find a domicile for the company inside the Kingdom for its business there. This is complemented by Article 238, which regulates the fiscal year, financial statements and auditor of a foreign company's branch, and by Article 240, which provides for the joint liability of the foreign company and those who carried on its activity if it operated before completing the licensing and registration procedures or went beyond what it was licensed for.
To ask about the effect of this rule in a particular dispute with a foreign company, it is advisable to consult a lawyer specializing in foreign investment or commercial disputes.
Practical example
A Saudi establishment in Riyadh contracted with a branch of a foreign company to supply equipment, and a dispute then arose between them over the supply. The company's branch in Riyadh is treated as its domicile for this activity inside the Kingdom, and the branch is subject to all the laws in force in the Kingdom.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
How we write and review contentA question about Article 239 of Companies Law?
Describe what happened and specialist lawyers answer. You can write in English.
- Completely free
- Lawyers from the directory answer
- Your name stays hidden
Commercial & Corporate Law lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Commercial & Corporate Law lawyers
Lawyers who handle this kind of case
شركة امتداد النظام للمحاماة والاستشارات المهنية
- Labour & Employment Law
- Criminal Law
- Criminal Law
- Commercial & Corporate Law
Frequently asked questions about Article 239 of the Saudi Companies Law
What is the domicile of a foreign company in Saudi Arabia?
Its branch or representative office inside the Kingdom is treated as its domicile for its activity and business inside the Kingdom.
Is a foreign company's branch subject to Saudi laws?
Yes. All the laws in force in the Kingdom apply to the branch or representative office.
More articles on Foreign Companies
- Article 235
The article applies the Companies Law to foreign companies carrying on activity in the Kingdom, except the formation provisions and without prejudice to special agreements and applicable laws.
دون إخلال بالاتفاقات الخاصة المبرمة بين المملكة وبعض الدول أو الشركات الأجنبية، والأنظمة المعمول بها في المملكة، وفيما عدا الأحكام المتعلقة بتأسيس الشركات، تسري
- Article 236
The article states that a foreign company carries on its activity inside the Kingdom through a branch, a representative office or any other form, in accordance with the Foreign Investment Law and the relevant legal provisions.
تمارس الشركة الأجنبية نشاطها وأعمالها داخل المملكة من خلال فرع أو مكتب تمثيل أو أي شكل آخر، وفقًا لنظام الاستثمار الأجنبي والأحكام النظامية الأخرى ذات العلاقة.
- Article 237
The article requires every branch or representative office of a foreign company to put on its papers, documents and publications its address in the Kingdom and the company's full name, address and head office.
يجب على كل فرع أو مكتب تمثيل لشركة أجنبية أن يضع على جميع أوراقه ووثائقه ومطبوعاته عنوانه في المملكة، بالإضافة إلى الاسم الكامل للشركة وعنوانها ومركزها الرئيس.
- Article 238
The article regulates the finances of a foreign company's branch: stating its fiscal year in the registration application, preparing and filing its financial statements with the auditor's report within 6 months, and appointing an auditor.
1- يجب أن يتضمن طلب قيد فرع الشركة الأجنبية تاريخ بدء وانتهاء السنة المالية للفرع. 2- فيما عدا مكاتب التمثيل، يجب على فرع الشركة الأجنبية إعداد القوائم المالية
- Article 240
The article makes a foreign company and those who carried on its activity jointly liable if it operated before completing licensing and commercial register registration or went beyond what it was licensed for.
إذا زاولت الشركة الأجنبية نشاطها وأعمالها قبل استيفائها إجراءات الترخيص، إن وجدت، وقيدها لدى السجل التجاري، أو قامت بأعمال تجاوزت المرخص لها فيها، كانت الشركة و
- Article 241
A foreign company present in the Kingdom to carry out specific work within a set period is registered provisionally in the commercial register until that work ends, and may continue after meeting the legal requirements.
إذا كان وجود الشركة الأجنبية في المملكة من أجل تنفيذ أعمال معينة وخلال مدة محددة، فتقيد لدى السجل التجاري بصورة مؤقتة وينتهي قيدها بانتهاء تلك الأعمال وتنفيذها،
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.