Article 1 of the Saudi Finance Companies Control Law
المادة 1 من نظام مراقبة شركات التمويل
The article defines the key terms in the Finance Companies Control Law, such as finance company, beneficiary, consumer, license and finance.
Official text (Arabic)
This article has not been amended since the law was issued.
يقصد بالألفاظ والعبارات الآتية - أينما وردت في هذا النظام - المعاني المبينة أمام كل منها، ما لم يقتضِ السياق خلاف ذلك:
النظام : نظام مراقبة شركات التمويل.
اللائحة : اللائحة التنفيذية لهذا النظام.
المؤسسة : مؤسسة النقد العربي السعودي.
المحافظ : محافظ مؤسسة النقد العربي السعودي.
شركة التمويل : الشركة المساهمة الحاصلة على ترخيص لممارسة نشاط التمويل.
المستفيد : الشخص الحاصل على التمويل.
المستهلك : من توجه له خدمات شركات التمويل.
الترخيص : التصريح الذي تصدره المؤسسة لشركة ما بممارسة نشاط التمويل.
التمويل : منح الائتمان بعقود للأنشطة المنصوص عليها في هذا النظام.
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 1 explained in plain English
This article is the definitions article; it explains what is meant by the words that recur in the Law, so that they are understood in the same sense wherever they appear, unless the context requires another meaning.
The most important terms it defines:
- The Law: the Finance Companies Control Law, and the Regulations: its Implementing Regulations.
- SAMA: the Saudi Arabian Monetary Agency, and the Governor: its Governor.
- Finance company: a joint-stock company that has obtained a license to carry on finance activity; so under this definition no other form of company is enough.
- Beneficiary: the person who has actually obtained finance.
- Consumer: anyone to whom the services of finance companies are directed, even if he has not yet obtained finance, so it is wider than the beneficiary.
- License: the permit SAMA issues to a company to carry on finance activity.
- Finance: granting credit by contracts for the activities provided for in the Law.
These definitions matter when reading the rest of the articles; for example, Article 2 provides that the Law applies to finance companies licensed under its provisions, and the meaning of "finance company" there is the meaning given in this article.
If you need to know whether your situation or your business falls within these definitions, it is advisable to consult a lawyer who specializes in banking and finance.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 1 of the Saudi Finance Companies Control Law
Who is the beneficiary in the Finance Companies Control Law?
The beneficiary is the person who has obtained finance.
What is the difference between the beneficiary and the consumer?
The beneficiary is the one who has obtained finance, while the consumer is anyone to whom the services of finance companies are directed, so it includes someone who has not yet obtained finance.
Can a finance company be a limited liability company?
The article defines a finance company as a joint-stock company that has obtained a license to carry on finance activity.
More articles on Definitions and Scope of the Finance Law
- Article 2
The article defines the scope of the Law: it applies to finance companies licensed under its provisions.
يسري هذا النظام على شركات التمويل التي يرخص لها وفقاً لأحكامه.
- Article 3
The article requires licensed finance companies to carry on finance in a way that does not conflict with Islamic Sharia, according to Sharia committees they choose, and without undermining the soundness of the financial system and fairness of dealings.
تزاول الشركات - المرخص لها بموجب هذا النظام - أعمال التمويل بما لا يتعارض مع أحكام الشريعة الإسلامية، بناءً على ما تقرره لجان شرعية تختار أعضاءها تلك الشركات، و
- Article 36
The article gives companies and entities that carried on finance in the Kingdom before the Law took effect a two-year period to regularize their status in line with its provisions.
تمنح الشركات والمؤسسات العاملة التي تزاول نشاط التمويل في المملكة قبل سريان هذا النظام مهلة سنتين لتسوية أوضاعها وفق أحكام هذا النظام.
- Article 37
The article makes the Zakat and Income Authority the body that issues the criteria needed to calculate the zakat base of finance companies.
تصدر مصلحة الزكاة والدخل المعايير اللازمة لاحتساب الوعاء الزكوي لشركات التمويل.
- Article 38
The article provides that the Finance Companies Control Law repeals any provisions that conflict with it.
يلغي هذا النظام كل ما يتعارض معه من أحكام.
- Article 39
The article requires the Governor to issue the Implementing Regulations within ninety days of the date the Law is issued, to be applied after the Law takes effect.
يصدر المحافظ اللائحة خلال تسعين يوماً من تاريخ صدور النظام، ويعمل بها بعد نفاذه.
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.