Article 26 of the Saudi Finance Companies Control Law
المادة 26 من نظام مراقبة شركات التمويل
The article requires a finance company to obtain SAMA's approval to open a branch, agency or office inside or outside the Kingdom, or to close any of them.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على شركة التمويل الحصول على موافقة المؤسسة عند فتح فرع، أو وكالة، أو مكتب داخل المملكة أو خارجها، أو إغلاق أي منها.
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 26 explained in plain English
This article regulates a finance company's geographic spread. The company must obtain SAMA's approval in the following cases:
- Opening a branch.
- Opening an agency.
- Opening an office.
- Closing any of them.
This includes those inside the Kingdom or outside it, so the ruling is no different between the two cases.
Note that approval is required for closing as it is for opening, because closing a branch may affect the customers who deal with it.
It is preceded by Article 25, which requires SAMA's approval to amend the company's capital or articles or for merger or acquisition. It is followed by Article 27, which requires the company to appoint one or more licensed external auditors. These articles show that SAMA follows fundamental changes in the company's structure and spread.
The article did not specify the procedures for requesting approval or its duration.
Companies planning to expand or restructure can consult a lawyer who specializes in banking and finance.
Practical example
A finance company based in Jeddah wanted to open a new branch in Tabuk and close a small office in Taif. It must obtain SAMA's approval in both cases: opening the branch and closing the office.
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 contentBanking, Finance & Securities lawyers: ask a specialist about your case
Describe your situation briefly and we'll suggest a lawyer who specialises in this law
Banking, Finance & Securities lawyers
Lawyers who handle this kind of case
Dr. Ali Al-Rubaie Law Office and Ittihad Al-Asr Legal Company
Dr. Saleh Altayyar & Partners Law Firm
Frequently asked questions about Article 26 of the Saudi Finance Companies Control Law
May a finance company open a branch without approval?
No. It must obtain SAMA's approval to open a branch, agency or office inside or outside the Kingdom.
Does closing a finance company branch need approval?
Yes. The article requires SAMA's approval to close any branch, agency or office.
More articles on Financial Solvency of Finance Companies
- Article 13
The article requires a finance company to set aside a provision to meet potential operating losses according to the standards the Regulations specify.
على شركة التمويل أن تضع مخصصًا لمواجهة خسائر التشغيل المحتملة وفق المعايير التي تحددها اللائحة.
- Article 14
The article allows a finance company to issue securities and sukuk under the Capital Market Law and its regulations, in proportion to its assets and financial position and without prejudice to Article 3.
مع عدم الإخلال بما ورد في المادة (الثالثة) من هـذا النظام؛ يجـوز لشـركـة التمويـل - وفق ما تحدده اللائحة وبما يتناسب مع أصولها ومركزها المالي - إصدار الأوراق ال
- Article 22
The article lists subjects the Regulations organize, including finance limits, security ratios, disclosure of the cost of finance, consumer protection, advance payments and debt collection.
تنظم اللائحة ما يأتي: 1- الحد الأعلى لمجموع التمويل الذي يجوز لشركة التمويل تقديمه. 2- منع شركة التمويل من إجراء تعاملات ائتمانية معينة، أو تقيـيـدها في ذلك. 3-
- Article 23
The article requires a finance company to comply with the capital adequacy ratio rules as the Regulations specify.
يجب على شركة التمويل أن تتقيد بقواعد معدل كفاية رأس المال وفقًا لما تحدده اللائحة.
- Article 24
The article requires a finance company to diversify the risks of its activity and bars it from financing a single establishment or a group of interconnected ownership beyond the percentage the Regulations specify.
يجب على شركة التمويل تنويع مخاطر نشاطها، ولا يجوز أن تمنح تمويلاً لمنشأة واحدة أو لمجموعة مترابطة الملكية بما يتجاوز النسبة التي تحددها اللائحة.
- Article 25
The article requires SAMA's approval to amend a finance company's capital or articles, or for its merger into or acquisition of a similar company, subject to other laws.
مع مراعاة ما تقضي به الأنظمة؛ يجب الحصول على موافقة المؤسسة لتعديل رأس مال شركة التمويل، أو تعديل نظامها، أو اندماجها في شركة مماثلة، أو استحواذها عليها.
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.