Article 6 of the Saudi Finance Companies Control Law
المادة 6 من نظام مراقبة شركات التمويل
The article requires a finance company to begin its activity within a year of the license and bars it from stopping for more than three consecutive months except with SAMA's approval.
Official text (Arabic)
This article has not been amended since the law was issued.
يجب على شركة التمويل البدء في ممارسة نشاطها خلال مدة أقصاها سنة من تاريخ حصولها على الترخيص، ولا يجوز لها بعد ممارسة نشاطها التوقف مدة متصلة تزيد على (ثلاثة) أشهر إلا بموافقة المؤسسة، وتحدد اللائحة الضوابط اللازمة لذلك.
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 6 explained in plain English
This article places two time limits on a licensed finance company:
- Beginning activity: the company must begin carrying on its activity within a maximum of one year from the date it obtains the license.
- No stopping: after it begins its activity, it may not stop for a consecutive period exceeding three months except with SAMA's approval.
The evident aim is that a license is granted to someone who actually carries on the activity, not to remain idle. The article refers to the Regulations the setting of the necessary controls for this; it does not explain, for example, how approval for stopping is requested or what follows from exceeding the period, and one should not speculate on this without referring to the Regulations.
This article comes after Article 5, which shows that the license is issued after incorporation is complete and the commercial register is issued, and that its term is five years. It is followed by Article 7, which allows SAMA to cancel the license if the company provided false information or omitted material information.
If your company faces a circumstance that forces it to stop, it is advisable to consult a lawyer who specializes in banking and finance before taking the decision.
Practical example
A finance company in Khobar obtained its license and began its activity after eight months, which is within the one-year period. Two years later it needed to suspend its operations for four months to update its systems; it may not do so except after SAMA's approval, because the period exceeds three consecutive months.
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 6 of the Saudi Finance Companies Control Law
When must a finance company begin its activity?
Within a maximum of one year from the date it obtains the license.
May a finance company stop working?
After carrying on its activity, it may not stop for a consecutive period exceeding three months except with SAMA's approval, and the Regulations set the necessary controls.
More articles on Licensing Finance Companies
- Article 4
The article prohibits carrying on finance activities, or using anything indicating them, without a license, and excepts a person who finances the goods or services of his own establishments to his customers, as the Regulations provide.
1- تحظر مزاولة أي من نشاطات التمويل المحددة في هذا النظام إلا بعد الحصول على ترخيص بذلك وفق أحكام هذا النظام، أو الأنظمة المرعية الأخرى. 2- يحظر على أي شخص غير
- Article 5
The article sets the conditions and procedure for licensing a finance company, including a decision on the application within 60 days, a license term of five years, and offering a percentage of its ownership to the public.
أولاً : يقدم المؤسسون لشركة التمويل - أو من يمثلهم - طلب الترخيص إلى المؤسسة، ويشترط لإصدار الترخيص ما يأتي: 1- تقديم الهيكلة الإدارية للشركة ، ونظم تشغيلها، وخ
- Article 7
The article allows SAMA to cancel a finance company's license if it appears the company provided false information or omitted material information required for licensing.
يحق للمؤسسة إلغاء الترخيص إذا ظهر أن شركة التمويل زودت المؤسسة بمعلومات زائفة، أو أغفلت الإفصاح عن معلومات جوهرية كان يتعين عليها الإفصاح عنها لأغراض الترخيص وف
- Article 8
The article bars dealing in a finance company's founders' shares except with SAMA's approval, and requires whoever receives the shares to meet the founders' conditions in Article 5.
يحظر التصرف في أسهم التأسيس إلا بعد موافقة المؤسسة، ويشترط فيمن تنتقل إليه تلك الأسهم توافر المتطلبات والشروط الواردة في الفقرة (3) من البند (أولاً) من المادة (
- Article 9
The article provides that a finance company's license is considered ended if a liquidator is appointed for it or a judgment declaring its bankruptcy is issued.
يعد الترخيص منتهيًا إذا عين مصفٍ لشركة التمويل، أو صدر حكم بإشهار إفلاسها.
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.