Article 11 of the Saudi Investment Law

This article sets out the penalty for breaching Articles 7 and 8, that is, the foreign investor's duty to register with the Ministry before investing, and its duty to seek approval before investing in an activity on the list of excluded activities or before a change of ownership in a restricted activity.

First – a non-serious breach: the Ministry notifies the investor, by any means it determines, to remedy the breach within a period set by the Implementing Regulations.

Second – the penalties: these apply in two cases: where a non-serious breach is not remedied after the period ends, or where a serious breach is committed. The investor is punished with one or more of the following:

• A warning.
• A fine of up to SAR 300,000, which may be doubled if the breach is repeated.
• Cancellation of registration.

This is without prejudice to any more severe penalty provided for in another law. The Implementing Regulations determine what counts as a serious breach and the procedures for recording breaches.

Third – the committee: the Minister, by decision, forms one or more committees of not fewer than 3 members, including at least one specialist in laws, to consider breaches and impose penalties. In setting the penalty, they take into account the seriousness of the breach, its repetition and the size of the establishment. The Implementing Regulations set the rules of their work, and the Minister determines the members' remuneration.

Whoever has a penalty decision issued against them may, under Article 12, challenge it before the competent court within 30 days of being notified. In that case it is advisable to consult a lawyer who specializes in foreign investment and commercial matters.