Saudi Arabian Law Overview

The Unified Registry of Rights on Moveable Assets (“the Unified Register”), which was established in April 2020, serves as a way of protecting security rights over collateral and displaying them on public record. Anyone can view the Unified Register and procure information on published security rights over collateral, and abstracts of the Unified Register serve as an authorised means of proving someone has priority as a beneficiary over collateral.



The Movable Assets Security Regulation, issued pursuant to Royal Decree No M/94 of 15 Shaban 1441 Hejra (corresponding to 8 April 2020), and its Implementing Rules, issued by Minister of Commerce Resolution No 00312 of 19 Shaban 1441 Hejra (corresponding to 12 April 2020), govern the registration and safeguarding of security rights over the following:

1. commercial pledges;
2. the sale of moveable property that includes a condition for the restoration or redemption of it;
3. the transfer of ownership of moveable property for the purpose of security;
4. the sale of moveable property with a condition that the transfer of ownership of it shall be deferred until the price is paid over;
5. securities by assignment of right; and
6. sale of rights receivable.

Under the Moveable Assets Security Regulation any moveable property, even if intangible, may serve as collateral. This includes:

1. rights owed by third parties, whether immediate or deferred, including receivables;
2. accounts in credit with banks and other financial institutions, including deposit accounts and current accounts;
3. written bills of exchange transferable by delivery or endorsement, showing an entitlement to an amount of money or ownership of goods. This includes commercial papers, bank certificates of deposit, and bills of lading;
4. vehicles and the like;
5. work equipment and appliances;
6. stock;
7. animals and their produce;
8. agricultural produce;
9. real estate by incorporation (that is to say, moveable property that had to become affixed to land so that it could be used); and
10. trees and minerals.

For a security right to be deemed valid and effective under the law it must be in writing, whether as a separate contract or as part of another contract. The obligation that was secured must be described, with the maximum value of the secured obligation stated. The collateral must be described in a manner conducive to its identification and the guarantor must have the power to create the security right over the collateral. Additionally, the beneficiary must provide or be obliged to provide countervalue for the secured obligation.