1. Islamic Law
2. Islamic Contract Law
3. Statute Law
4. Investing in Saudi Arabia
5. Other Forms of Doing Business
6. Companies and Partnerships
7. Doing Business with Saudi Arabia
8. Competition Law
9. Electronic Transactions
10. Taxation
11. Banking
12. Capital Markets
13. Mergers and Acquisitions
14. Insurance
15. Real Estate
16. Intellectual Property
17. Employment Law
18. Environmental Laws
19. Dispute Resolution
20. Sovereign Immunity



Currently Saudi Arabian income tax is not applicable to expatriate workers. Saudi Arabian citizens pay a religious tax (zakat) which is 2½% of the individual’s net worth. There are no statutory deductions from the employee’s wages, except for pension contributions in the amount of 5% for employees of Saudi Arabian nationality only.
Profits accruing to foreign investors are subject to income tax, which is regulated under the Income Tax Regulation, Royal Decree No. M/1 of 15th Muharram 1425 Hejra corresponding to 7th March 2004 Gregorian. Most types of business are taxed at a flat rate of 20% of profits. Net operating losses may be carried forward from one year to the next. The loss which has been carried forward may be deducted from the tax base of future taxable years until the cumulative loss is fully offset.

Payments to a non-resident with no permanent establishment in Saudi Arabia for any amount realized from a source in the Kingdom are subject to withholding tax at the following percentages of the gross payment:

Type of payment   Rate  
01. Management fees   20%  
02. Royalties or proceeds; payments for services to a headoffice or related company   15%  
03. Payments for rent; payments for technical and consulting services; payments for air tickets, air freight and maritime freight; payments for international telecommunications services; dividends; loan charges; insurance or reinsurance premiums   5%  
04. Other payments   15%  

* This Saudi Arabian Law Overview is not intended to be legal advice, and cannot be relied on as a substitute for legal advice. We make no representation that the contents of this Saudi Arabian Law Overview are or will remain accurate or current.
Copyright © Hatem Abbas Ghazzawi & Co.


Chambers Global 2017

  " They have a very good understanding of the local market. Their team is strong and diversified and they have an understanding of international topics and cases."
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IFLR 1000, 2017 edition


“They are smart, responsive and thoughtful. Absolutely our go-to firm in the Kingdom, as they have been for over 15 years,” says one.

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  European Legal 500,
2017 edition

The firm is a popular choice for financial and commercial disputes, and regularly acts for international banks. Ongoing cases include representing certificate holders claiming for sukuk defaults worth in excess of $500m in connection with outstanding loan repayments.
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