Regulatory Alerts2017-12-06
Requirements for Establishment of Institutions and Companies and Cancellation of the Requirement for Official Stamp
The Saudi Arabian Monetary Authority mandates all operating banks to strictly enforce commercial registration requirements and actively open bank accounts for specified entities, while permanently prohibiting the opening of "under establishment" accounts. The circular further waives the official stamp requirement on documents and papers submitted for banking transactions, directing banks to proactively inform clients of this exemption. Non-compliant institutions will face applicable regulatory enforcement actions.
In the Name of Allah, the Most Gracious, the Most Merciful
Saudi Arabian Monetary Authority Head Office
Banking Policy Department
Ref. No.: Date: 1439/03/18 Attachments:
Circular
To: [Name/Title]
Greetings,
Subject: Procedures for the Establishment of Institutions and Companies and Cancellation of the Official Stamp Requirement.
In continuation of the Authority's Circular No. 381000053455 dated 17/05/1438 regarding the Ministry of Commerce and Investment's procedures for establishing all types of institutions and companies, and the conditions and requirements for obtaining a commercial registration and memorandum of association, and Circular No. 381000053456 dated 17/05/1438 regarding the cancellation of the official stamp requirement for institutions and companies on documents and papers submitted during banking transactions,
We wish to inform you that the Authority has noted non-compliance by some banks with the instructions contained in the aforementioned circulars. Therefore, the Authority confirms that all operating banks must comply with their provisions, adhering to the following:
First: The requirement of a commercial registration for the purpose of opening a bank account for an establishment, which must be active (complete), and the final non-opening of accounts under establishment, for the following companies and institutions:
- Limited liability companies (local, Gulf, foreign, mixed) established within the Kingdom.
- General partnerships and professional companies.
- Limited partnerships (commandite).
- Sole proprietorships/individual establishments.
Second: The non-requirement of an official stamp for institutions and companies on documents and papers submitted when opening accounts or conducting banking transactions.
Third: Raising customer awareness regarding the non-need for an official stamp on papers submitted to open accounts or conduct banking transactions.
For your information, and the Authority will apply necessary regulatory procedures in case of non-compliance.
Yours sincerely,
Ahmed bin Abdullah Al-Sheikh Deputy Governor for Supervision
Distribution Scope:
- Banking Supervision Department.
- Operating banks in the Kingdom.
P.O. Box 2992, Riyadh 11169, Telegram Address: Markazi, Telex: 404400, Phone: 4633000, Fax: 4662414