Saudi Arabia debt collection that gets results, fast.
Our “People-First” approach can help you recover more funds, in less time, anywhere in the world. Whether your claim is large or small, consumer or commercial, new or old, we can help.
Find out why Fortune 50 companies are choosing Cedar Financial as their International Debt Collection partner. Get an instant quote today.
Top Challenges in Saudi Arabia Debt Recovery
Experts rank Saudi Arabia as severe in collections complexity for factors such as payments, court proceedings, and insolvency law. Here are the main challenges to watch out for.
Late Payments Common, Constant Follow Up May Be Required
Saudi Arabian law does not regulate late payments, and while most payment terms are for 30 days, debtors often attempt to negotiate, trying to get a discount in exchange for timely payment. As a result, the average payment time is extended to 90 days or longer, and creditors may be forced to follow up frequently in order to get results.
You can help ensure timely payment and reduce delays and avoidance tactics by hiring a trusted third-party collection agency like Cedar Financial to follow up with reluctant debtors and address any disputes quickly and efficiently.
Learn more about how Cedar Financial addresses disputes and encourages faster payment of your claims: Contact Us today.
Shari’ah Law Prohibits Statutory Interest, Collections Fees and Legal Costs, Making Litigation Expensive
Interest added to late payments is prohibited by Shari’ah law, and collections fees may not be added without a signed agreement on file – even then, it must be carefully drafted to be acceptable.
Without an agreement, legal fees and costs associated with enforcement may also not be recoverable, making legal action in Saudi Arabia a costly affair for creditors.
It’s important to pursue amicable collections to exhaustion before considering legal action. If the debtor agrees, arbitration can also be a much quicker, low-cost, enforceable alternative to litigation.
Cedar Financial can help you maximize amicable collections to get paid faster and minimize costs. If legal action is required, our vigorous file vetting process will help you determine whether it is worthwhile to go legal on your claims.
For more information about our legal file vetting process, talk to one of our credit risk specialists today: 818-224-3800.
Poor Record-Keeping, Little Info Available
Financial information for private companies is not available on third-party sources and record-keeping is generally poor by international standards. Additional investigation, such as in-person visits, may be required.
With local collectors on the ground in Saudi Arabia, Cedar Financial can help you locate your debtor, even if they are playing hard-to-get. We also offer investigative reports, if needed. Contact Us for a sample report today.
Litigation in Saudi Arabia
The Saudi Arabian legal system courts of first instance are the Shari’ah Courts, followed by the Court of Cassation and Supreme Judicial Council. The 2007 reforms established a Supreme Court and Board of Grievances, which deals with disputes in governmental, commercial, administrative, insurance and employment sectors.
Once all amicable efforts are exhausted, to begin legal proceedings, you will need to file a claim with the Board of Grievances. The Board invites all parties to a hearing to consider arguments and evidence to make a decision.
Note on Enforcement Law: If you have bounced checks or late payments are secured by a promissory note, you can instead apply directly to an enforcement judge without having to file a claim.
To file a claim with the Board, you will need copies of the registrations of the creditor and debtor, power of attorney, and documentary evidence, including: the contract, authority of the individuals who signed the contract, invoices, and any correspondence.
There is no statute of limitations for general claims.
Once a decision is made, it may be appealed in the Court of Appeals within 30 days.
Quick Facts About Debt Collection in Saudi Arabia
Open Invoices
| Unpaid Invoice Interest Rate | Late payment interest prohibited by Shari’ah Law. |
| Can Collection Fees be added? | Cannot be added without a signed agreement, must strictly conform to Shari’ah Law. |
| Statute of Limitations/Prescription | None for general claims, not defined by Shari-ah Law |
Quick Facts About Litigation in Saudi Arabia
Judgment
| Post Judgment Interest Rate | Interest prohibited by Shari’ah Law. |
| Judgment Expiration | Initial judgment valid for 30 days if no objection. Final judgment issued has no expiration. |
| Can judgment be renewed? | n/a |
Local Experts in Collections
We offer on-the-ground representatives in Saudi Arabia who understand the processes and debt collection practices that work to support full recovery of your funds.
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FAQs About Debt Collection in Saudi Arabia
We are familiar with local laws and customs, and employ a number of different divisions to connect you to the right debt collection service so you can recover your debt quickly.
We can work on consumer (bank) accounts on a contingency basis. Our pre-legal debt collection services are on a “no win, no fee” basis, so you don’t pay until we collect.
We have no minimum value or volume that is required to place accounts.
We service consumer and commercial debts.
Normal debt collection proceedings can take up to one year.
We start with an initial investigation into the debtor’s registration and credit information. Phone calls, demand letters, emails and sometimes faxes are then sent out. If the debt is disputed, we request proof from the debtor to send to the creditor. If the debtor cannot be contacted, our Tracing Center will carry out an address and phone search. We also request a face to face meeting if necessary. If all efforts do not lead to payment, we may suggest a legal filing.
There is no statutory law, Shari’ah law or time limit for bringing commercial claims in Saudi Arabia. Saudi Arabian law is silent on the issue of parties contractually agreeing to set time limits.
Yes, we provide on-the-ground representatives to visit your debtor in person at their location for trace and contact evasive debtors, and investigate assets for potential legal action.
Yes, of course. We need all the relevant documents about the case, which includes invoices, the debtor’s information and other supporting documents.
Yes, we can litigate. Filing a case in Saudi Arabia requires a notarized Power of Attorney from the creditor. The required attorney fees and costs differ from case to case, depending on several variables, such as the amount of the claim, the agreement between the parties and the relevant court fee. All cases are monitored for conflict of interest after a study and review of the file. A travel ban can be transferred or implemented in Saudi Arabia, but the conditions vary in each case.
Collection fees may not be added without a signed agreement on file and must be carefully drafted to be acceptable under Shari’ah Law.
* The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.
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