The National Program to Combat Front Companies confirmed that it will continue to rectify the situations of all applicants who have submitted requests for correction to take advantage of the rectification period until its conclusion on August 23, 2021, regardless of the size, income, or commercial activity of the business.
The program announced that it is easing the requirements for beneficiaries of the rectification period by lowering the annual revenue requirement for businesses from 40 million to 10 million Saudi riyals, and extending the deadline for raising the required capital for restricted activities from 3 to 5 years.
His Excellency the Minister of Investment, Engineer Khalid bin Abdulaziz Al-Falih, has approved the implementation of these requirements, effective as of yesterday, Sunday, for businesses undergoing the adjustment period through an investment license based on an agreement between a Saudi and a non-Saudi partner regarding the partnership in the business or by registering the business under a non- non-Saudi.
The program confirmed that the rectification process will continue with all other appropriate options for establishments of all sizes and sectors, including the Saudi national continuing to conduct economic activity by bringing in a new partner to the establishment, the Saudi owner retaining ownership of the business, a non-Saudi obtaining a special residency permit, or the non-Saudi permanently leaving the Kingdom.
The program allows those wishing to rectify their status—whose businesses do not meet the aforementioned size requirements—to do so by having the non-Saudi obtain a special residency permit.
According to the updated requirements of the regulations for rectifying the status of violators of the Anti-Fronting Law, beneficiaries undergoing the rectification period through the Ministry of Investment are exempt from the requirement that the beneficiary establishment have an international presence, provided that a number of conditions and requirements are met, including that the facility seeking regularization have 50 or more employees or that the facility’s revenue for the last fiscal year be 10 million riyals or more, that the entity be registered in the Commercial Register prior to the start of the rectification campaign, that the foreign partner be a resident of the Kingdom prior to the start of the rectification period, and that the foreign partner’s employer has no objection.
The National Program to Combat Fronting has renewed its call to all those wishing to rectify their status to take advantage of this opportunity by submitting a rectification request to the Ministry of Commerce before the end of the rectification period on August 23, 2021, and to benefit from the advantages stipulated in the regulations, which include exemption from the penalties prescribed by law and any resulting additional penalties, as well as retroactive exemption from income tax, in order to ensure that economic activities are conducted in accordance with the law.
The correction process can be completed through various options available on the Ministry of Commerce’s website: mc.gov.sa.