Saudi Arabia’s New Enforcement Law: What Creditors and Businesses Need to Know

August 2026 – Commercial Law – Saudi Arabia

On 20 April 2026, Saudi Arabia enacted one of the most significant overhauls of its civil enforcement framework in decades. Royal Decree No. M/237, issued pursuant to Council of Ministers Resolution No. 746, introduces a new Enforcement Law that replaces the previous framework in its entirety. The new law enters into force 180 days after publication in the Official Gazette – making the effective date 28 October 2026.

The reform is structural, not incremental. It fundamentally reorients Saudi enforcement away from pressure on the debtor’s person – principally imprisonment for debt – toward systematic tracing, disclosure, and seizure of the debtor’s assets. Timelines are compressed. Asset disclosure obligations are expanded. Third parties, including banks, registries, and government bodies, are now legally compelled to respond to enforcement court orders. Penalties for obstruction and concealment are severe, including imprisonment of up to fifteen years for deliberate dissipation of substantial assets.

For creditors, the law materially improves the prospects of recovery. For businesses operating in the Kingdom – as borrowers, guarantors, counterparties, or commercial paper issuers – it creates new and immediate obligations. This guide sets out the key changes, the practical implications, and what businesses must do before the law enters into force in October 2026.

Background: Why the 2012 Law Was Replaced

Saudi Arabia’s previous enforcement framework was issued under Royal Decree No. M/53 dated 2012. Over the intervening fourteen years, enforcement proceedings in the Kingdom became associated with significant delays, procedural gaps, and a heavy reliance on imprisonment as the primary mechanism for compelling debtor compliance. Debtors could shield assets by transferring them to relatives, affiliated entities, or intermediaries with limited judicial recourse for creditors.

The new law reflects the broader reform agenda of Vision 2030, which identifies a functioning, predictable enforcement regime as a prerequisite for attracting foreign investment, deepening capital markets, and improving Saudi Arabia’s standing in international business competitiveness rankings. The overhaul was publicly announced on 13 April 2026 by the Ministry of Justice, which described the reform as enhancing transparency, accelerating recovery timelines, and shifting the enforcement paradigm toward asset-based execution.

Key Change 1: Enforceable Instruments – What Qualifies Now

The new law tightens and restructures the categories of instruments that may be directly enforced without a separate court judgment. Only the following instruments qualify as enforcement documents:

• Final court judgments and orders
• Decisions and orders of committees with quasi-judicial mandates
• Domestic arbitral awards
• Foreign judicial judgments, arbitral awards, and settlement agreements that meet the conditions of Article 9
• Notarised instruments and notarised settlement agreements
• Cheques
• Bills of exchange and electronically registered promissory notes
• Contracts and instruments designated as enforcement instruments by statute or Council of Ministers resolution

Two categories are particularly important for businesses to note.

Promissory Notes: Electronic Registration Now Required

Under the previous framework, a physical promissory note could be directly enforced. The new law restricts direct enforceability to electronically registered promissory notes only. Ordinary physical promissory notes that are not electronically registered will no longer be directly enforceable as of the effective date.

A one-year transitional period applies: bills of exchange and promissory notes issued before 28 October 2026 remain directly enforceable for twelve months from that date, even if unregistered. After the transitional period expires, unregistered instruments lose their direct enforceability.

Action required: Businesses that use promissory notes as credit or security instruments must review their existing portfolio immediately. Unregistered notes should be electronically registered before 28 October 2026 or before the one-year transitional period expires.

Acknowledged Documents Abolished

The category of ‘ordinary acknowledged documents’ – which previously allowed straightforward enforcement of acknowledged debts – has been abolished and replaced with authenticated instruments. Businesses that relied on simple acknowledgment letters or informal debt acknowledgments as enforcement instruments must replace these with notarised documents before the law enters into force.

Key Change 2: Compressed Enforcement Timelines

The new law introduces strict, automated response deadlines at every stage of the enforcement process. The compression is material:

For businesses on the debtor side, five working days from notification to compliance is a demanding timeframe. Directors and compliance officers must treat enforcement orders as immediate operational emergencies, not legal correspondence to be routed through standard review cycles.

For businesses on the creditor side, the compressed timeline materially accelerates recovery. The three-working-day response obligation for banks and registries means that asset freezing and disclosure can be completed in days rather than months.

Key Change 3: Asset Disclosure – A Fundamental Expansion

Asset disclosure is the centrepiece of the new enforcement regime. The new law replaces the previous person-based enforcement model with a systematic, asset-focused approach.

Debtor Disclosure Obligation

Upon being notified of an enforcement order, the debtor is required to disclose all assets to the enforcement court. This is not a discretionary or negotiable obligation – it is immediate, mandatory, and failure to comply is a criminal offence.

Third-Party Disclosure

Where the enforcement court has indications that the debtor is concealing or transferring assets, it may order disclosure from:

• The debtor’s agents and employees
• The debtor’s financial counterparties, including banks and lenders
• Entities that owe money to the debtor
• Persons suspected of colluding with the debtor or receiving preferential transfers
• Relatives – a new and explicit extension that closes the long-standing family asset-shielding loophole

The court may also engage licensed private-sector asset tracing providers to conduct investigations. Attachment may extend to present and future assets, including receivables owed by public entities.

Voidance of Pre-Attachment Transactions

The new law introduces formal voidance mechanisms for transactions designed to frustrate enforcement. Gifts, early repayments to affiliated creditors, and unusual transactions made before attachment can be challenged and voided by the enforcement court. Post-attachment disposals are treated more severely – as criminal acts.

Key Change 4: Imprisonment Abolished for General Debt – But Not for Evasion

One of the most publicly noted changes is the abolition of imprisonment as a coercive tool for general civil financial obligations. Under the previous framework, a debtor could be imprisoned as a means of compelling payment. The new law ends this.

However, imprisonment has not been removed from the enforcement toolkit entirely. It has been repositioned: imprisonment is now reserved as a measure of last resort after asset-based enforcement steps have been exhausted, and it is used only where the debtor has deliberately obstructed enforcement.

Criminal penalties under the new law are significant:

The fifteen-year imprisonment provision for deliberate dissipation of substantial assets is a significant deterrent. It applies even where the debtor subsequently proves insolvency – meaning that demonstrating inability to pay is not a defence if assets were deliberately transferred or concealed.

Key Change 5: Foreign Judgments and Arbitral Awards – Article 9

Article 9 of the new law restructures the framework for enforcing foreign court judgments, foreign arbitral awards, and foreign settlement agreements in Saudi Arabia. The new framework:

• Expressly recognises a broader category of foreign instruments as enforceable
• Narrows the historical jurisdictional barriers that previously complicated foreign judgment enforcement
• Requires the foreign judgment to be final in the originating jurisdiction
• Requires assessment of reciprocity – Saudi judgments must be enforceable in the country of origin
• Requires a sworn Arabic translation and a completed legalisation chain (apostille or consular)
• Applications must be filed through the Najiz portal or court registry with a notarised power of attorney for Saudi counsel

For multinational businesses and international creditors with Saudi debtors, Article 9 materially improves the practicality of cross-border enforcement. The historical uncertainty around reciprocity and jurisdictional grounds for refusal has been significantly reduced, though not eliminated.

Note: Enforcement of foreign judgments in Saudi Arabia remains subject to conditions, including the absence of a conflicting Saudi judgment, compliance with public policy, and procedural requirements. Each case must be assessed individually.

Key Change 6: Reverse Enforcement

The new law introduces a mechanism not previously available: reverse enforcement. Where a creditor refuses to accept performance of a debt that is due and established under an enforcement instrument, the debtor may apply to the enforcement court. The court will order the creditor to accept the performance. If the creditor still refuses, the court will record that fact and take measures to discharge the debtor’s liability. Costs of this process are treated as enforcement expenses.

This provision is designed to address cases where creditors use enforcement proceedings as leverage beyond legitimate debt recovery – for example, refusing to accept payment in order to maintain pressure or accumulate fees. The balanced approach reflects the law’s stated objective of protecting both creditor and debtor rights.

Key Change 7: Travel Bans – Clearer Rules

The previous framework allowed travel bans to be imposed broadly and without clearly defined duration. The new law regulates travel bans with specific controls: they must be linked to defined durations and meet stated standards. Open-ended travel restrictions are no longer permissible under the new framework.

Digital Enforcement: The Najiz Platform

The new law is accompanied by a comprehensive digital enforcement infrastructure. Enforcement applications are filed electronically through the Ministry of Justice’s Najiz platform. Court notifications, asset disclosure requests, and coordination with banks, registries, and government agencies are conducted digitally. Physical filing and paper-based correspondence are being replaced throughout the enforcement process.

For businesses that need to file enforcement applications or respond to them, operational readiness for digital enforcement – including access to the Najiz platform and familiarity with electronic filing requirements – is now a practical compliance requirement.

What Businesses Must Do Before 28 October 2026

• Audit your promissory note portfolio. Any promissory note you hold as a creditor or have issued as a debtor that is not electronically registered must be reviewed immediately. Register notes on the relevant electronic platform before 28 October 2026 if you intend to rely on them as enforcement instruments. The one-year transitional period provides a buffer, but acting before the effective date is strongly advisable.
• Replace acknowledged documents with notarised instruments. The category of ordinary acknowledged documents has been abolished. Any debt acknowledgment or instrument in this category must be replaced with a notarised document before the law enters into force.
• Retrain legal and finance teams on the new timelines. Five working days to comply with an enforcement order is not a legal timeline – it is an operational one. Internal escalation procedures must be updated so that enforcement orders trigger immediate management attention, not routine processing.
• Review financing and guarantee documentation. Loan agreements, guarantee arrangements, and security documents should be reviewed to confirm they qualify as enforcement instruments under the new framework. Documents that relied on the old acknowledged document category must be restructured.
• Assess your position on foreign judgment enforcement. If you have judgments or arbitral awards from foreign jurisdictions against Saudi counterparties, assess enforcement prospects under Article 9. Ensure your documentation is complete: final judgment certificate, sworn Arabic translation, apostille or consular legalisation, and a notarised power of attorney for Saudi counsel.
• Prepare for third-party disclosure obligations. Banks, financial institutions, and businesses that may hold assets of a debtor or be subject to third-party disclosure orders should update internal protocols for responding to enforcement court requests within three working days.
• Register on the Najiz platform. Businesses that anticipate filing or responding to enforcement applications should ensure they have access to the Najiz portal and understand the electronic filing procedures before the effective date.

Frequently Asked Questions

When exactly does the new Enforcement Law enter into force?

The new Enforcement Law (Royal Decree No. M/237) was enacted on 20 April 2026 and enters into force 180 days after publication in the Official Gazette, which places the effective date at 28 October 2026. The Minister of Justice is required to issue implementing regulations within the same 180-day period.

Does the abolition of imprisonment for debt mean debtors face no personal liability?

No. The abolition applies to imprisonment as a general coercive tool for civil financial obligations. Criminal imprisonment of up to fifteen years remains available for deliberate dissipation of substantial assets, and imprisonment of up to three years applies for concealment of assets, obstruction of enforcement, refusing to disclose assets, and dealing with frozen assets. The law removes routine debt imprisonment but significantly strengthens criminal penalties for deliberate evasion.

We hold physical promissory notes from Saudi counterparties. Are they still valid?

Physical promissory notes issued before 28 October 2026 remain directly enforceable for one year from that date under the transitional provisions. After the transitional period expires, only electronically registered promissory notes are directly enforceable. You should register your notes on the relevant electronic platform promptly and before the transitional period expires.

We have a foreign court judgment against a Saudi entity. Can we enforce it under the new law?

Article 9 of the new Enforcement Law provides a framework for enforcing foreign judicial judgments and arbitral awards in Saudi Arabia. The judgment must be final in the originating jurisdiction, reciprocity must be established, and the procedural requirements – including sworn Arabic translation, legalisation, and Saudi counsel – must be met. Article 9 improves the position for foreign creditors compared to the previous framework, but individual assessment of each case remains essential.

Our company was named in a third-party disclosure order. What must we do?

Third parties named in an enforcement court disclosure order must respond within three working days. Failure to respond or providing false information is a criminal offence under Articles 50-56 of the new law, punishable by imprisonment of up to three years and/or a fine of up to SAR 1,000,000. Immediate engagement of legal counsel is advisable upon receipt of any such order.

Does the new law affect enforcement of domestic arbitral awards?

Yes. Domestic arbitral awards remain enforcement instruments under the new law. The enforcement process for awards – including filing through the Najiz platform, the five-working-day debtor response period, and the asset disclosure regime – applies to arbitral awards in the same way as court judgments. Parties to Saudi arbitration proceedings should factor the new enforcement framework into their dispute resolution strategy.

How TME Legal Can Assist

TME Legal advises businesses, creditors, and investors on Saudi Arabian commercial law, including enforcement strategy and debt recovery. Our work in this area includes:

• Assessment of existing enforcement instruments and advice on registration and notarisation requirements before the effective date
• Review of financing, guarantee, and security documentation against the requirements of the new Enforcement Law
• Advice on foreign judgment and arbitral award enforcement under Article 9, including procedural requirements and reciprocity assessment
• Guidance for banks and financial institutions on third-party disclosure obligations and internal response protocols
• Representation in enforcement proceedings before Saudi Enforcement Courts
• Advice on asset tracing strategy, voidance of pre-attachment transactions, and creditor recovery options
• Training for legal, finance, and compliance teams on the new enforcement framework and timelines

If you would like to assess your position under the new Enforcement Law or discuss your enforcement strategy in Saudi Arabia, we would be glad to assist.

This article is provided for general information only and does not constitute legal advice. Royal Decree No. M/237 enters into force on 28 October 2026 and its implementing regulations are pending. Please contact TME Legal for advice tailored to your individual circumstances.