Top-Rated Debt Collection Agency in Saudi Arabia
Fast and reliable debt collection in Saudi Arabia - no upfront costs, only pay for success. Request a FREE Consultation or upload your claim today.
Recovering your debt in Saudi Arabia is made easiest using this method.
Debitura specializes in debt collection services in Saudi Arabia with a team of proficient experts. Our services include accounts receivables management, debt collection notices, pre-legal and legal debt recovery, and enforcement court proceedings. We offer efficient and effective solutions to assist businesses in recovering outstanding debts, using our extensive knowledge in the Saudi Arabia debt collection laws and regulations.
We provide unwavering support from beginning to end.
Tailored collection approach.
We have 500+ experts available for handling international debt collection.
We have the lowest cost and maintain a 87% success rate.
14 Years of Experience Deena AlQumaish Attorney & Law Consultancy Firm provides a wide range of legal services and support in all aspects of the law to clients, be it local in the Kingdom Of Bahrain, regional or international. We practice in many fields such as personal injury, marriage disputes, crime and labor cases as well as complex contractual matters and mass tort litigation. Our clients include many of well known companies, corporations and individuals in the Kingdom Of Bahrain and the Middle East Region. Our legal team consists of individuals who are leaders in their field of expertise are proficient at providing creative and strategic solutions to our clients. We pledge continuity of our Pioneer-ship, to our values and integrity with our clients who shall enjoy quality legal support according to the high quality international and local standards. We operate in multiple countries.
Fahad Al-Tamimi Law Firm is a renowned legal services provider in Saudi Arabia, having some of the most experienced and trusted lawyers in the country. The firm provides comprehensive legal services across a wide range of areas, including commercial/corporate cases, debt collection, cybercrime, bankruptcy, fraud, local disputes and licenses.
The ultimate guide about debt collection in Saudi Arabia
Do you have money that someone else owes you from Saudi Arabia? We can help you get it back! We have helped many other businesses get money back that people owed them.
It can be very hard to get money back from someone who lives in another country. But it is easier when you use a collection agency that knows the laws and customs of that country.
At Debitura, we care about people. We want to help you get your money back while still having a good relationship with the person who owes you money. Our PR efforts are fair and firm. This means that we will work hard to make sure your reputation is not hurt. If you want to learn more about how to collect debt in Saudi Arabia, keep reading this guide. If you would rather work with a law firm that does this kind of work, we can help you find one.
Debitura is a company that helps you get your money back from people who owe you money. You can start by uploading your claim to our website. We will look at it and give you 3 free quotes from debt collection lawyers in Saudi Arabia within 24 hours. We use technology to help us manage our contacts and get the results we need. We also have a network of people who we work with closely, like debt collectors, attorneys, suppliers and vendors. We cherish these relationships because they help us get the job done.
Collect your debt in Saudi Arabia for free today by creating a free profile and uploading your case in just 2 minutes.
We use a pre-legal recovery process to try and collect your claim for the first 3 months. If we're unable to collect, you don't pay. It's that simple.
In case your claim remains unpaid in the pre-legal phase, we offer you three quotes from our nearby debt collection lawyers.
You get access to our online portal where you can track your case in real-time
Introduction to collecting debt in Saudi Arabia
Do you have trouble getting paid by your customers in Saudi Arabia? Don't worry, we can help you collect the money they owe you. The person who owes the debt is called the debtor, and the person who issued the debt or invoice is called the creditor. If the creditor collects the debt themselves, this is called first-party collection. If the creditor hires someone else to collect the debt, this is called third-party collections.
- In Saudi Arabia, it is common for people to not pay their bills on time. This is a problem because it is hard for businesses to get the money they are owed. The law does not protect businesses in this situation, so businesses have to try to get their customers to pay them back as soon as possible.
- It can take a long time for the legal system to work in your favor, and it might not even happen. This is because courts are not required to follow what has been done in the past and they have a lot of power to decide what happens. Also, there can be several weeks or months between each hearing, and the courts usually do not stick to time limits.
- The insolvency laws in the Middle East are not as good as other places. This means that it is hard to rescue a company that is failing financially.
Days Sales Outstanding (DSO)
People usually have 30 days to pay for something. But sometimes people have 60 days or even 120 days to pay. It is common in Saudi Arabia for people to not pay on time because of things like needing an original invoice with a company stamp. This means that, on average, people will pay their debts within 90 days. Sometimes people who owe money will try to get a discount if they pay the money right away. This is called negotiating. Creditors need to keep following up with debtors and rely on personal relationships to make sure they receive payments on time.
Common payment types in Saudi Arabia
Payment terms are 30 days on average, but large secured contracts may reach 60 days, while certain sectors would normally work on a 120-day basis. The DSO for listed companies has shown a trend increase over the past few years. However, as with all GCC states, late payment is common in Saudi Arabia where administrative obstacles are often put in the way of prompt payment (such as requirements for original invoices bearing the company stamp or multiple levels of approval of invoices within the debtor's organization). This means that, on average, people will pay their debts within 90 days. Sometimes people who owe money will try to get a discount if they pay it right away. This is called negotiating. Creditors need to constantly check in with people who owe them money and build personal relationships to make sure they get paid.
The main types of corporate structures are sole proprietorships, partnerships, limited liability companies (LLCs), and corporations
In Saudi Arabia, there are a lot of rules about trade. This means that the type of business you want to do will determine the kind of structure you need for your company. If you are a foreign investor, this will also influence whether or not you can own the entire company or if you need a Saudi partner. Some activities are completely forbidden for foreign investors. The types of corporate structures in Saudi Arabia include the following:
- A Limited Liability Company is a company where the shareholders' liability is limited to the value of their investment.
- Branch offices of foreign companies are places where local companies can go to get money that they are owed from the foreign company.
- General Liability Partnerships are when all of the partners working together are responsible for what happens to any person who is not part of the company.
- Establishments are businesses where the owner is the only one responsible for the debts of the business.
The debt collection process in Saudi Arabia
The debt collection process in Saudi Arabia usually happens in more than one step.
The image below explains our standard process for collecting debt in Saudi Arabia:
1 Upload your claim:
If you want someone else to help you get your money back, you will need to find a debt collection partner. You can upload your claim to their website. Debitura will give you 3 quotes from local partners in the Asia country that is relevant to your case. This service is free - there are no strings attached.
2 Amicable collection:
The collection process typically begins with sending friendly reminders to your debtor. The reminders can be sent by email, SMS, letter and other ways. The goal is to get the debtor to pay or acknowledge the debt and start a payment plan. Debitura offers a no-cure-no-pay solution for amicable collection. This means that you only pay a small success fee if we recover your debt. Amicable collections with Debitura are 100% risk-free!
If you have not gotten paid from the person you loaned money to after trying to work it out, it is time to look at what to do next. We will look at how much money you are owed, the chance of getting paid, and other things to help you decide what is the best thing to do. There are three common things people do next:
If your claim is for less than 2,000-5,000 euros, it is often not worth it to take more legal action. In this case, we recommend "debt surveillance." This means that we will keep trying to contact the person you owe money to and try to reach an agreement.
B: Legal collections:
We suggest starting a legal action for bigger demands. The specific steps will depend on what you are claiming and how much it is for. Generally speaking, it should take around 1-1.5 years for the process to finish.
C: Debt enforcement:
If the person you are trying to get money from has said that they owe you money, or if there is a court order, you can go to the bailiff's court to get your money.
At Debitura, we can help you with all three steps in Saudi Arabia.
Amicable collection in Saudi Arabia
At Debitura, we offer a 100% risk-free and efficient process for Amicable collections. To get started, simply submit your claim and we will begin working on it within 24 hours.
We will try to contact your debtor in Saudi Arabia through different ways, such as email, text messages, letters, phone calls, and social media.
The goal is to:
A) Get the debtor to pay the full amount.
B) Get the debtor to agree that they owe the money and start a payment plan.
If the person you think owes you money says they do not owe you money, you cannot try to work it out with them. You must start with legal collections.
The idea of interest is not allowed in Islamic law. This means that people cannot be charged for paying late in Saudi Arabia.
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amicable debt collection
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Legal collection in Saudi Arabia
If the person you owe money to does not pay you back, or if they disagree that they owe you money, we will give you 3 free quotes from local debt collection attorneys. This is called the legal phase. In this phase, our local attorney will try to talk to the person and get them to agree to pay you back. Our partners can also go to court and get a payment order from the Saudi Arabian legal system. This payment order can be used to make the person pay you back.
You should only go to court after you have tried everything else to solve the problem. The person who owes money would file a claim with the Commercial Courts. Then all of the people involved in the case would go to a meeting. The court would listen to everyone's side and look at all of the evidence before making a decision.
There is no quick way to get money from someone who owes you money. But if they have written a bad check, or if they have made a late payment and given you a promise to pay, you can go to the Enforcement Law and get your money more quickly. In this case, creditors can ask the enforcement judge for help without having to file a claim in the Commercial Courts first.
Saudi Arabia is a Sunni Islamic State that uses Shari’ah law (Islamic principles). This means that, unlike other GCC states, Saudi Arabia does not have a civil code that explains the rights and obligations of people in commercial dealings. Instead, such rights and obligations are determined by reference to the general principles of Shari'ah subject to KSA (Kingdom of Saudi Arabia) law.
Parties to a commercial contract are generally held to the terms they have agreed upon, unless those terms go against Shari'ah principles.
To get money because someone broke a promise, the law says all of these things must be true:
- A cause of action must have happened (for example, a wrongful act or something that was not done).
- In order to qualify for a loss, you must have actually suffered some damage.
- It must be shown that there is a direct connection between what happened and the losses suffered.
The Saudi Arabian legal system is based on Shari’ah Courts, which are the first courts to hear a case. If people disagree with the decision of the Shari’ah Court, they can go to a higher court, called the Court of Cassation. The Supreme Judicial Council is the highest court in Saudi Arabia. There are also Commercial Courts, General Courts, and Administrative Courts that deal with different types of cases. Generally, cases involving businesses are heard by the Commercial Courts unless another judicial committee has been given the authority to handle that particular case. In Saudi Arabia, there is no system of judicial precedent. This means that the decisions made by one court or judicial committee are not binding on another court or judicial committee. However, the decisions of the higher courts and judicial committees are persuasive. Judges will commonly rely on principles that have been established by other judges.
If you have a commercial claim and go to court in March 2022, you will have to pay 5% of the claim value. The maximum amount you will have to pay is approx. EUR 225,000. If you win your case, the other person may have to pay some or all of your legal costs. There are no rules for how much the other person would have to pay. The court decides if the other person has to pay and how much.
The amount of money you will need to pay for a lawyer depends on how difficult your case is and how big it is. To make sure you are getting the best deal, we recommend that you compare prices from different lawyers. You can do this easily by using Debitura.
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legal debt collection
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Debt enforcement in Saudi Arabia
If you have a written acknowledgement from the person you are owed money from, or a court order, you can take your claim to the bailiff's court in Saudi Arabia.
Enforcing the law may be a difficult task because it is new and has not been tested much yet.
The process and how much it costs varies depending on your situation. You can upload your case to Debitura and get 3 different quotes from within 24 hours.
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Upload your claim and get 3 FREE quotes from our local collection partners.
Insolvency proceedings in Saudi Arabia
If the person you owe money to cannot pay their debts, you can start an insolvency procedure. This is when we take their things and sell them to pay the people they owe money to.
- Commercial parties are generally held to the terms of their agreements, unless such terms violate Shari'ah principles.
- Out-of-court workouts may be set up if an agreement allows for it.
- Debt restructuring proceedings are not available.
- Liquidation proceedings may always be commenced by the debtor or creditors. A council is appointed by the court to oversee this process.
- Creditors who have not been paid may litigate against the debtor personally for 15 years until the debt is paid in full.
Our analysis concludes that the risk of conducting business in Saudi Arabia is medium-low. Based on this medium-low score, we recommend being careful providing credit and considering charging upfront payment or using credit insurance when trading if you don't know the customer in Saudi Arabia well. If possible, provide a short credit period or even better upfront payment. The medium-low risk score is based on the following factors:
The economic risk in Saudi Arabia
Our analysis shows that the economic risk in Saudi Arabia is medium (3 out of 6). An economic risk of 3 out of 6 is low in Asia.
GDP and economic growth are critical drivers for economic risk.
The GDP of Saudi Arabia is 833,54 bn. USD (2021), growing by 3,24% per year.
In terms of the size of its economy, Saudi Arabia ranks #19 out of 183 countries and has a large economy.
Having a view at the growth rate, it is ranked #123 out of 183 countries and is therefore considered an excellent growing economy.
GDP per capita is 23586 USD, ranking Saudi Arabia number #38 out of 183 countries. The result of this is purchasing power of citizens in Saudi Arabia is high compared to the rest of the world.
You can see a more detailed picture of GDP and economic growth in Saudi Arabia in the table below:
Another major impact for the economic risk score is the inflation rate and the interest rates. You can see a more detailed picture of monetary key performance indicators in Saudi Arabia in the table below:
The inflation in Saudi Arabia was 3,1% in 2021 which is considered a low inflation rate.
The business environment risk in Saudi Arabia
Our analysis shows that the business environment risk in Saudi Arabia is medium (3 out of 6), which is a relatively low risk score in Asia.
Economic freedom and rights determine the business environment risk in a country. The critical facts for Saudi Arabia in the table below:
In the above table, you can see, the property rights index is 69 in Saudi Arabia, which is considered pretty average in Asia.
The business freedom index is based on 10 indicators, using data from the World Bank’s Doing Business study. The Index is 84 in Saudi Arabia, a pretty good score for a country in Asia.
Saudi Arabia's overall economic freedom index is 66 out of 100 and is based on factors such as the rule of law, regulatory efficiency, and market openness.
The political risk in Saudi Arabia
The political risk in Saudi Arabia is medium-high, with a score of 4/6. This is a pretty average political risk score in Asia.
The governance and political stability indicators are important drivers for political risk. An overview of Saudi Arabia can be seen in the table below:
The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.
When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.
In Saudi Arabia, the rule of law index is at 0,23 points, with the score going from -2.5 (weak) to 2.5 (strong). Saudi Arabia has, therefore, a medium rule of law index, which means it should be possible to enforce your contracts. If possible, we still recommend charging payment upfront or working with credit insurance for larger deals.
Other drivers for the medium-high political risks are the weak control of corruption, the very weak political stability index, and the normal shadow economy that is 14,7% of Saudi Arabia's GDP.
The commercial risk in Saudi Arabia
In Saudi Arabia, the commercial risk score is 2/4, which in our model is a low score. This low commercial risk score is pretty average compared to the average in Asia.
The commercial risk is impacted by a country's international trade relationships. You can see some of the key facts for Saudi Arabia in the table below:
Saudi Arabia has a total of foreign exchange reserves of 473.89 bn. USD.
Saudi Arabia has a positive trade balance of 10,42% of GDP. This means that Saudi Arabia imports fewer goods and services than the country exports.
The annual growth of exports of goods and services has been growing 2% annually - now 34,77% of GDP. Import of goods and services represents 24,35% of the GDP in Saudi Arabia.
The financing risk in Saudi Arabia
We have calculated the financing risk to be 1/4, which equals a very low risk. A very low financing risk score is low for countries in Asia.
The country's banking system, efficiency, and stability influence the financing risk. You can find the extra information for Saudi Arabia in the table below:
In Saudi Arabia, the credit information sharing index is 8 on a scale from 0 (low) to 8 (high). The result of this is accessibility and quality of credit information available in Saudi Arabia is high.
This makes it easy for you to understand the credit risk of your counterpart in Saudi Arabia. You should therefore be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.
Your legal rights as a creditor (and as a borrower) are 4 out of 12 and, therefore, very weak.
Common questions about debt collection in Saudi Arabia
To collect debt in Saudi Arabia, businesses can try to collect the debt themselves or hire someone else to collect it (first-party or third-party collection). However, it can be difficult to get legal assistance and the insolvency laws are not as strong as in other countries. On average, people in Saudi Arabia pay their debts within 90 days, and negotiating for an immediate payment can result in a discount. Debitura offers a free service to help collect debts, beginning with a friendly reminder to the debtor and escalating to legal action if necessary.
The debt collection process in Saudi Arabia usually involves three steps: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection involves friendly reminders to your debtor to pay up, and legal debt collection includes taking legal action. If the person owes you money or there is a court order, debt enforcement via bailiff's court can be pursued. Debitura can assist with these three steps in Saudi Arabia.
In Saudi Arabia, legal options for debt collection include civil lawsuits for disputed debts, debt enforcement, and insolvency proceedings. It is advisable to hire a local lawyer as legal proceedings require one. The legal system is based on Shari’ah Courts, but there are also commercial courts, general courts and administrative courts. The court charges a fee of 5% of the claim value, up to approximately EUR 225,000, and winning plaintiffs may also recover some or all of their legal costs. Insolvency proceedings may be commenced by debtors or creditors, with a council appointed by the court to oversee the process.
Debitura offers pre-legal debt collection with a no-cure-no-pay model and a success fee between 10-20%. The cost for legal actions depends on your case, and Debitura can get you 3 quotes from the top debt collection lawyers in Saudi Arabia.
The length of time it takes for debt collection in Saudi Arabia depends on the debtor and the case. If the case can be resolved through a pre-legal phase, the collection process typically takes 3-6 months. However, if legal action is required to collect the debt, it can take longer, typically 12-18 months. The length of time may vary depending on the specific circumstances of the case.