Do you have any outstanding credit collection in Saudi Arabia? Rely on Invenium!
When you go to a credit collection action in Saudi Arabia, you have to consider that, as for all the Gulf countries, late payment has become a common practice in Saudi Arabia. Debtors put many obstacles in the way in order not to pay according to the agreed terms. A common practice is to request original invoices which must contain authorizations at various levels in the debtor’s organization.
Legal action is slow, expensive and uncertain since judges have considerable discretion in applying the principles of Islamic law, the Sharia. The courts also never exactly specify the timing of proceedings and consequently, months can pass between one hearing and the next. Arab law does not regulate late payments, while arrears interest is simply prohibited because it is contrary to Islamic law and collection costs may not be charged to the debtor.
Out-of-court negotiations conducted by local specialists can be an effective means to obtain payment without resorting to the courts. Normally, payment is obtained with a discount – also of a significant amount.
Saudi Arabia doesn’t have a civil code that establishes rights and obligations concerning relations between the sides in their business relations. Such rights and obligations are determined with reference to the Sharia, which is derived from the main Islamic religious texts.
Legal action should be taken only when all the opportunities for an amicable settlement have been used to no effect. There are no fast-track procedures but the creditor – through a local lawyer, must present a claim to the Council which, with its own timing, will summon the parties to examine the documents of the proceedings.
It is necessary to rely on a credit collection agency focused on international cases like Invenium. Invenium cooperates with 5 partners in Riyadh – Mecca – Gedda – Qatif for credit recovery in Saudi Arabia for over 7 years.