Welcome to the Saudi Arabia focus edition of Law Update.
One of the key markets in the Middle East and North Africa (MENA) that continues to lead from the front is the Kingdom of Saudi Arabia (KSA). As the largest country in the Middle East and the 18th largest economy in the world, the progress KSA continues to make is underpinned by its Vision 2030 that envisions developing the country as an investment powerhouse and hub that ultimately connects Asia, Europe, and Africa. Given Saudi Arabia’s significance to the regional economy, our team of experts have prepared a range of pertinent articles that provide insights into new laws, regulations, and the legal landscape in the Kingdom.
This edition will provide you with an up-to-date guide on matters such as; the framework issued by the Saudi Central Bank on IT governance, the anti-corruption landscape under Vision 2030; we also provide practical tips for dispute avoidance. This is only a snapshot; there are many more articles within the KSA focus section for you to read, which we hope you will find valuable and enjoyable.Read the edition
Key issues arising under the new law
The key provisions of the new law require that all Omani companies which have been granted licences to conduct pharmaceutical activities must now restructure to include an Omani pharmacist into their shareholder structure. The consequence of this legislative requirement is that existing foreign owned Omani pharmacies may need to either reduce the equity held by the non-Gulf Corporation Council (‘GCC’) national shareholder or their current Omani sponsor. Applications to open new pharmacies must comply with this rule immediately, whereas existing pharmacies have a short period of time to comply.
Other notable issues
Other areas covered by the law, which will affect the larger pharmacy chains in Oman, are as follows:
The law is likely to have a greater effect on businesses that hold doctors’ practices, hospitals, and pharmacies under one Omani company. In this situation, a new company should be created to hold the pharmaceutical business separately from the other businesses. It will be necessary to move existing pharmacy branch registrations over to the new company. This will delay new pharmacy registrations but the process of transferring branches can usually be carried out in a short period of time, minimising the delay.
Businesses can also benefit from new Ministry of Commerce practice that no longer requires investors to produce physical evidence of the availability of the start up share capital in an Omani bank account. While the capital will eventually need to be deposited into the new company, the new practice means the capital obligation is spread out over the first financial year.