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We are excited to share the latest edition of the Law Update, beautifully and appropriately titled “Sustainable Horizons: The Saudi Arabian Vision.” Giving special honor to the Kingdom’s 2030 vision, this update focuses on a collection of both informative and inspiring articles.
For those in construction, you can learn about how the tendering environment impacts risk-pricing for contractors, the updates on the legal framework of the construction industry and how contractors can protect themselves against financial difficulties.
There is good news too from the kingdom’s banking sector, from which the practice of “Open Banking” is being pushed for! But what is open banking? We’re answering that too.
Also . . . Are there any women trail blazers in Saudi Arabia you can name? We’ll help you with that. We cover how the Middle East has been making strides in empowering women in the entrepreneurial space,most notably in STEM fields.Read the full edition
The Ministry of Labour and Social Development (MLSD) has announced that from September 2018 a tenancy agreement authenticated by the Ministry of Housing will be required for work permit (Iqama) renewals. This follows the requirement for individuals to register their address with the National Post Service to prove their identity; which became mandatory in April 2018 for anyone holding a bank account.
Authentication will be carried out through the government’s e-platform ‘Ejar’ by which tenancy agreements will be registered with the Ministry of Housing. Ejar has introduced a standardised rental agreement which is to be used for residential and commercial tenancies. It also facilitates payment of rent by electronic transfer through SADAD on a monthly or annual basis, as agreed by the parties.
The need for a tenancy agreement to be authenticated through Ejar will likely add to the time needed to process Iqama applications and increase costs for expatriates working in the KSA. It will also complicate matters for employers who provide accommodation to staff and for individuals who live in shared dwellings.
Employers who lease accommodation on behalf of employees may need to amend tenancy agreements to ensure that the occupants are named in the lease. If this is not possible then it remains to be seen whether the MLSD will accept confirmation from the landlord and/or the employer (as the lessee) that the employee is the occupant of the dwelling.
Employees who are based outside of the KSA and hold an Iqama may find that the cost of renting accommodation is not feasible if they are working on a ‘fly in–fly out’ basis.
Initial work permit applications will also require a tenancy agreement, but no indication has been given as to when this will be implemented.
If you should require further advice, please contact Zahir Qayum and Mohsin Khan.
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