Your company’s receivables under the new Enforcement Law

Almost every company’s books carry a line that never goes away: overdue receivables.

In it sit bounced cheques, paper promissory notes, invoices that are months old, and contracts with a late-payment percentage that nobody has ever paid.

Now that the Enforcement Law (1447H) and its Implementing Regulation took effect in late October 2026, some of these papers take you straight to the enforcement court, some stay outside it, and on some the clock has started.

This is a playbook for the finance director and the collections team, in the order a file actually moves. For the overall picture of the Law, start with The new Enforcement Law: what has changed?

Which of your papers opens the door to enforcement today?

Article 7 of the Enforcement Law limits enforcement instruments to eight types. The ones that matter most to a company are:

• Cheques, which are enforcement instruments with no registration condition.
• Bills of exchange and promissory notes, if registered on the national electronic platforms approved by the Ministry of Justice. A note can be registered only with the consent of the person bound by it.
• Contracts and acknowledgements notarized under the Notarization Law.
• Notarized settlement agreements and reconciliation documents.
• Final judgments and arbitral awards.

Invoices, purchase orders, statements of account and contracts that are not notarized are not on this list, unless a law or a Council of Ministers decision gives them the force of an enforcement instrument. The route for those is set out in Collecting a debt without an enforcement instrument.

Old paper promissory notes

A paper bill or promissory note issued before the Law took effect remains an enforcement instrument for one year after it took effect, provided it meets every legal condition except registration.

After that year, an unregistered note is no longer an enforcement instrument. Take stock of these notes now, rank them by value and due date, and file those worth filing before the grace period ends.

Ten years, then the door to enforcement closes

Article 11 of the Enforcement Law provides that no enforcement request will be accepted under an instrument more than ten years past its due date.

The count starts from the due date.

For instalment debts and recurring obligations, the period is counted for each payment or instalment separately, so a single contract may hold some instalments that are out of time and others that are still within it.

Go through your old receivables, pull out every instrument that has been due for a long time, and file before the ten years come close.

If your debtor is a company, notify it before you file

Article 13 of the Implementing Regulation of the Enforcement Law requires the creditor to notify the debtor, or the debtor’s representative, of the demand for payment at least five working days before the enforcement request is registered, in four cases:

• the debtor is a private legal person, such as a company;
• the creditor and the debtor agreed that notice would be required;
• the debt was deferred when it was created;
• the debtor has died or lost legal capacity, in which case notice goes to the heirs or guardian.

No notice is needed for a recurring obligation if an enforcement request for it has already been registered.

Notice is given through the Ministry of Justice’s electronic systems, unless you and the debtor agreed in writing on another method.

The five days are working days. Count them that way, and do not file before they have passed.

The deadlines, from notice to attachment

This is how a file runs when the instrument is sound and the debtor does not pay. The steps for opening the file itself are in Opening an enforcement file.

1. Give prior notice where required, then file the request at least 5 working days later.
2. If the competent office finds the request incomplete, you have 10 working days to complete it, or it is treated as rejected. You may file a grievance within 10 working days.
3. The enforcement order is issued and served on the debtor electronically. If service fails, the order is published instead.
4. The debtor must disclose assets within 5 working days of service and pay within 5 working days, or provide a bank guarantee sufficient to cover the debt and get 10 more working days.
5. After that, compulsory measures against assets begin immediately: notice of non-payment to the credit-information bureaus, and attachment of the debtor’s present and future assets.

The daily fine has a ceiling

On top of attachment, the court may impose a fine on the debtor of up to SAR 5,000 for each day that passes without the enforcement being completed.

But Article 18 of the Implementing Regulation of the Enforcement Law provides that the total may not exceed the amount of the debt being enforced, and the decision rests with the court. Do not build your forecasts on a fine that grows without end.

The travel ban and its limits

If your debtor is an individual, a travel ban is issued only at your request after the payment period has passed, and only if the court could not attach assets of the debtor sufficient to cover the debt.

Each order lasts no more than 3 years, and it may be extended on a new request, provided the total does not exceed 6 years.

Do not count on it if the unpaid balance is SAR 50,000 or less: the court lifts the ban in that case, just as it does for medical treatment abroad, for a profession that requires travel, for harm to the debtor, or where the debtor discloses assets sufficient to pay.

When assets start to disappear

If there are signs that the debtor is hiding or smuggling assets, you can ask the court to interrogate the debtor and anyone suspected of receiving the assets: relatives, agents, employees and people who deal with the debtor financially.

A person summoned for interrogation must respond within 3 working days of being notified, and where needed the court may order that person brought in by force.

Third parties may also be ordered to make disclosure within 10 working days.

If the debtor has given assets away as a gift or donation, paid a debt before it fell due, or entered into an unusual contract or financial commitment, you can ask the court to set the transaction aside, and the court sets aside all or part of it up to the amount of the enforcement instrument.

Any disposal of property after an attachment order has been issued against it is void under Article 24 of the Enforcement Law.

Anyone who knowingly helps the debtor hide or smuggle assets faces the same penalty as the debtor: up to 3 years in prison, a fine of up to SAR 1 million, or both.

Once you are paid, close the request within a working day

Many files are settled outside court by a direct transfer, and the enforcement request then stays open because nobody remembered it.

Article 46 of the Implementing Regulation of the Enforcement Law is clear: if the debt is paid other than through the enforcement process, the applicant must close the request within one working day of being paid.

Delaying the closure to harm the debtor is a crime under Article 53 of the Enforcement Law, punishable by up to 3 years in prison, a fine of up to SAR 100,000, or both.

Make it a written rule in your company that finance tells legal about every payment on the day it arrives.

Percentage late-payment penalties, and what to use instead

Article 178 of the Civil Transactions Law allows the parties to fix compensation in advance in their contract, unless the obligation is to pay a sum of money.

Your customer’s obligation to pay is an obligation to pay a sum of money, so a percentage charged for late payment falls into the very area the text excludes.

Do not assume that a commercial contract escapes this. The Civil Transactions Law applies to commercial transactions where the commercial laws contain no specific provision, so far as it is consistent with the nature of the commercial transaction.

In a published first-instance judgment of the Jeddah Commercial Court, issued in 1445H as No. 4531041638, a late-payment penalty of 1% per day capped at 10% was rejected, and the court treated the rule as a matter of public order.

It is a single judgment and should not be read as a settled line of case law, but it shows how the text has been read.

So what should you use instead?

• Take an enforcement instrument when you sign, such as a cheque, a registered promissory note or a notarized acknowledgement of debt, so that your answer to late payment is an enforcement file, not an argument about a percentage.
• Ask for security, such as a bank guarantee or a retention from each payment.
• Attach penalty clauses to non-monetary obligations, such as delivery dates, project milestones, notice periods and service levels.
• Use your right to withhold your own performance while your customer withholds theirs. If you want to be able to terminate without a court judgment, write in an express termination clause together with an express waiver of formal notice.

Penalty clauses, and when a judge will reduce them, are covered in The penalty clause.

The Council of Ministers approved a new Commercial Transactions Law on 27 October 2026, and its text has not yet been published. Revisit these clauses once it is.

If your overdue receivables are many and scattered, sit down with your lawyer once to sort them by type of paper and due date before you open the first file.