New Saudi Enforcement Law Restricts Enforcement of Unregistered Promissory Notes

The new Saudi Enforcement Law comes into force in late October 2026 pursuant to Royal Decree No. M/237 issued on April 20, 2026, replacing the Enforcement Law issued in 2012 and changing the way promissory notes are handled in the Kingdom.

Under the law, promissory notes are not considered directly enforceable instruments unless registered on an approved national electronic platform, currently the 'Nafith' platform. A paper promissory note written in ink remains evidence of the existence of the debt, but loses its direct enforceability if not registered electronically.

The law grants a one-year transition period for existing promissory notes to comply with the new requirements. Open questions arise regarding the treatment of foreign lenders, who reports say are currently unable to hold electronic notes on the 'Nafith' platform, which may affect trade finance and foreign companies operating in the Saudi market.

These amendments push creditors to digitally register their rights before the deadline, and increase the importance of verifying the validity of promissory notes and their registration platform when concluding any new financial commitment. Legal entities advise companies to perform an early review of their existing notes according to the timeline of the transition period.

What do these terms mean?

Promissory Note: A financial document signed by the debtor promising to pay a specified amount on a specific date, and is often used in commercial transactions instead of checks.

Enforceable Instrument: A document that empowers the creditor to resort directly to the enforcement judge to collect their right without the need for a lengthy substantive lawsuit.

Royal Decree: A decision issued by the King, considered effective legislation in the Kingdom of Saudi Arabia upon its publication in the Official Gazette.