It depends far less on your payment terms than on what kind of paper you are holding. In the UAE, Saudi Arabia and Bahrain a written, due, fixed-sum claim opens a fast court order. In Oman and Qatar it does not, and only a negotiable instrument will do. Interest is capped, unavailable or unenforceable almost everywhere.

This piece is current to 27 October 2026. It covers one thing that changes this week: Saudi Arabia's new Execution Law comes into force on 29 October 2026, and it moves the ground under the single security device foreign vendors are most often told to take.

A note on sources. Several of the instruments below have no official English text, and where we quote them the rendering is our own translation of the Arabic, which governs. Where an official or ministry translation exists, as it does for the Saudi Civil Transactions Law, the Saudi Arbitration Law and the Bahraini codes, we say so and have checked it against the Arabic. The UAE Commercial Transactions Law has no official English text at all, and the renderings we quote are unofficial.

What matters is which document you hold

European vendors negotiate payment terms. Gulf collection turns on something else: what the paper in your file lets you do at a courthouse. The six states answer that in four different ways, and the differences are larger than anything in your terms.

Three of them give a fast order to an ordinary written claim.

In the UAE, Article 143(1) of the Civil Procedure Law, Federal Decree-Law No. 42 of 2022, opens the payment order procedure wherever "the creditor's right is well-established in writing, whether electronically or in a paper format, and due for settlement, and that the claim is only involving a debt of money of a specified amount". Electronic writing counts, and there is no monetary ceiling. A countersigned acceptance certificate or an agreed statement of account qualifies. Article 144(1) requires a demand allowing at least five days, Article 144(4) requires the order "not later than three business days following the filing date", Article 146(2) voids it if not served within three months, and Article 147 gives the debtor fifteen days to file a grievance where the value is inside the court of first instance's final jurisdiction of AED 50,000 under Article 29(1)(b), or the ordinary appeal route above that.

Saudi Arabia has the same thing and almost nobody uses it. Article 67 of the Law of Commercial Courts lets a creditor petition for a debt satisfaction order where the debt is "established in writing", due, and "a fixed amount of money, a specified movable in type and amount, or unequivocally defined". There is no monetary threshold. Article 68 requires a written notice to pay "at least five days" before filing, stating the date the creditor intends to file. Article 70 requires the court to decide "within 10 days from the petition filing date". Article 71 gives the debtor fifteen days to appeal, after which the debtor is treated as the claimant. And the order carries expeditious execution, so under Article 79(4) an appeal does not stay it.

Bahrain's version is the oldest and the most generous on the document. Article 323 of the Civil and Commercial Procedures Act, inserted by Legislative Decree No. 1 of 1990, applies "if the right of the creditor is proved by an instrument in writing and is payable and if the debt claimed is an amount certain in money". Article 324 requires a demand allowing at least seven days, by registered letter with a delivery note, and then the order "shall be issued on a copy of the application within a maximum period of three days from the date of filing it". Article 326 voids the order if the debtor is not served within a month. Article 327 gives ten days to object, and provides that an objection "shall be substantiated otherwise it shall be deemed null and void".

Oman requires a negotiable instrument. Its order of payment is available for commercial debts "substantiated by a commercial instrument such as a bill of exchange, promissory note or cheque, which are valid, but not paid", in the words of Curtis Mallet-Prevost's Oman practice, which also still calls the procedure "a developing area of law". A perfectly documented invoice does not qualify.

Qatar requires a cheque the bank has dishonoured, and it only started in 2024. Law No. 4 of 2024, the Judicial Enforcement Law, replaced the enforcement regime previously in the third book of the Civil and Commercial Procedure Law, and for the first time listed cheques among enforceable titles at Article 6. The cheque must carry the drawee bank's statement of insufficient or absent funds, must never have been endorsed or transferred, and the request must be filed within three years of the cheque's issue date. The reason is volume: returned cheque cases were running at seventy percent of total cases in various Qatari courts, roughly twenty thousand a year. Fast is relative, though. Article 33 lets the enforcement judge give the debtor up to ninety working days to bring a substantive challenge, and suspend enforcement while it runs.

In Kuwait we could identify no fast route at all. No payment order or summary debt procedure surfaced in any source we could reach, and DLA Piper's litigation guidance puts ordinary Kuwaiti commercial proceedings at six or seven years end to end. What Kuwait has instead is pressure on the individual. The Council of Ministers approved amendments in April 2025 to Article 5 of the Bankruptcy Law, Law No. 71 of 2020, that would reinstate arrest and detention for debtors evading financial obligations, though we have not been able to confirm from a primary source that they were promulgated. Administrative Circular No. 26 of 2025 keeps existing asset seizures and travel bans alive through a debtor's first objection, while cutting the other way too: arrest warrants are suspended and detained debtors released once a valid objection is lodged, with arrest available again if the objection fails.

So where does the cheque fit? In the UAE it is the only executory instrument among commercial papers. Article 667 of the Commercial Transactions Law, Federal Decree-Law No. 50 of 2022, provides that "the cheque on which the drawee states that it has no or insufficient balance shall be an executive instrument", and Article 143(2) of the Civil Procedure Law routes every other commercial paper to the payment order instead, "with the exception of the cheque which is considered a writ of execution". A cheque holder starts at the execution judge. Everyone else starts one procedural stage earlier. That is a real advantage and worth negotiating for, but it is one stage and a shorter debtor window, not the difference between a day and a year.

The practical consequence still runs backwards from everything a European finance team is trained to do. In Oman and Qatar, the clean audit trail and signed milestone acceptance that win a case in Warsaw or Frankfurt are worth less at the enforcement counter than one cheque collected at signature.

Saudi Arabia changed the answer this week

Until now the standard advice for the Kingdom was simple: take a promissory note. Article 9(4) of the Enforcement Law of 1433H made a commercial paper an executory instrument without qualification, so a note went straight to the execution judge.

That law has been replaced, though not entirely. Royal Decree No. M/237 of 3/11/1447H approved a new Execution Law, gazetted in Umm Al-Qura on 1 May 2026. Article 65 states that the new Law replaces the Execution Law issued by Royal Decree No. M/53 and comes into force 180 days after publication. Counted from the gazette date that is 28 October 2026; counted from the day after, 29 October. The Ministry of Justice's own announcement of the Implementing Regulations on 23 October 2026 gives 29 October, and the Regulations take effect the same day, so 29 October is the operative date. Clauses Sixth and Seventh of the Decree keep two parts of the old Law alive: its precautionary attachment provisions, until they are moved into the Law of Civil Procedure, and its civil insolvency provisions, until a dedicated insolvency statute issues. Pre-judgment attachment of a Saudi debtor's assets is therefore still run under the old Law.

Article 7(1) of the new Law lists the executory instruments. Two limbs matter. Limb (d) covers "bills of exchange and promissory notes, where they are registered on the national electronic platforms", and adds that the Regulations will set the conditions, controls and procedures for that registration. Limb (e) covers "cheques", in one word, with no condition attached. The word cheque does not appear anywhere in the Implementing Regulations either, so there is no condition at that level.

Two things follow, and the second is the one that will catch people.

First, a promissory note is now executory only if registered on a Ministry-approved national platform. Clause Fifth of the Decree grandfathers notes "issued before its entry into force" which otherwise satisfy the statutory conditions, "except the condition of registration on the national electronic platforms", and only "for a period of one year after its entry into force". So paper signed before 29 October 2026 stops being self-enforcing around 29 October 2027.

Second, a note signed after 29 October 2026 and left unregistered is not executory from day one. There is no grace period for it. And you cannot fix it later on your own: Article 6 of the Implementing Regulations requires the platform to be approved by the Ministry and makes registration conditional on "the consent of the obligor". A foreign vendor holding an unregistered note cannot register it unilaterally. The registration has to be agreed and done at signature, as a condition of signature, or it does not happen.

For a vendor with no easy access to a Saudi platform, that quietly inverts the conventional advice. The cheque is now the stronger instrument in the Kingdom, as it already was in the UAE and Qatar.

Three further changes cut against the creditor, and they matter more than the headline.

The travel ban has stopped being automatic. Under Article 46 of the old Law, where the debtor failed within five days either to comply or to disclose sufficient property, the execution judge was required to order a travel ban immediately. Under Article 19 of the new Law the ban issues only "on an application submitted by the party seeking execution", runs for no more than three years, may be extended on a fresh application subject to an aggregate cap of six years, and must be lifted on any of five listed grounds, including where the debtor's "profession, trade or occupation requires travel outside the Kingdom" and where the debt is among the minor amounts the Regulations define, which Article 19(1) of the Regulations fixes at SAR 50,000. Article 19(2) of the Regulations goes further: the ban shall not issue "unless it has proved impossible to attach assets of his sufficient to satisfy the right that is the subject of the executory instrument, or an impediment has prevented satisfaction out of them". The leverage European vendors were told to rely on is now subsidiary to going after assets.

The new daily fine does not go to you. Article 18(3) lets the court impose a fine "not exceeding five thousand riyals per day" for each day that passes without execution being completed, capped by the Regulations at the value of the debt, and then provides that the fine is not collected until the execution proceeds have been distributed and that "the total proceeds of the fine shall accrue to the State Treasury". You are paid first and the State then takes its fine. It is pressure, not compensation. Note the comparison: the equivalent fine in the direct execution track at Article 36(3)(b) is ten thousand riyals a day, so the Law prices non-performance of an act at double non-payment of money.

Imprisonment has moved rather than gone, and the nuance is the part that matters. Article 37 retains imprisonment, for up to 180 days and extendable, but only after thirty working days of the measures in Article 36, and Articles 36 and 37 sit in the chapter on direct execution, meaning obligations to do or to abstain from doing something. The money debt track is Articles 18 and 19, and neither contains an imprisonment power. But there is a bridge the headlines miss. Where the debtor is a company, Article 41(1) applies the direct execution provisions, and therefore Article 37, to "the person responsible for obstructing execution among the personnel of the private legal person". Article 45 of the Implementing Regulations sets the threshold: the company's mere failure to comply with the execution order is not of itself enough, but an officer who obstructs execution by an act of his own, or who refuses to take a step within his powers that was necessary to complete it while able to do so, is exposed, and the court tests it by questioning him. So a vendor enforcing against a Saudi company has lost nothing at the individual level if the company's officers obstruct, and gained nothing if the company simply cannot pay.

One more provision is new and easy to miss. Article 11 bars an execution application "more than ten years after the date on which it became due". That closes the execution route rather than extinguishing the right, because Article 295 of the Civil Transactions Law says expressly that a right is not extinguished by lapse of time. But a judgment or a registered note left unenforced for a decade loses the only quick way to collect on it.

What you can actually charge for late payment

A late payment interest clause does roughly nothing in half the Gulf, and the reasons differ in each state. The sharpest way to see it is to put Saudi Arabia and Qatar side by side, because they say the opposite thing about the same question.

Saudi Arabia withholds the permission. Article 178 of the Civil Transactions Law, Royal Decree No. M/191, in force since 16 December 2023, lets the parties fix compensation in advance in the contract or in a later agreement "unless the subject of the obligation is a cash amount". We checked that against the Arabic, because the whole drafting point turns on it, and the Bureau of Experts official English is accurate. So you may agree liquidated damages for late delivery, late implementation or a missed milestone. You may not agree them for late payment of money. A late payment percentage in your standard terms is unenforceable in the Kingdom and a Saudi court will not give effect to it.

Qatar expressly permits it. Article 265 of the Civil Code, Law No. 22 of 2004, says that "where the obligation is the payment of money, the contracting parties may calculate the amount of indemnity in advance in the contract or in any subsequent agreement". Two Gulf civil codes, drafted in the same tradition, reaching opposite conclusions on the one clause every European vendor puts in its terms.

Qatar then takes most of it back. Article 266 provides that "no agreed indemnity shall be payable if the obligor proves that the obligee has suffered no damages", that the court "may decrease the agreed amount of indemnity if the obligor proves that the calculation is exaggerated or if the obligation has been performed in part", and that "any agreement to the contrary shall be invalid". Article 267 bars the creditor from claiming more than the agreed figure without proving fraud or gross negligence. Article 268 lets a court award an indemnity for non-payment "subject to the requirements of justice", but only where the obligor failed to pay "after being notified to do so" and the obligee "proves he has incurred damages". Serve a formal demand in Qatar and document your loss. Neither is optional.

There is no legal rate of interest and no ceiling on one in the Qatari Civil Code. The word appears in the English text overwhelmingly in the sense of concern or benefit; the one financial use, at Article 1019(2), obliges a usufructuary to pay the owner interest on money the owner has spent, and fixes no rate. While we are here: the seven percent Qatari interest cap that circulates widely does not exist. We traced it to an Egyptian legal alert about Egypt's own Civil Code, which kept surfacing in searches naming Qatar and Kuwait with no Egyptian term in them. Do not plan around it.

Back in Saudi Arabia, the absence of a penalty clause is not the absence of a remedy. Article 171 imposes compensation where "the debtor delays the performance of his obligation", with no carve-out for money obligations, Article 180 sets the measure by reference to Articles 136 to 139, and Article 137 admits lost profit where it is "a natural result of the harmful act". The door is real but narrow: you must prove actual, foreseeable loss, and you cannot compute it as a charge for the time value of money. Article 385, in the loan chapter, is where that last point bites. The Bureau of Experts English renders it as voiding a condition "requiring the payment of interest"; the Arabic contains no word for interest at all and voids any condition involving an increase on the repayment of the loan, payable by the borrower to the lender, whatever it is called. It also expressly reaches a condition agreed "upon the deferral of payment", which is exactly the moment a vendor is tempted to charge for giving a customer more time. Relabelling a late charge as an administrative fee does not work. And if you ever win an award containing interest, Article 55(2)(b) of the Arbitration Law lets the Saudi court divide it: "If the award is divisible, an order for execution of the part not containing the violation may be issued." You collect the principal and lose the interest.

The UAE is the opposite of Saudi Arabia, and more generous than most vendors realise. Article 84 of the Commercial Transactions Law makes delay interest payable as of right where the commercial obligation is "a sum of money of specific amount, at time of the creation of obligation", subject to contrary agreement. Note the condition: it bites on time and materials work and usage-metered contracts, where the sum was not determinate when the obligation arose. Article 85 then provides that "it is not stipulated for the entitlement to default interests that the creditor proves the harm suffered due to such delay", and Article 86 runs interest "from the maturity date". No demand and no proof of loss. Article 72 caps the rate at nine percent a year, but only where the contract is silent; under Article 73 an agreed rate governs default without any stated ceiling, and there is no provision anywhere in the law capping an agreed rate or capping total interest at the principal. The widely repeated twelve percent cap belonged to Article 76 of the repealed 1993 law. Article 88 makes compounding unenforceable.

Two practical cautions. First, the rate onshore Dubai courts actually apply is five percent. K&L Gates, Galadari and Akin Gump all report Resolution No. 1 of 2021 of the General Assembly of the Dubai Court of Cassation, dated 9 June 2021, reducing the judicially applied rate from nine percent to five where the contract is silent. There is no official publication of it, and Galadari notes it remains unclear whether the other emirates and the federal courts will follow. Second, Article 81 requires a demand in commercial matters to be served "through the notary public, by certified mail or any electronic method or equivalent modern means of technology determined by decision of the Minister of Justice, or any mean agreed on by the parties". A dunning email may not be valid notice unless your contract says it is. That is a one line fix.

Bahrain is the best interest position in the Gulf, and the reason is a currency clause. Article 81 of the Law of Commerce, as replaced by Legislative Decree No. 4 of 1992, provides that "the interest for late payment of commercial debts shall accrue from the due date, unless otherwise provided by law or convention". It accrues by operation of law, with no clause and no demand. There is a cap, and it is aggregate rather than a rate: total interest may not exceed the principal, on debts whose repayment period does not exceed seven years, which is every trade receivable, and any agreement to the contrary is void. Article 76 of the same Law separately contemplates a maximum rate to be set by the central bank, which we have not been able to confirm is currently notified.

And then Article 81(3) says that "the provisions of paragraph (2) do not apply to interest on debts due on transactions contracted in foreign currencies". Invoice a Bahraini customer in euro or zloty and the aggregate cap does not apply to you at all. The same invoice in Bahraini dinars is capped. The carve-out was inserted deliberately: the 1991 version of Article 81 did not contain it, and the 1992 decree added it along with paragraph (4), which gives the creditor supplementary damages without having to prove that the excess loss was caused by the debtor's fraud or gross negligence. Currency of denomination is a substantive remedy choice in Bahrain, not a treasury detail. Note also Article 80: a warning or notification in commercial matters must go by registered mail, which governs the Article 324 payment order demand.

Oman allows interest by agreement, inside a ceiling that has to be renewed every year. Article 80 of the Commercial Law, Royal Decree 55/90, lets the parties set the rate within limits specified, in the Oman Chamber of Commerce and Industry's English rendering, "by the Ministry of Commerce and Industry in agreement with the Oman Chamber of Commerce and Industry every year", taking account of the loan's term, purposes and risks, and its closing sentence is the operative one for a vendor: where the debtor fails to repay on the due date, the creditor is entitled to the agreed interest for the period of delay. Article 81 adds a right to supplementary compensation beyond the agreed interest where the creditor has suffered damage in excess of it, with the court assessing. Ministerial Resolution No. 473/2023 set the ceiling at six percent for the year from 3 September 2023, and a further decision in September 2024 set six percent again for one year. The 6.5 percent figure that still ranks well in search is from a 2016 decision that expired in 2017. Because each decision runs for a single year and we could find no 2025 or 2026 decision, treat the ceiling as most recently set at six percent rather than as a current fact.

Kuwait appears to be the one Gulf state with a statutory default rate. Article 102 of the Commercial Code, Law No. 68 of 1980, gives a creditor interest on "any commercial loan unless otherwise agreed" and provides that where no rate is stated the creditor gets "the legal one (7%)", while clause (2) provides that where a rate is agreed and the debtor fails to pay, delay interest runs at the agreed rate. Be careful with this. We could verify it from only one academic translation of one article, the provision speaks of a commercial loan rather than a trade receivable, and we could obtain no primary Kuwaiti text at all. The practical conclusion is the same as everywhere else: state a rate expressly.

The limitation clock does not start where you think

Between traders, the UAE period is five years, and the trigger is unusual. Article 92 of the Commercial Transactions Law bars claims between traders, "upon denial and in absence of lawful excuse", "upon the lapse of five years from the maturity date of the obligation, unless a shorter period is provided in the law". From the maturity date, not from accrual of the cause of action, which is how at least one law firm note paraphrases it. On a milestone billed software contract those are not the same date, and the statutory wording is more favourable to a vendor that invoiced late. One shorter period matters here: Article 670 gives a cheque bearer two years from expiry of the presentment period against the drawer and endorsers, though Article 670(4) disapplies that against a drawer who never funded the cheque. And Article 212(5) of the Civil Procedure Law kills any executory instrument left unenforced for fifteen years, while Article 212(4) lets the execution judge temporarily close a file in which no step has been requested for a year, which is the one that actually catches foreign creditors.

Bahrain is a trap for the unwary, because the famous number is the wrong one. Article 365 of the Civil Code does give fifteen years for personal obligations, but Article 87(1) of the Law of Commerce provides that "obligations of merchants incurred in connection with their commercial activities towards each other shall be statute barred upon the lapse of ten years from the due date of performance unless a shorter period is prescribed by Law". Selling to a Bahraini company, plan on ten years from the due date.

Saudi Arabia is ten years under Article 295 of the Civil Transactions Law, with one exception a subscription business should look at carefully. Article 296(b) sets five years for "renewable periodic rights, such as the rent of real property, wages, regular payments, and the like". A monthly subscription is arguably a renewable periodic right. Bahrain has the same provision at Article 366(a) of its Civil Code, five years for sums payable periodically at recurring intervals and only where the debt is not admitted by the debtor, which makes a signed statement of account a limitation device in its own right. Qatar has the parallel at Article 404(1). None of this is tested on a SaaS contract and we are not going to pretend otherwise, but a vendor sitting on six years of unbilled subscription arrears should not assume it has ten.

Oman is ten years for merchants' obligations to each other. Qatar is fifteen years for personal rights under Article 403 of the Civil Code, with commercial claims generally reported at ten; we could not obtain the text of the Qatari Commercial Law, Law No. 27 of 2006, so we flag that rather than assert it. Kuwait is generally reported at fifteen years, on the same caveat.

One trap for anyone working from older UAE guidance. Federal Decree-Law No. 25 of 2025 promulgated a new Civil Transactions Law that repealed Federal Law No. 5 of 1985 and came into force on 1 June 2026. The commercial five year rule in Article 92 is untouched, but every civil code article number in material written before mid 2026 has moved, including the court's power to adjust agreed compensation to the actual loss, which went from Article 390(2) of the 1985 code to Article 340 of the new one. That power is the real control on any late payment clause in a UAE contract, and it cannot be contracted out of.

You may be paying the tax before you collect the invoice

This is the part nobody puts in a payment terms memo, and it is pure working capital.

Start with whether it applies to you. A remote vendor with no UAE establishment usually is not registered for UAE VAT, because the customer self-accounts under the reverse charge. We set out when a foreign software vendor does and does not have to register, and the reverse charge trap when the customer has no tax registration number, in do you need a local entity to sell software in the UAE.

If you are registered, VAT is due on the earliest of several events under Article 25 of Federal Decree-Law No. 8 of 2017, including completion of services and the issue of the tax invoice, with Article 26 governing periodic payments and consecutive invoices. Article 59(13) of the Executive Regulation then requires the registrant to "issue the Tax Invoice within 14 days from the date of the supply", and Article 64 requires the return and the payment by the twenty eighth day after the end of the tax period.

Put dates on it, for a monthly filer. Services completed 1 March. Invoice must issue by 15 March. Output tax falls into the March period and reaches the Authority by 28 April. On sixty day terms the customer pays around 14 May, so you fund five percent of the invoice for about sixteen days; on ninety day terms, about forty six; and if a ninety day customer runs sixty days late, about a hundred and six. The standard tax period, though, is quarterly rather than monthly, and that cuts both ways: a supply early in a quarter can be collected before the tax is ever due, while a supply at the quarter end on long terms funds considerably more. The exposure is driven by where the supply falls in your tax period, and it is worth knowing which period the Authority has given you before you price the deal. What you cannot do is defer the invoice to defer the tax, because Article 59(13) compels you to issue it.

Bad debt relief exists but is tighter than its reputation. Article 64 of the Decree-Law requires four things cumulatively: the tax was charged and paid, the consideration was written off in whole or in part in your own accounts, more than six months have passed since the date of supply, and you have notified the customer of the amount written off. The six months runs from the date of supply, not from the due date and not from when the debt went bad, and the Authority's own clarification expects the notification to carry the unpaid invoice number and date and the amount written off. A vendor that has not taken the accounting write off under its own standards has no relief, whatever its aged debt report says. One thing worth knowing about that notice: under Article 64(2) it obliges the customer to reduce its own recoverable input tax by the same amount. The notification you have to serve to get your own relief imposes a cash cost on the customer, which makes it a collection step as well as a tax formality.

Saudi Arabia has already solved this problem, and the carve-outs are exactly where a European software vendor usually sits. From 1 November 2021 the Authority amended Article 20 of the VAT Implementing Regulations so that for establishments contracting with government entities under the procurement law, in its own words, "the tax due date would be the date of issuing the payment order for the claim related to taxable supplies according to the procedures of the Tenders Law or the date of receiving the consideration for the supply or part of it, whichever is earlier", expressly "to ensure that the entity gets the tax due on the supply before declaring it and paying it to the Authority in its periodic returns".

The Authority published five excluded cases in its own simplified guide at the time, and the first is the one that catches software vendors: supplies to state-owned companies, even where the State owns one hundred percent of them, because they do not fall within the concept of a government entity. The other four are supplies between one establishment and another, supplies to individuals, supplies by a subcontractor to a main contractor that in turn contracts with a government entity, and direct cash purchases made out of an entity's petty cash with no contract.

Read that as a commercial decision rather than a tax rule. A deal with a ministry or a public authority procuring under the Tenders Law means you never fund the Kingdom's payment cycle. A deal behind a local systems integrator means you fund it in full, on top of the margin you have given away. And the relief tracks the entity, not the owner: a one hundred percent state-owned national oil, telecoms or giga-project company is not a government entity for this purpose, and that is where a great deal of enterprise software actually lands. One lever if you are the subcontractor: Article 92(2) of the new procurement Law permits a government agency to make payments directly to a supplier, contractor or subcontractor, on conditions the Regulations will set.

Separately, Saudi withholding tax takes fifteen percent off a royalty under Article 68 of the Income Tax Law before late payment even becomes an issue. We cover the characterisation question, the treaty relief procedure and why relief is a reclaim rather than a certificate in our piece on Saudi market entry for technology companies.

What a government customer owes you when it pays late

Nothing, in money terms, in Saudi Arabia. No instrument provides interest, indexation or an automatic late payment charge against a Saudi government agency, and Article 178 of the Civil Transactions Law stops you agreeing one. Article 94(1) of the new Government Tenders and Procurement Law preserves the right to apply to "the competent court" to claim compensation, which means proving loss. The 2019 Law said "the Administrative Court" at Article 92(1); the new text drops the designation, and in practice these claims go to the administrative courts of the Board of Grievances. Article 94(2) makes arbitration against an agency conditional on the Minister of Finance's prior approval, so an arbitration clause agreed without it is worthless.

Worse, you cannot stop work. Baker McKenzie reads Article 98/2 of the 2019 Implementing Regulations as meaning "a contractor may not suspend work even where the Government Agency has failed to make payment", and reports a similar provision at Article 121/2 of the draft new Regulations.

The genuinely new lever is not a money remedy at all. Article 91 of the new Law, which takes effect on 2 January 2027, requires the Ministry of Finance to notify an agency that is late paying its contractors, and then provides that an agency which has not taken the necessary steps despite that notification may not issue a new award decision. We read the 2019 Law looking for an equivalent and there is none. The hostage is the agency's own procurement pipeline, which is a far better lever than a damages claim. Two caveats. Article 91(2) operates "in accordance with what the Regulations specify in this regard", and the Regulations are not out. And Clause Third of the Royal Decree keeps the 2019 Law applying to works and procurements tendered while it was in force, so whether Article 91 reaches a contract awarded before January 2027 is open. The carve-out in Article 91(3) is narrower than it first looks: it disapplies the bar where the delay is down to Ministry procedures, or where the agency has taken the necessary steps on the claim but there are no sufficient financial appropriations against it.

On the payment period itself, the new Law contains none. Article 65 says only that the dues of a contractor "shall be disbursed in accordance with what the Regulations specify", exactly as Article 67 of the 2019 Law did, and the new Regulations had not been gazetted as at 27 October 2026, although Article 99 requires them within 120 days of publication and to take effect with the Law.

Which leaves Article 109 of the 2019 Regulations, and a number worth correcting. Baker McKenzie's alert of 21 October 2026 puts the maximum payment period from submission of a payment claim at seventy working days under Article 109, with forty seven working days proposed at Article 131 of the draft new Regulations. We read Article 109 in the Arabic in two independently printed copies and it does not say that. The article runs to five numbered paragraphs, three of which carry periods: ten working days for the project consultant's inspection and report, fifteen working days for the agency to approve the certificate and raise the payment order to the Ministry, and then forty five days, plain days and not working days, for the Ministry to disburse. Four of the five paragraphs say working days. The fourth says days. Seventy working days is 10 plus 15 plus 45 read as though all three were working days, which the Arabic does not support, and seventy working days is about ninety eight calendar days against the roughly eighty the article actually produces. We also checked the full amendment history of the 2019 Regulations, recited in the amending decision gazetted on 5 June 2026: Article 109 has never been amended.

More useful than either figure: Article 109(4) provides that if the payment order is returned to the agency for amendment or clarification, the forty five days restarts from the date the agency sends it again. There is no true maximum. Plan on about eleven weeks from a clean payment claim and understand that one query resets the longest leg. Our piece on how long a GCC enterprise sales cycle is builds the pre-contract half of the same timetable.

In the UAE, the Abu Dhabi Executive Committee issued Circular No. 1 of 2019 on 26 March 2019, directing government bodies and companies to update their existing and future contracts so that payment is made within thirty days of receipt of a relevant invoice, and to pass equivalent terms down so subcontractors are paid within thirty days of the contractor receiving its own payment. It is worth knowing and worth quoting in a negotiation, but it is guidance rather than legislation and it prescribes no remedy for breach. We found no UAE federal commitment to a stated payment period, and no Dubai figure.

The cheque you finally banked is safer than you think

A vendor that finally extracts payment from a wobbling UAE customer is better protected than the folklore suggests, and the reason is a provision almost no note mentions. Article 161 of Federal Decree-Law No. 51 of 2023 provides that where the debtor pays the value of a negotiable instrument after the cessation of payment date and before proceedings are opened, the amount paid may not be recovered from the instrument's bearer. The refund obligation falls on the drawer, and only where the drawer knew of the cessation of payment when the instrument was issued. Bank your customer's cheque and the claim runs against your customer, not against you.

The real exposure is earlier and wider than the cheque. Article 148(1) makes certain acts unenforceable against creditors if the debtor carried them out "during the six months preceding the cessation of payment date", and two years where the counterparty is an insider or a related party. Limb (c) catches repayment of debts before the maturity date, and treats the funding of an unmatured negotiable instrument as premature repayment. Limb (d) is often misread as catching cheques generally: it catches payment of a due debt by means other than those agreed, and then expressly deems repayment through a negotiable instrument or bank transfer to be the same as cash repayment, which takes the ordinary banked cheque out of the limb rather than into it. So the cheque at risk is the one paid or funded early, not the one paid when due.

What makes the window much larger than six months is Article 32. The court fixes the cessation of payment date, may amend it until the list of debts is approved, and may backdate it by up to two years from the opening of proceedings. Six months of clawback hanging off a date that can itself sit two years back is two and a half years of exposure, and four and a half years for a related party. That is the number to plan against. The vendor's defence is in Article 150(2): an unenforceability action must be brought within one year of service of the decision opening the proceedings.

Two corrections worth carrying. A creditor petition is almost certainly out of reach, and the reason usually quoted is the wrong one. Article 16(1) leaves the minimum debt to the Executive Regulations, and Article 6 of Cabinet Resolution No. 94 of 2024 sets it at AED 1,000,000, rising to AED 10,000,000 where the debtor is subject to a regulatory authority, against AED 100,000 under the repealed 2016 law. But the harder bar in Article 16(1) is that the debt must be "unconditional, undisputed and payable", after a notice giving at least thirty days. A software vendor in a payment fight is almost always in a dispute. And the debtor is not obliged to file: Article 15(1) says it "may" apply within sixty days of cessation of payment, and expressly adds that failure to do so "does not result in the application not being admitted".

"Cessation of Payment" is now defined in Article 1 as failure to pay a due debt "after ten days have passed beyond the deadline specified in the relevant notice", even where the debtor's assets are more than sufficient. The widely repeated thirty business day test belonged to the repealed 2016 law, where it was a creditor petition gate rather than a definition.

Finally, the stay can reach execution and not only litigation, but it is not automatic. "Discontinuance of Claims" is defined as "the suspension of any action or executive measure initiated against the debtor", excluding labour and personal status actions, and Article 34(2) provides that the court may order it of its own motion or on the debtor's application. Once it does, your cheque's executory status buys nothing.

The official English of Federal Decree-Law No. 51 of 2023 on the UAE Legislation portal is truncated partway through Article 113. The articles above 113 described here come from an unofficial full text rendering and we have not checked them against the Arabic.

A Polish judgment is close to worthless. An award is not.

Treat this as the most consequential clause in the contract.

A Polish court judgment is realistically unenforceable in Saudi Arabia. Article 9(1) of the new Execution Law permits enforcement of a foreign judgment, having regard to the Kingdom's treaty obligations, "only on the basis of reciprocity", and then lists six conditions. There is no Saudi to Poland treaty on recognition of civil judgments and no Saudi practice of treating Poland as reciprocating. One of the six conditions is new and is a live defensive tactic: limb (b) requires "that there is no similar action pending in the Kingdom predating the registration of the action in which the foreign judgment or order was rendered". A Saudi debtor who files first in Riyadh can defeat enforcement of your later Polish judgment. Article 11 of the old Law had reciprocity plus five conditions and no equivalent. In fairness, the new conditions are not uniformly tighter: limb (a) only requires that the matter not be within the exclusive jurisdiction of a Saudi judicial body, where the old law also required the foreign court to have had jurisdiction under international jurisdiction rules.

Kuwait applies strict reciprocity under Article 199 of its Civil Procedure Law, on the reporting of Al Tamimi, which also lists Kuwait's bilateral judicial cooperation treaties without Poland among them. Bahrain opens Article 16 of its Execution Law, Decree-Law No. 22 of 2021, with the same reciprocity formula, that foreign judgments may be executed "under the same conditions provided for in that country's law for the execution of judgments and orders issued in the Kingdom of Bahrain", and adds the requirement that Bahraini courts not have been competent to hear the dispute, which is stricter still.

Arbitral awards are a different world. Saudi Arabia acceded to the New York Convention on 19 April 1994 and made only the territorial declaration, applying the Convention "only to recognition and enforcement of awards made in the territory of another contracting State". It did not make the reciprocal treatment reservation, and notes that say otherwise conflate the two. Qatar acceded on 30 December 2002 with no reservations, Oman on 25 February 1999 with none, Kuwait on 28 April 1978 with the territorial reservation, and Bahrain on 6 April 1988 with two. Poland has been a contracting state since 1962, so none of the territorial reservations bites. Budget time in the Kingdom: Article 55(1) of the Saudi Arbitration Law bars an execution petition until the sixty day nullification window under Article 51(1) has expired.

There is one more route that almost nobody uses. Under the GCC Convention for the Execution of Judgments, Delegations and Judicial Notifications, to which all six states are party, a judgment obtained in one GCC state travels to the other five without a merits review. Article 7 limits the receiving court to "confirming whether the judgment fulfills the requirements as provided by this agreement, without discussing the subject matter". Article 4(C) deems the issuing court to have had jurisdiction "if the contractual obligation, the subject matter of the dispute, is executed or should be executed in such state". So for a customer with assets in several Gulf states, contracting into the courts of one of them can be stronger than contracting into your own.

Two limits on that route. Article 2 keeps a Sharia, constitutional and public order gate, and bars enforcement of a judgment given against the government of the state where you are enforcing, or against its officials for acts done in the course of their duties; by its terms it does not reach state-owned companies or authorities with their own legal personality. And Article 2(D) carries the same first-to-file defence we have just flagged in Saudi Arabia: enforcement is blocked where the same dispute between the same parties is already before a court of the enforcing state and was filed first.

The published numbers are weaker than the law

If you are building a cash flow model, do not build it on a survey.

Atradius published its most recent UAE Payment Practices Barometer on 31 July 2026. It reports that businesses in the UAE transact "an average of 47% of business-to-business (B2B) sales on credit terms", that about three in five firms offer terms up to one month, that "roughly two in five invoices" are settled late, and that bad debt write-offs "account for just over 2% of B2B receivables". Of past due invoices, forty three percent are under thirty days late, twenty six percent thirty one to sixty, seventeen percent sixty one to ninety and fifteen percent beyond ninety, although the chart carrying that split is titled as a percentage of past due invoices while all four figures are sub-labelled as respondents, so the publisher does not make clear which it is counting.

Now the sample. Two hundred and forty web interviews of about fifteen minutes, conducted in the second half of the second quarter of 2026, of which sixty four percent were firms with under ten employees and thirty eight percent construction, with large firms of 250 or more employees at one percent. The sector split is industry, construction, trade and services, with no ICT or software category at all, and although services is thirty two percent of the sample, the only sector-specific thing the report says about it is that large services firms extend credit more often than other segments. Atradius itself says that "for this edition, comparisons with previous reports are not possible", because the panel was rebuilt. So the 2025 edition's eight percent bad debt figure cannot be put in a series with 2026's two percent, and in any case they are different measures: eight percent of overdue invoices against just over two percent of all B2B receivables. Nothing here supports a story about bad debt falling.

Allianz Trade's DSO report of 16 July 2026 does publish a Middle East and Africa row, and it is the longest collection period of any region in the data, at sixty one days of DSO against sixty one and a half days of payables, with a software and IT services figure of sixty one days for the same region. Neither is a Gulf number. The sample is listed companies' financial statements across fifty five countries, no GCC state among them, with Middle East and Africa at seven percent of roughly 25,000 firms. A regional median that lumps the Gulf with sub-Saharan Africa and is built from listed company balance sheets is not a collection period for your unlisted Saudi customer. Allianz also broke its own comparability in the same year as Atradius did, switching from a mean to a median approach, which it notes lowers most figures, and realigning its sector nomenclature.

The near-identical payables figure is the interesting thing in it. On Allianz's own numbers the region pays slowly and is paid slowly in near equal measure, so the vendor who grants Gulf length terms while paying its own suppliers on European terms is the one absorbing the gap.

Our conclusion is that there is no credible published collection period for enterprise software sales into any GCC market, and that the statutory ceilings above are a harder planning number than any survey average, because they are legal facts rather than self reported ones.

What this means in practice

Four things, in the order we would do them.

Decide the instrument before you decide the terms. In the UAE, Saudi Arabia and Qatar, ask for a cheque, dated to the payment date rather than the signature date. Article 648(1) of the UAE Commercial Transactions Law expressly validates that and prohibits early presentment: a cheque "shall not be presented for payment before that date". Article 638 confirms that taking it does not renew the debt, so you keep both the cheque and the contractual claim with its securities. One operational detail decides whether the cheque is worth anything: Article 667 operates on "the cheque on which the drawee states" there is no cover, and Article 663(1) requires that statement to be dated and written on the cheque itself. A vendor that sends the cheque to its European bank for collection and gets back an electronic return advice holds a piece of paper, not an executive instrument. Present through a UAE bank or a UAE collecting agent and get the endorsement on the instrument. In Saudi Arabia, if the customer offers a promissory note instead, make registration on a Ministry-approved national platform a condition of signature, because Article 6 of the Implementing Regulations requires the obligor's consent and you cannot register it unilaterally afterwards. In Bahrain a signed acceptance certificate is already enough, so get the acceptance in writing and keep the sum certain.

Write the money clauses to the jurisdiction, not to a template. State an interest rate expressly in UAE and Kuwaiti contracts, because the statutory ceiling, and in onshore Dubai the judicially applied five percent, bites only where you are silent. Define your accepted notice method in UAE contracts so a dunning email is valid under Article 81, and in Bahraini ones so the Article 324 demand is properly made. Do not put a late payment percentage in a Saudi contract at all: it is unenforceable under Article 178, and the space it occupies is better spent on a delivery linked liquidated damages clause, which is enforceable, and on a termination and data retention right that actually bites. One Saudi clause is worth adding in its place: Article 175 of the Civil Transactions Law makes compensation payable only after the debtor has been put on notice, while Article 176(a) removes that requirement where the parties have expressly or impliedly agreed that the debtor is in default on mere maturity. Agree it. If you have a Bahraini customer, invoice in euro.

Choose arbitration, seated in a New York Convention state, and never rely on your home courts. If the customer has assets across several Gulf states, consider the courts of one of them on the strength of Article 7 of the GCC Convention, remembering that the Article 2(D) first-to-file defence applies there too. If you are selling to a Saudi government entity, remember that an arbitration clause needs the Minister of Finance's approval to be of any use.

Price the tax and the route to market together. A Saudi deal with a ministry or public authority, sold directly, carries no VAT prefunding. The same deal sold through a local integrator does, and so does a deal with a state-owned company however large the state's shareholding. That is a real number and it belongs in the channel decision, alongside the local content scoring we set out in how Gulf enterprise procurement actually works.

If you are working out which of these applies to a deal in front of you, or structuring payment security into a first Gulf contract, get in touch.

Sources

This article is general information about the law as it stood on 27 October 2026 and is not legal, tax or accounting advice. Figures, article numbers and commencement dates are as at that date. Several of the instruments described here are new or changing: the Saudi Execution Law comes into force on 29 October 2026, the Implementing Regulations of the Saudi Government Tenders and Procurement Law had not been published, and the UAE Civil Transactions Law was replaced with effect from 1 June 2026. Quotations from instruments that have no official English text, including the Saudi Execution Law and its Regulations, the Saudi Government Tenders and Procurement Law and its Regulations, and the UAE Commercial Transactions Law, are translations rather than official texts, and the Arabic governs. Take advice from a lawyer qualified in the relevant jurisdiction before relying on any of it.