Saudi authorities have shut down an illegal operation in Riyadh that allegedly trained workers who had absconded from their sponsors to establish and operate online stores for their own benefit, according to local media reports.

Illegal Operation Discovered in Riyadh

The site, located in the capital’s Al Batha district, was uncovered during a joint inspection campaign involving the Ministry of Commerce, the Ministry of Human Resources and Social Development (MHRSD), and field enforcement officers from Riyadh police.

Authorities found that Asian workers were being trained at the premises to establish and manage e-commerce businesses independently, in violation of Saudi regulations.

Workers Referred to Relevant Authorities

The Ministry of Commerce said in a post on X that workers found to be in violation of regulations had been detained.

The two residents were referred to the relevant authorities, while the foreign investor was referred to the Ministry of Investment for further action.

Saudi E-Commerce Regulations

Saudi regulations establish a range of requirements for businesses operating in the e-commerce sector. These requirements cover areas including licensing, registration, disclosure and consumer protection.

Online businesses are required to meet applicable regulatory requirements, which may include obtaining a commercial registration or appropriate freelance documentation and verifying the online store through the relevant authorities.

Tax and Registration Requirements

E-commerce businesses must also comply with applicable registration requirements of the Zakat, Tax and Customs Authority (ZATCA), including obtaining a tax number where required.

Information Online Stores Must Disclose

E-commerce operators are required to provide consumers with key information about their businesses and services.

This can include:

• Commercial registration or other relevant registration details.

• The name and address of the service provider.

• Effective contact channels for customers.

• An email address, telephone number or instant messaging service for enquiries and complaints.

Price and Delivery Information

Online stores must clearly display the total price of goods or services before the customer completes payment.

The displayed price should include applicable shipping costs, delivery charges and taxes.

Businesses must also provide clear information about delivery times or service fulfilment periods and must not use misleading information or practices that could deceive consumers.

Key Points

• Saudi authorities shut down an alleged illegal operation in Riyadh’s Al Batha district.

• The operation allegedly trained absconding workers to establish and manage online stores independently.

• The inspection involved the Ministry of Commerce, MHRSD and Riyadh police enforcement officers.

• Two residents were referred to the relevant authorities, while a foreign investor was referred to the Ministry of Investment.

• E-commerce businesses in Saudi Arabia must comply with applicable licensing and registration requirements.

• Businesses may be required to obtain commercial registration or appropriate freelance documentation.

• E-commerce operators must comply with applicable ZATCA registration and tax requirements.

• Online stores must disclose key business and contact information to consumers.

• Stores must clearly display total prices, including applicable shipping charges, delivery costs and taxes before payment.

• E-commerce businesses must provide clear delivery or service fulfilment information and avoid misleading consumers.