Saudi Arabia’s Ministry of Commerce announced the implementation of the new Law of Commercial Register and Law of Trade Names, along with their associated regulations, effective today, April 3.
The ministry noted that the new laws, approved in September 2024, seek to facilitate starting and operating a business in Saudi Arabia and reduce the financial burden on enterprises. They also aim to regulate commercial registration procedures and protect and enhance the value of trade names across the Kingdom.
Subsidiary registers eliminated
Saudi Arabia’s new commercial register law, consisting of 29 articles, contributes to facilitating the conduction of business by regulating the procedures for registration in the Commercial Registry, ensuring the accuracy of the recorded data, updating it periodically and making it available and easily searched and accessed.
The ministry’s official spokesperson Abdulrahman Al-Hussein noted that the new commercial register law introduces major changes. Among the key changes are the elimination of subsidiary registers, with a single commercial register now being sufficient. Additionally, the law removes the requirement to specify the city of registration, allowing one commercial registration to apply across all regions of the Kingdom.
The new law also obligated commercial establishments in Saudi Arabia to open bank accounts linked to the establishment in order to enhance its reliability and ensure the integrity of its transactions. Businesses also must obtain activity licenses within 90 days of registration, with exceptions for extended periods granted by licensing authorities
In addition, the law cancels the expiration date for the commercial register, requiring only an annual confirmation of the data, the spokesman stated. Under the law, the commercial registration number will serve as the establishment’s unified number, starting with (7). The ministry will grant existing subsidiary registers a five-year grace period to rectify their status in accordance with the new regulations.
Facilitating trade name registration in English
Meanwhile, the new Law of Trade Names in Saudi Arabia, which consists of 23 articles, aims to regulate the procedures for reserving and recording names in the commercial register, maximizing their value, and protecting them and their rights. The law allows a trade name to be reserved before it is recorded for a specific period that can be extended. It also sets the requirements that must be met by trade names to be registered or reserved, and the criteria for prohibited names.
Al-Hussein explained that the new regulations also allow for the reservation and registration of trade names in English, including letters or numbers. This marks a departure from the previous law, which permitted only Arabic names without foreign characters or numbers. In an effort to enrich the Arabic content, the law also created the Arabic Language Experts Platform, which aims to increase the linguistic stock of Arabic names in the commercial environment.
The new law will enable the management of trade names independently from the establishment, allowing for the transfer of their ownership while prohibiting the registration of identical or similar names for different establishments in Saudi Arabia, even if their activities differ. Al-Hussein noted that the law also includes regulations for reserving family names as trade names and establishes criteria for prohibited or misleading names.
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Keeping pace with Vision 2030’s transformation
Saudi Arabia’s new Law of Commercial Register and Law of Trade Names were approved on September 17, 2024, by the Council of Ministers.
Following their approval, Dr. Majid bin Abdullah Al-Kassabi, Minister of Commerce, explained that the issuance of the new laws contributes to facilitating the conduction of business, reducing the burdens on commercial establishments, for which it will be sufficient to hold one register at the level of the Kingdom, and regulating the procedures for reserving names to protect them and enhance their values. He added that the two laws keep pace with economic and technical developments and the unprecedented transformation that the Kingdom is witnessing under Saudi Vision 2030.
