Saudi Arabia commercial register and trade names laws will help transform business landscape

Dr. Sairah Narmah-Alqasim and Ibrahim Alajaji of Pinsent Masons were commenting after the new laws came into effect earlier this month. These laws are set to simplify and modernise the way businesses operate in the KSA, aligning with the ambitious Vision 2030 initiative.

One of the most significant changes introduced by the new laws is the simplification of company registration processes. The new laws introduce a unified national commercial registration system, eliminating the need for multiple subsidiary registers.

“This simplifies the registration process and reduces administrative burdens for businesses,” said Narmah-Alqasim.

Under the new regulations, businesses can now conduct diverse activities under a single commercial registration, “allowing for greater flexibility and the ability to adapt to changing market conditions”, said Alajaji. This will allow businesses to significantly reduce paperwork and streamline operations.

“This move is expected to enhance efficiency and reduce the time and resources spent on administrative tasks, allowing businesses to focus more on their core activities. This change is also expected to foster innovation and growth within the private sector, as businesses can pivot and diversify their offerings with ease,” Alajaji said.

Another notable feature of the new laws is the enhanced management of trade names. The new regulations allow for reservation and registration of trade names in English, including letters and numbers. This change facilitates the use of internationally recognised trade names and enhances brand protection. The ability to register trade names in English is particularly beneficial for companies looking to expand their reach beyond the KSA as it ensures consistency and recognition in international markets.

To ensure the accuracy and up-to-date status of business information, the new laws introduce an annual confirmation requirement for the commercial register.  Unlike the previous system, where the commercial register had an expiration date, businesses must now confirm their registration information annually. This requirement aims to help maintain the integrity of the commercial register, ensuring that all data remains current and reliable. Businesses that fail to confirm their information within the stipulated time frame risk suspension and eventual cancellation of their registration, emphasising the importance of compliance.

These changes are part of the KSA’s broader Vision 2030 initiative, which aims to create a more business-friendly environment, attract investment, and stimulate private sector growth. 

“Businesses operating in the KSA are encouraged to familiarise themselves with the new regulations and take advantage of the opportunities they present. With a more streamlined and efficient registration system, enhanced brand protection, and the flexibility to adapt to market changes, the KSA is poised to become a beacon of economic growth and development in the region,” said Sarah Khasawneh of Pinsent Masons.