Company registration in Saudi Arabia has become easier than ever under the new business registration law. In September 2024, the Council of Ministers approved two significant updates: the new Commercial Registration Law and the Trade Name Law. The law was published on 4 October 2024 and will be effective on 3 April 2025. Saudi Arabia is consistently taking steps to become one of the most appealing places for business and investment. The new Saudi Arabian business registration law streamlines the company registration process in Saudi Arabia. These changes are crucial for investors, entrepreneurs, and businesses looking to do business in Saudi Arabia.
In the case of foreign companies, registration starts with the Saudi Arabian Ministry of Investment (MISA), which oversees the process. Previously, multiple licenses were required for different activities, but the new Investment law simplifies this by introducing a single Investment Registration Certificate, making it faster and more cost-effective to start a business.
Below, we outline the salient changes simply and in detail into two broad parts: Commercial Registration and Trade Name Law.
Part 1: Commercial Registration in Saudi Arabia
The new Commercial Registration Law introduces several significant changes aimed at simplifying company registration in Saudi Arabia:
Single Commercial Register
- Before this, firms had to keep multiple subsidiary registers. The new law abolishes these so that a single commercial register can cover all commercial activities throughout Saudi Arabia.
- This highly minimizes administrative work and eases doing business.
Nationwide Validity
- No longer will companies be required to specify a city for registration. One single commercial registration now has validity in all areas within the Kingdom.
- This flexibility aids companies with operations in various locations, enabling them to grow effortlessly.
No Expiry Date
- The new legislation eliminates the expiry date on commercial registrations.
- Businesses must only verify their details annually, significantly lowering renewal complexities and administrative expenses.
Unified Commercial Number
- The commercial registration number of each establishment will now be its unified number, starting with the digit “7.”
- This makes identification easier, enhances transparency, and allows for easier interactions with government agencies.
Five-Year Transition Period
- Current companies with subsidiary registers will enjoy a five-year transition period to adjust and comply with the new law to avoid any disturbance in business activities.
These significant revisions are part of Saudi Arabia’s broader economic diversification drive to raise the private sector’s share of GDP to 65% from 40% by 2030. For those considering foreign company registration in Saudi Arabia, these revisions significantly ease the entry process, lowering bureaucratic obstacles and encouraging ease of business.
Part 2: New Trade Name Law
In conjunction with the commercial registration reforms, Saudi Arabia has also issued significant amendments to the Trade Name Law, improving flexibility and trade name protection:
English Names Now Permitted
- Previously, trade names could only be registered in Arabic. The updated law allows trade names to be registered in English, including letters and numbers.
- This move significantly benefits international investors and businesses looking to establish a brand presence recognizable both locally and internationally.
Ownership Transfer
- The law currently permits trade names to be dealt with independently of the business. This implies that trade names can be owned, transferred, or sold separately.
- This opens opportunities for new business ventures, mergers, acquisitions, and branding strategies, increasing business flexibility.
Exclusive Trade Names Protection
- Companies can no longer register the same or confusingly similar trade names, regardless of their differing business activities.
- This clause is intended to safeguard companies against brand confusion, promote brand value, and preserve a distinct identity in the market.
Family Name Reservations
- The new law also allows family names to be reserved as trade names, giving room for tailored branding that entails family heritage and tradition.
Rules for Prohibited Names
- Stringent standards for prohibited or deceptive trade names have been set forth to provide openness and uphold consumer confidence.
These reforms align with Saudi Vision 2030 to simplify procedures and safeguard trade name value during unprecedented economic and technological growth.
How Recent Changes in Company Registration in Saudi Arabia Impact Businesses?
- A single national commercial register has replaced the former structure of subsidiary registers under the new Commercial Registration Law. As a result, companies no longer require distinct registrations for every branch; instead, a single commercial registration is sufficient for all of Saudi Arabia.
- Companies that now have branch registrations must choose between combining their operations under the new consolidated registration or converting their branches into distinct legal entities.
- Foreign investors and entrepreneurs have much to gain from these eased procedures, lesser administrative requirements, and more flexibility.
- The simplification of company registration in Saudi Arabia means entrepreneurs can now complete registrations faster, saving both time and operational costs.
- This ease of doing business encourages foreign investment, fostering a competitive and dynamic business environment.
- Companies can swiftly enter the Saudi market, capitalize on new opportunities, and efficiently navigate regulatory landscapes without excessive delays or costs.
- Moreover, reduced administrative requirements mean businesses can better focus resources on their core activities rather than compliance-related paperwork.
Act Now: Start Your Company in Saudi Arabia Confidently with Helpline Group
For anyone looking to register a company in Saudi Arabia, it is vital to know these new regulations. Helpline Group in Saudi Arabia can easily walk you through the latest business registration laws and procedures. Our expertise guarantees your business is established quickly, securely, and by the new regulations. We simplify the process of commercial registration and trade names in Saudi Arabia and ensure strong protection and flexibility in handling your business identity. Whether you’re a local businessperson or are considering foreign company registration in Saudi Arabia, now is a great time to take action.
