A centralized electronic commercial register managed by the local Ministry of Commerce will enter into force on March 30, 2025. The new Commercial Register Act pursuant to Royal Decree No. (M/83) of 19.3.1446 AH and Resolution No. (237) of the Council of Ministers of 14.3.1446 AH modernizes the law of the previous registration procedure
The law renders registration mandatory for all companies. Further, it requires that any changes to existing registration data be updated in a timely manner and provides clear procedures for deletions. It also introduces a structured framework of sanctions for violations. Overall, this new law represents a significant step forward in the regulatory environment and promotes a more reliable and efficient business environment for traders and companies.
A. Under the current law
- the registration requirement only applied to merchants with a capital of more than SAR 100,000.00. Accordingly, merchants had to register within 30 days of commencing business or reaching the defined capital limit;
- the paper-based system was based on physical documents, making access to information cumbersome leading to increased processing times;
- Changes were to be submitted via requests within 30 days, which often lead to delays in updating information, as the actual registration of the update in the register required additional time;
- Sanctions for non-compliance are fines, but these are generally not enforced.
B. Key features of the new law
- Universal registration requirement: all traders are required to register their business to ensure uniform compliance.
- Centralized electronic registration platform: an electronic system for submitting registration applications will be introduced, reducing processing time to just 10 days.
- Streamlined information requirements: Traders now only need to provide key data, such as trading name, legal form and capital
- Accelerated amendment procedures: Updates to registered data must be made within 15 days.
- Specific penalties for violations, higher fines (SAR 50,000.00) for repeated violations and provisions for issuing warnings before imposing fines.
For individual retailers, the new regulations have the advantage that
- business activities can be started earlier thanks to faster registration.
- improved transparency allows customers and interested entities to check officially registered company data.
- regular mandatory data updates will ensure that information remains accurate and reliable.
- comparable to the inspection of a German commercial register, traders can access important market data that can be decisive for well-founded business decisions.
The new law therefore fosters reliability and thereby strengthens the competitiveness of the market and is a further building block to attract investment.
