RIYADH. Saudi Arabia’s new Law of Commercial Register and Law of Trade Names have officially taken effect as of Thursday, April 3, marking a transformative shift in the Kingdom’s business landscape. The reforms, announced by the Ministry of Commerce in September 2024, eliminate bureaucratic hurdles, modernize trade name rules, and align with Vision 2030 goals to enhance competitiveness and attract global investors.
5 Key Changes in the Law of Commercial Register
- Single Register Nationwide: Subsidiary registers are abolished — businesses now need only one commercial registration (CR) valid across all regions. Previously, separate registrations were required per administrative area.
- No Expiry Date: Commercial registers no longer expire but require annual data confirmation. Earlier laws mandated renewal every five years.
- Unified ID Number: All establishments will adopt a “7”-starting unified number as their commercial ID.
- Grace Period: Existing subsidiary registers get five years to comply with the new system.
- Penalty Alternatives: Violations can now be resolved through warnings or corrective actions instead of immediate fines.
4 Transformative Updates to Trade Name Rules
- English Names Permitted: Trade names can now include English letters, numbers, or symbols — a first after decades of Arabic-only mandates.
- Name Ownership Transfer: Businesses can now sell or transfer trade names independently, unlike previous restrictions tying names to specific establishments.
- Stricter Name Protections: Identical or similar names are banned even for different activities. Earlier laws allowed duplicates if business sectors differed.
- Family Name Usage: Families can reserve surnames as trade names, with clearer rules to block misleading or offensive terms.
Why It Matters
- Ease of Doing Business: Simplified registration cuts bureaucratic hurdles for local and foreign investors.
- Global Alignment: English trade names boost Saudi Arabia’s appeal to multinational firms.
- Transparency: Unified registers and stricter naming rules reduce fraud risks.
Abdulrahman Al-Hussein, Ministry of Commerce spokesperson, stated: “These laws mark a historic shift in Saudi Arabia’s commercial ecosystem. By eliminating redundant processes and modernizing trade name rules, we’re empowering businesses to focus on growth, innovation, and global competitiveness.” The reforms are expected to accelerate Saudi Arabia’s climb in global business rankings, currently 62nd in the World Bank’s Ease of Doing Business Index. With 1.3 million SMEs operating in the Kingdom, the changes could unlock billions in untapped economic potential.