Saudi Arabia Implements Major Reforms to Commercial Registration and Trade Name Laws
Saudi Arabia has officially put into effect its new Law of Commercial Register and Law of Trade Names as of April 3, 2025, introducing significant changes aimed at simplifying business setup and operations within the Kingdom. Announced by the Ministry of Commerce, these reforms are designed to streamline procedures and align with the goals of Vision 2030.
Streamlining Business Registration
The new Law of Commercial Register introduces several key updates to simplify the process for businesses:
Single Commercial Register: The requirement for subsidiary registers has been abolished. Businesses now only need one main commercial register.
Kingdom-Wide Validity: The need to specify a city of registration is removed; a single registration is now valid across all regions of Saudi Arabia.
No Expiration Date: The commercial register no longer expires. Instead, businesses only need to perform an annual confirmation of their data.
Unified Number: The commercial registration number will serve as the establishment's unified number, starting with the digit '7'.
Major Changes to Trade Name Rules
The updated Law of Trade Names brings important modernizations:
English Trade Names Allowed: Businesses can now reserve and register trade names in English, including letters and numbers. Previously, only Arabic names without foreign characters were permitted.
Independent Ownership: Trade names can now be managed and ownership transferred separately from the commercial registration of the establishment itself.
Naming Restrictions: The law prevents the registration of identical or similar trade names for different businesses, regardless of their activities, and sets rules for using family names or potentially prohibited/misleading names.
Why These Changes Matter (Vision 2030 Alignment)
These legal updates are a significant part of Saudi Arabia's efforts under Vision 2030 to improve the business environment, attract investment, and boost the private sector's contribution to the economy. The changes aim to make starting and managing a business easier and more flexible, reflecting the Kingdom's economic and technological advancements. This comes as Saudi Arabia saw a reported 60% increase in commercial records issued in 2024.
Transition Period
Existing subsidiary commercial registers have a five-year grace period to comply with the new regulations requiring a single main register.
Looking Ahead
These modernized laws significantly simplify critical aspects of business registration and branding in Saudi Arabia. The allowance of English trade names, in particular, is a major shift that will benefit both local companies with international ambitions and foreign entities entering the Saudi market. These changes are expected to further enhance the ease of doing business in the Kingdom.
Source: Arab News