Business

Numerous Laws in Saudi Arabia: How Did They Help the Business Community?

Published

1 week ago

13th November 2024

Huda

Numerous Laws: Saudi Arabia has made remarkable strides in improving the business climate and has transformed into a globally recognised hub.

Saudi Arabia has made remarkable strides in improving the business climate and has transformed into a globally recognised hub in the pursuit of a prosperous economic future.

Additionally, the Kingdom has seen the emergence of numerous contemporary laws in a very short period. These laws were skilfully designed to boost business confidence and streamline processes, putting the Kingdom at the forefront of the most inventive and competitive nations. How did these laws depict the future, and what is the key to the swift rise to the top of the worldwide rankings?

Laws in Saudi Arabia: Landscape

The Kingdom of Saudi Arabia has created and released around 110 laws in the last eight years, which have improved the country’s business climate and made it easier for the private sector to establish and operate businesses.

These laws in Saudi Arabia have improved businesses’ adherence to market regulations, stimulated economic activity associated with Vision 2030, and helped the Kingdom rank fourth internationally in the “Legislative Support for Establishing Companies” ranking.

A new report from the Saudi Ministry of Commerce states that institutions have grown by 25%, increasing the number of commercial records to 1.18 million. Limited liability companies have grown by 108%, reaching 119,000 records, and joint-stock companies have increased by 30%, reaching 3,000 records.

These accomplishments were the consequence of significant government efforts to enact legislative and regulatory changes, which improved the business climate and lessened the constraints on businesses. Along with new rules for chambers of commerce, insolvency, and the accounting and auditing profession, the changes also included new restrictions for e-commerce, new companies, and commercial franchises.

The Anti-Cover-Up System, Trade Names, Commercial Register Regulations, and Commercial Treatments in International Trade are further noteworthy laws.

The government has also released significant laws, such as the Exhibitions and Conferences Authority, the Saudi Centre for Commercial Arbitration, the Foreign Trade Authority rules, the Saudi Centre for Economic Business, and the National Competitiveness Centre.

New Regulatory Frameworks

Speaking about the issue, Mohammed Muzaffar, the owner of the Mohammed Muzaffar Trading Establishment and the chairman of the board of directors of the Jazan Multipurpose Cooperative Society, commended the government’s efforts to improve the commercial and investment environment by re-engineering the systems. He emphasised that these efforts have increased the number of commercial registers and drawn in foreign businesses.

Moreover, he said that the Kingdom’s advancement in global competitiveness metrics, where it now ranks 16th out of 64 nations, is a result of the creation of laws.

The Cabinet’s approval of the Commercial Registry and Trade Names systems, according to Commerce Minister Dr. Majid Al-Qasabi, will help to streamline business and lessen burdens by organising the trade name reservation procedures in a way that protects their rights and increases their value, as well as by unifying the commercial registry at the Kingdom level. He also said that these new systems are in line with the ambitious economic and technological transformations of Vision 2030.

While the 23-article Trade Names System governs the processes for name protection and reservation, the 29-article Business Registry System helps streamline the registration process and the regular update of business data. With a leap to second position in the Digital Transformation of Companies Index and third in the Trade Exchange Index, as well as third in the Legislative Support and Trade Balance Indexes, the Kingdom has advanced in the 2024 Global Competitiveness Indicators.

The Investments’ Influx into Future-Oriented Industries

According to the Ministry of Commerce bulletin, the number of commercial records issued increased by 62% compared to the same period last year, and 135 thousand new records were registered, bringing the total number to over 1.5 million records in various regions of the Kingdom.

This indicates that the Kingdom of Saudi Arabia’s business sector has experienced remarkable growth as a result of the ongoing efforts to improve the commercial environment during the third quarter of 2024.

The bulletin highlighted the expansion of future industries linked to the Kingdom’s Vision 2030, including electronic games, financial technologies, and artificial intelligence, which continue to draw in more investments. E-commerce saw a 9.4% growth, reaching 39,769 records, demonstrating the sector’s significance as a cornerstone of the national economy.