New Commercial Registration Law in Saudi Arabia: What Changed

You opened a shop, then decided to add another activity and open a location in a second city. You might start by looking for a new commercial registration (CR) for each branch, but the more important question now is: how do you record your activities, branches and details correctly in your registration? The new law changed the way the register works, but it did not turn licences, contracts and business obligations into a single procedure.

The main changes: a trader is registered once, even with several activities and branches, so there is no sub-registration for each branch (Article 6 of the Implementing Regulations). Holders of old sub-registrations have five years from the law's entry into force to correct them before they are deleted. A trader must now update any change in its details within 15 days (Article 10) and submit an annual confirmation of its details, or its registration is suspended (Articles 11 and 15). A violation can lead to a fine of up to SAR 50,000 (Article 21).

If your company is licensed in one of the special economic zones of Jazan, Cloud Computing, King Abdullah Economic City or Ras Al-Khair, Royal Decree M/140 of 1447H exempts it from the Commercial Register Law and the Trade Names Law, and the rules of those zones apply to it.

One registration per trader, even with several activities

The Commercial Register Law was issued by Royal Decree No. M/83 dated 19/3/1446H. Article 6 of its Implementing Regulations provides that a trader is registered once, even if it has several activities and branches. This means one registration for the trader itself. If a person owns shares in several companies, those companies do not become one trader.

Article 9 of the law allows different activities to be registered without requiring them to be related, subject to the laws that govern those activities. So your business can be varied, but registering an activity does not replace the licence required by the authority that supervises it.

Holders of sub-registrations that existed before the law came into force have five years from its entry into force to correct their position. All sub-registrations are deleted when that period ends, under a mechanism set by the Ministry of Commerce (Item Three of Royal Decree M/83 of 1446H). So do not assume every old sub-registration disappeared immediately, and do not treat it as permanent either.

The Ministry of Commerce's «Mechanism for Correcting Sub-Commercial Registrations» gives three options: convert the sub-registration into a new company, to which its licences, approvals and activities pass; transfer it to another person not registered in the Commercial Register; or delete it, so its licences and activities attach to the main registration. Until you correct it, you must keep submitting its annual confirmation. When the period ends, the registrar deletes all sub-registrations and reserves the trade name linked to each for 60 days from deletion.

Watch the licence deadline: if you register an activity that needs a licence, you must obtain it within 90 days of registering the activity, or the registrar deletes the activity unless it extends the period (Article 4 of the Regulations). You must also provide your bank account details within 90 days of registration (Article 3 of the Regulations).

Why do the registered details matter more than the certificate?

The registration application includes details such as the trade name, legal form, capital, managers and their powers, and head office address. These are not formalities. A supplier may deal with a former manager, or send a claim to an address that is no longer correct.

Article 10 requires the trader to update its details within 15 days of a change. Do not wait for the annual confirmation to record a change that happened today. Article 17 provides that the registered details can be relied on by or against the trader, and that a detail which must be registered or updated cannot be relied on against third parties before it is registered or updated, although an interested party may rely on it against the trader.

In practice, keep the resolutions changing management, address documents, update requests and confirmations that they were completed. If the contract and the register differ, the date of each document can help show the position at the time of contracting, instead of relying on a recent printout that does not explain the past.

Does the annual confirmation replace the duty to update?

No. The law requires an annual confirmation of the registered details. Article 10 of the Regulations sets the due date at one full year from registration, and allows it to be submitted up to 30 days early. The idea is to review and confirm the business's details regularly, not to postpone every change to the end of the year.

The fee for the annual confirmation is the same as the registration fee, set by the schedule attached to the Regulations (Article 18): SAR 500 for a sole proprietorship, SAR 1,000 for a general or limited partnership, SAR 1,200 for a limited liability company, and SAR 1,600 for a joint stock company, simplified joint stock company or foreign company branch. Each update of details costs SAR 100, and a detailed data extract costs SAR 100.

If the confirmation is not submitted within 90 days of the due date, the registration is suspended after 14 days' warning to the trader. Suspension also suspends all licences issued for the registration. It lasts one year, during which it can be lifted by submitting the confirmation and paying the fee and fine. If the year ends without this, a sole proprietorship's registration is deleted. A company or a branch of a foreign company may no longer ask for the suspension to be lifted, and the Ministry may seek dissolution of the company (Article 15).

Displaying CR details and fines

The trader must display its registration details through the unified electronic code (QR code) in a clear place inside and outside the shop, and on its website if it sells online (Article 16 of the law and Article 14 of the Regulations). Anyone who provides false information, fails to register, fails to update, fails to submit the annual confirmation, or fails to display the details faces a fine of up to SAR 50,000, which may be doubled for a repeat within three years (Article 21). The schedule of violations in the Regulations sets the fine for each violation; for example, failure to update details is SAR 500 (Article 19 of the Regulations).

Example: expanding an existing shop

The owner of a sole proprietorship sells household goods and wants to add another activity and open a branch. He starts by checking the new activity and its licence requirements, then updates his registration details and completes what is needed for the branches. He should not conclude that, because there is one registration, a new location is automatically licensed.

On the other side, a supplier who will deal with him can check the trader's details, the status of the registration and the signatory's authority. A valid registration helps confirm identity, but it does not by itself prove that the business can pay all its debts.

What if your application is refused or there is an error?

A refusal of a registration application must give reasons, and the applicant may file a grievance with the Ministry within 60 days of being notified of the refusal (Article 7). If the reason is a gap or error that can be fixed, correcting the documents may be faster than a dispute, depending on the reason for the decision.

Clerical or procedural errors have a correction route under Article 19: the registrar corrects the error within five days of discovering it or of your request. But if the disagreement is about who actually owns the business or what the managers' powers are, not every dispute on the merits is a simple typing error. Anyone affected by a decision under the law may challenge it before the competent court within 30 days of being notified (Article 25).

This is general information based on the official Arabic texts of Saudi laws, which prevail over any translation. It is not legal advice for your specific case.

Practical solutions for business owners and those dealing with them

If you own the business:

• Review your old sub-registrations and plan to correct them before the five-year period ends.
• Update any change of manager, address or capital within 15 days; do not wait for the annual confirmation.
• Put the annual confirmation date in your calendar. You can submit it up to 30 days early.
• Obtain the licence needed for each new activity within 90 days of registering it.
• Display the unified electronic code in your shop and on your website.

If you deal with a business (as a supplier, client or creditor):

• Check the registration status and the manager's name and powers before signing; the registered details can be relied on against the trader.
• Ask for a detailed extract of the registration if the amount is large.
• If the registration is suspended, ask for a statement of the plan to fix it before delivering or paying.
• Keep a copy of the register details at the time of contracting, because they may change later.

If you have old sub-registrations, a suspended registration or a refusal decision, send us on WhatsApp a copy of the registration status and the notices you received, and we will explain the right next step.