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Saudi Arabia sees 60% surge in commercial registrations in 2024

The report noted that by the end of 2024, there were 1,606,169 active commercial registrations in all of Saudi Arabia's regions

The number of commercial registrations issued in 2024 increased by 60% over 2023, according to the Ministry of Commerce of Saudi Arabia.

The Ministry of Commerce’s report states that there were 521,969 commercial registrations granted in 2024 as opposed to 368,038 in 2023. 153,931 company registrations and 368,038 establishment registrations were among them.

Although the registrations covered a wide range of economic sectors, the manufacturing, construction, wholesale and retail trade, lodging, and food services sectors topped the list.

The report noted that by the end of 2024, there were 1,606,169 active commercial registrations in all of Saudi Arabia’s regions.

It is worth remembering that Saudi Arabia introduced new regulations in 2024 to streamline commercial registration and trade name processes. Approved in September, the laws aim to enhance business efficiency and improve the overall commercial environment.

The regulations, named “Law of Commercial Registration” and “Law of Trade Names” respectively, consolidate all business activities under a single registration, eliminating the need for sub-registrations, reducing administrative burdens, and offering a five-year grace period for compliance.

These reforms align with “Saudi Vision 2030,” enhancing business transparency through the requirement of linked bank accounts and making registration data more accessible and accurate.

The Law of Commercial Registration, which comprises 29 articles, streamlines business processes by organising registration procedures, ensuring data accuracy, and making it accessible for easy reference. It further eliminates the need for sub-registrations by allowing businesses to operate under a single commercial register, covering all their activities nationwide, apart from reducing financial costs.

A five-year grace period has been provided for businesses to update their sub-registrations. Additionally, the law mandates that businesses open bank accounts linked to their registrations to enhance transaction reliability and transparency.

As per the Centre for Economic Studies at the Federation of Saudi Chambers of Commerce, the Kingdom’s business landscape will witness a groundbreaking shift with local investment projected to grow by up to 8.8%, as the new Law of Commercial Registration enters the fray now.

Published in November 2024, the report further stated that the Saudi private sector, apart from effecting SR1.7 trillion contribution to the GDP, has also resulted in a total of 1.5 million active commercial registrations. There have been significant strides in localisation, currently at 28%, and the growing role of women in the workforce, where participation rates reached 35.4 per cent.

The report further highlighted tangible benefits expected from the registration-related reforms. For example, by eliminating sub-registries, businesses are projected to save SR80 million to SR110 million annually. This financial relief is expected to spur investment growth, with local investments anticipated to rise between 7.4-8.8%.

Furthermore, the number of branches for economic establishments will increase by 3.8-5.3%, underscoring the reforms’ potential to foster expansion and innovation.

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