Commerce

The Kingdom of Saudi Arabia enjoys distinct investment opportunities and potential, supported by its abundant natural resources and strategic geographical location linking the three continents of the world. Under Saudi Vision 2030, successful economic reforms have been implemented that have contributed to creating new trade opportunities, enhancing Saudi Arabia’s strategic assets, and stimulating and diversifying economic growth.

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Trade in Saudi Arabia

The Kingdom of Saudi Arabia is taking unprecedented steps towards a revolutionary transformation in the Trade Sector, occupying a leading position in global indicators of international trade. Supported by an ambitious vision and an approach in line with global economic trends, the Kingdom has succeeded in becoming an attractive center for local and international investments. With this economic dynamism, the Kingdom is paving the way to build a strong and sustainable economy that keeps pace with the aspirations of Vision 2030, and enhances its promising potential to achieve comprehensive development that makes a fundamental difference at the economic, social and political levels, locally and globally.

As part of facilitating the business environment, the Kingdom has restructured the procedures required to start commercial activities, making them easier and smoother. The commercial register is now issued through integrated electronic steps that are directly linked to the relevant government agencies, such as “Balady” platform, the General Organization for Social Insurance, and other relevant entities. Requirements also vary according to the type and size of the commercial activity, allowing flexibility that meets the needs of investors and contributes to the development of various sectors.

- To view the Implementing Regulation of the new Companies Law, click here.

Starting a Business

As part of its efforts to improve the business environment and facilitate the entrepreneurial journey, the Kingdom of Saudi Arabia has simplified all procedures related to starting a business, ensuring a smooth and comprehensive experience for investors and business owners. To achieve these goals, the Kingdom has established the “Saudi Business Center”, which is an integrated platform to facilitate the start-up and practice of economic activities, while enhancing the Kingdom’s competitiveness. The Center contributes to improving the quality of government requirements by reducing the time and costs associated with government services and licenses required for the private sector, which enhances the efficiency of operations and accelerates the pace of establishing businesses.

The Saudi Business Center offers a variety of services, including:

Issuing a Commercial Register for a Sole Proprietorship

An electronic service that enables the investor to start practicing commercial activity, through which a main or subsidiary commercial register is issued for the Establishment.

Establishing Joint-Liability Company

An electronic service that enables the investor to start practicing commercial activity and establish a joint-liability company, established by two or more natural or legal persons; they are personally responsible for all their funds and jointly responsible for the company’s debts and obligations. The partner acquires the status of a merchant.

Establishing Limited Partnership

An electronic service that enables the investor to start practicing commercial activity and establish a simple limited partnership, consisting of two parties (Active Partner), who is responsible for the company’s debts and obligations, and (Dormant Partner), who is only responsible within the limits of his share in the capital.

Establishing Limited Liability Company

An electronic service that enables the investor to start practicing commercial activity and establish a limited liability company, established by one or more persons of natural or legal status. Its liability is independent of the financial liability of each partner or owner thereof. The company is solely responsible for the debts and obligations incurred thereby or arising from its activity. Its owner or partner therein is not responsible for these debts and obligations except to the extent of his share in the capital.

Small and Medium Enterprises

Small and Medium Enterprises (SMEs) are a cornerstone of economic development worldwide. The Kingdom of Saudi Arabia attaches great importance to this sector as a key driver for consolidating and diversifying the economy, promoting sustainable development, and creating new job opportunities, in addition to being an incubator for creativity and innovation. Recognizing this pivotal role, the Kingdom has provided technical and advisory support to SMEs, helping them realize their development potential. The establishment of the General Authority for Small and Medium Enterprises and supporting its revenues highlights the government’s commitment to developing this vital sector.

The Kingdom has provided comprehensive support to small and medium enterprises in various ways, including:

Providing consulting to entrepreneurs and promoting the culture of entrepreneurship in a systematic and sustainable manner.

Empowering establishments through programs specifically designed to meet their needs, providing training services, and administrative and marketing support that helps them achieve business professionalism.

Providing easy financial loans to project owners through licensed financing companies.

Establishing clear policies and standards for financing projects classified as small and medium enterprises, which enhances their competitiveness and economic sustainability.

Small and Medium Enterprises General Authority (Monsha'at)

The Small and Medium Enterprises General Authority, known as “Monsha’at”, was established in 2016 A.D with the aim of regulating and developing the small and medium enterprises sector in the Kingdom of Saudi Arabia, in accordance with the best international practices. “Monsha’at” seeks to enhance the productivity of these enterprises and increase their contribution to the gross domestic product from 20% to 35% by 2030, in line with the goals of Saudi Vision 2030.

“Monsha’at” focuses its efforts on preparing, implementing and supporting initiatives and programs that enhance the culture of entrepreneurship, encourage innovation and freelancing. It also seeks to diversify funding sources for small and medium enterprises and stimulate venture capital sector initiatives. The Authority is responsible for setting policies and standards related to financing projects classified within this sector, while providing administrative and technical support that enhances the capabilities of enterprises in the areas of management, finance, marketing, human resources development, and other vital aspects to achieve sustainable growth.

Small and Medium Enterprises Statistics 2024

The small and medium enterprises sector in the Kingdom witnessed remarkable growth during the second quarter of 2024, as the number of commercial records issued increased by 78% compared to the same quarter of 2023. The total number of commercial records by the end of the second quarter of this year amounted to 1.5 million records.

Establishments also recorded a growth of 4.3% compared to the first quarter of the same year, reflecting the continuous development and increasing interest in this pivotal sector in supporting the national economy and achieving sustainable development goals.

- For more statistics click here

Regulations and Laws related to Small and Medium Enterprises

The amended regulation for organizing business incubators is a comprehensive regulatory framework that aims to promote entrepreneurship and organize the work of incubators in accordance with best practices. The regulation includes a number of main axes that include definitions, objectives, and scope of application, in addition to organizing the business incubator registry, license application requirements and study, and procedures for initial approval and issuance of the license. The regulation also specified the conditions of the headquarters and the basic and optional services that incubators must provide, in addition to the obligations of business incubators and beneficiaries to ensure compliance with quality and efficiency standards.

The regulation addressed inspection and oversight mechanisms to ensure compliance, the relationship of the supervisory body with business incubators, identifying violations and mechanisms for dealing therewith. It also included classification and evaluation criteria, provisions for grievances and objections to decisions, in addition to decisions and instructions related to implementing the regulation. It also clarified the procedures for publishing the regulation and its entry into force.

- To view the document details, click here.

Organization of the General Authority for Small and Medium Enterprises

The General Authority for Small and Medium Enterprises aims to organize the enterprises sector in the Kingdom of Saudi Arabia and enhance its role in the national economy. The Council assumes the supreme authority of the Authority, where it holds its meetings at the Authority's headquarters under the chairmanship of the Chairman of the Council. The Council also appoints a Governor for the Authority and may dismiss him from his position by a decision of the Council. The Authority has an independent budget, and manages its financial resources independently, with its commitment to submit its annual final account to the Council of Ministers.

- To view the details of the Law, click here.

Government Tenders and Procurement Law and Implementing Regulation

This Law replaced the Government Tenders and Procurement Law of 1427 A.H, with the aim of regulating tender and procurement processes in government agencies according to the highest standards of transparency and efficiency. The law defines the definitions, objectives and basic principles that enhance integrity and justice and raise the efficiency of government spending, and includes the scope of application and planning and organizational mechanisms to ensure efficient implementation of procurement.

The Law includes a unified electronic portal to facilitate procedures, in addition to organizing the qualification of bidders, preparing tender documents, determining the terms and technical specifications, and criteria for evaluating bids to achieve the best value for Government Agencies. It also addresses issues of fragmentation, solidarity of bidders, and identifies the types of tenders and different procurement methods, including general and limited tender, direct purchase, framework agreements, and electronic reverse auctions, while focusing on localizing the industry and transferring knowledge to support local content.

The Law sets transparent rules for bids and awards, including financial guarantees, bid inspection and review, contract conclusion and implementation, in addition to regulating price adjustments, contract assignment, and subcontracting according to precise controls. It also addresses penalties and sanctions for breach of contractual obligations, procedures for terminating contracts and evaluating performance, regulating the sale of movables, and complaint mechanisms and handling violations.

Finally, the Law includes final provisions related to publication and enforcement, in order to ensure its effective implementation, which contributes to developing the Government Tender and Procurement Law and supporting sustainable development.

- To view the details of the document, click here.

Internal By-Law for the Initiative to Refund Government Fees Paid by Small and New Establishments (Amended) of 1440 A.H

This By-Law defines the regulatory framework for the initiative to refund government fees paid by small and new establishments, including the provisions and procedures necessary to implement it efficiently and transparently. The By-Law includes basic definitions, an introduction that explains the context and objectives of the initiative, in addition to its scope of application and the beneficiary categories.

It also specifies the requirements that should be met by establishments eligible to benefit from the initiative, while indicating the fees covered by its provisions. The by-law obliges establishments to comply with a set of specific obligations, while clarifying potential violations and the penalties resulting therefrom. The bylaw also includes inspection and oversight mechanisms to ensure compliance with the provisions of the initiative, in addition to forming an objections committee, clarifying the objection mechanism and procedures followed to consider submitted applications. It also highlights the competencies and tasks of the Entity responsible for implementing the initiative, in addition to defining the tasks of the work team, and the role of the Ministerial Committee in supervision and guidance.

This bylaw reflects the commitment of the relevant Entities to support small and new establishments, and enhance the business environment by facilitating procedures and reducing financial burdens, which contributes to stimulating economic growth and supporting entrepreneurship.

- To view the details of the document, click here

Commercial Data Law and Implementing Regulation

This Law sets the regulatory framework for commercial data, including provisions and controls that ensure the accuracy and transparency of the information provided to consumers. The Law includes the definition of the commercial statement, and the commitment to use the specified language for writing it, while emphasizing the necessity of its conformity to reality and preventing any misleading content. The Law specifies the controls related to the use of awards and honorary degrees in product descriptions, in addition to the rules regulating the recording of the seller's name or address or the name of the producing entity thereon, while specifying the manner in which this data should be placed to ensure its clarity and accuracy.

The Law also addresses the penalties resulting from violations, the mechanisms for controlling them, and identifying the Entity responsible for investigation and prosecution, in addition to trial procedures. The Law also specifies the provisions for its implementation to ensure the effective application of its provisions and achieve its objectives in enhancing reliability and transparency in commercial data.

- To view the details of the Law, click here.

Anti-Concealment Law

The new Anti-Concealment Law was issued to replace the previous law issued by Royal Decree No. (M/22) dated 04/05/1425 A.H, as it includes a comprehensive set of provisions aimed at combating the phenomenon of commercial concealment and enhancing the economic environment in the Kingdom. The law includes defining terms related to concealment, identifying related crimes and violations, and mechanisms for control, investigation and prosecution. It also specifies the penalties for violators, with clarification of the final provisions of the law, including the mechanisms for publication and its entry into force.

- To view the details of the document, click here.

Professional Companies Law and Implementing Regulation

The Professional Companies Law and its Implementing Regulation were issued to replace the Professional Companies Law issued in 1412 A.H. The law included the definition of related terms, the identification of the forms of professional companies, the procedures for establishing and converting them into different forms. The law also included controls for licensing the establishment and drafting the memorandums of association, in addition to regulating the practice of commercial activities and setting rules for choosing the name of the company and its management. The law also addressed aspects related to professional errors and compensation therefor, and mechanisms for dealing with the loss of the license or the death of one of the partners or the confiscation and attachment of the general partner. It also stipulated violations and the penalties arising therefrom, and established the Committee for reviewing violations. The law concluded with issuing its Implementing Regulation, stating the provisions for publication and entry into force.

- To view the details of the document, click here.

Trade Names Law and Implementing Regulation

A royal decree was issued amending the text of Article Twelve of the Trade Names Law issued in 1420 A.H, where the amendment focused on tightening the penalties imposed on the violators of the provisions of the Law by illegally using a trade name. This amendment aims to enhance compliance with the Laws and regulations, protect commercial property rights, and ensure transparency in the practice of commercial activities.

- To view the details of the document, click here.

Franchise Law Franchise Law and Implementing Regulation

The Commercial Franchise Law and its Implementing Regulation were issued, including a set of comprehensive controls aimed at regulating the sector and enhancing confidence therein. These controls included defining terms, determining objectives and scope, controls for registering brokers, and the tasks of the center concerned with commercial franchises. The Law also addressed licensing conditions and brokers’ obligations, regulating temporary suspension of work, and the mechanism of the relationship between the Center and the commercial broker. Furthermore, the Law established the foundations for classification and evaluation, controls for oversight and ensuring quality performance, while identifying violations and grievance mechanisms. The law concluded with provisions that ensure its entry into force to enhance commitment and governance in this vital sector.

- To view the details of the document, click here.

Small and Medium Enterprises Services

Given the pivotal role played by small and medium enterprises in the development of the national economy, "Monsha'at" provides a variety of services designed to support these enterprises and enhance their growth. It aims to create a favorable environment for establishing and developing projects, ensuring the enhancement of their contribution as a fundamental pillar of the national economy. The most prominent of these services are:

Jadeer

A free electronic service that works to qualify and empower small and medium enterprises, by facilitating their access to existing purchasing opportunities with service partners in the public sector and major companies in the private sector.

Training Services

Electronic Training Programs provided by Manshaat Academy through its electronic platform designed specifically to support small and medium enterprises. These programs aim to achieve growth, expansion and sustainability, with a focus on raising the efficiency of entrepreneurs administratively, financially and technically.

Government Cost Calculator Service

An electronic service that helps those who are about to start a business to know the most important government fees required during the establishment and operation period, and also helps the entrepreneur to calculate the break-even point and estimate the feasibility of the project more accurately.

E-Consulting and Guidance Service (Nawafidh)

An electronic application to provide guidance and consultation services by providing specialized consultants and guides with experience in business fields. The application aims to increase the chances of success and stability of establishments and enable them to overcome challenges.

Nawafth Monsha'at Application

An electronic application that provides consultations in several fields such as: finance, technology, innovation, law, marketing and remote sales. It is done by consultants specialized in several fields targeting entrepreneurs and owners of small and medium enterprises via visual, audio and written communication. It aims to achieve stability and growth, overcome the challenges facing enterprises, and reduce the rate of failure and exit from the market.

Establishment Challenges Service

"Establishment Challenges" E-Service aims to support and assist small and medium enterprises in overcoming challenges and finding the best effective solutions, through a specialized team that receives complaints and obstacles, and then sorts, reviews and shares them with relevant government agencies; in order to reach the most appropriate solutions.

Supplier Portal

An e-service provided by the General Authority for Small and Medium Enterprises "Monsha'at", in which you can register as an approved supplier, with the aim of enhancing opportunities for participation in implementing its projects and achieving its goals with high efficiency and quality, building a strong relationship with suppliers and facilitating the communication process in a manner that serves common goals.

Guides and Assistive Tools

An e-service to support entrepreneurs, owners of small and medium enterprises, and those interested in the field of business, by enriching them with the necessary knowledge, by providing them with electronic guides, brochures, forms, tools, and links to governmental and private entities; to introduce the best practices that help them develop and sustain their businesses.

To view more services, click here