Saudi Arabia has introduced new Commercial Pledge and Trade Names Systems to modernize its business environment, part of the Vision 2030 initiative. These systems, effective April 3, 2025, aim to simplify commercial operations and boost economic growth.
The Ministry of Commerce highlights that the new systems streamline procedures by introducing a unified commercial register, eliminating branch registers. This change reduces bureaucracy by requiring businesses to update their data annually, without expiration dates for the register.
The Trade Names System offers more flexibility, allowing businesses to register names in both Arabic and English, using letters and numbers. This aims to enhance trade freedom and ease the transfer of trade names.
Non-compliance with the new regulations can result in fines ranging from 500 to 10,000 riyals. These penalties ensure adherence to the new systems, promoting transparency in the market.
The commercial pledge system reduces financial burdens by consolidating registers, making it easier for businesses to comply with regulations. Businesses must also open related bank accounts and issue activity licenses within 90 days.
A five-year grace period is provided for businesses to update existing branch registers, easing the transition to the new framework. These reforms reflect the government’s commitment to a competitive and transparent business environment, aiming to attract investments and expand commercial activities.
Aligning with Vision 2030, these changes aim to diversify the economy beyond oil, fostering entrepreneurship and innovation for sustainable growth.
In conclusion, the new systems are a significant step for Saudi Arabia’s trade sector, simplifying operations and enhancing transparency to foster growth and attract investments.