Saudi Arabia’s business landscape is experiencing an unprecedented boom, with commercial company registrations soaring by 68% in just 20 months. The surge follows the implementation of a groundbreaking new Companies Law in January 2023, which has drastically streamlined business operations and fueled economic growth.
By the end of Q3 2024, the number of registered companies had surged to 389,413, up from 230,762 before the law’s enactment. This sharp rise highlights the effectiveness of the law’s pro-business provisions.
Key reforms introduced by the new law have reshaped the way businesses operate in the kingdom. Among the most impactful changes are simplified procedures for setting up a wide variety of company types, including joint-stock companies. It also eases company ownership, allowing greater flexibility in purchasing shares and facilitating the transformation of sole proprietorships into incorporated entities.
Moreover, the law includes innovations such as allowing businesses to merge, divide into multiple entities, and even operate without the need for an auditor if they are small or micro-sized. Electronic services have also been expanded, offering virtual access to company meetings and remote voting.
The introduction of the simplified joint-stock company format has been a major step forward, catering specifically to the needs of entrepreneurs. Companies are now able to issue debt instruments and offer more diverse financing options. Additionally, the law offers foreign companies smoother entry into the market and further incentives to stimulate investment.
In sum, Saudi Arabia’s new Companies Law is proving to be a catalyst for growth, empowering businesses of all sizes to thrive and attracting a wave of new investments to the region.
