New commercial registry, trade name systems take effect today

The Ministry of Commerce announced the implementation of the Commercial Registry and Trade Name Systems, along with their executive regulations, effective today April 3, 2025.

The ministry also confirmed the resumption of business-related services under the two systems after their enhancement to align with the legislative framework.

In its statement, the ministry explained that the Commercial Registry system facilitates business operations by regulating registration procedures, ensuring the accuracy and transparency of registered data, and enabling periodic updates. It also allows public access to business information, making searches more efficient.

The system introduces a single commercial registry for each establishment across the Kingdom, consolidating all business activities. This eliminates the need for separate branch registrations for sole proprietorships and companies, thereby reducing financial burdens on businesses.

Additionally, the system introduces an annual electronic confirmation requirement for commercial registry data, replacing the previous practice of registry renewal. Merchants must confirm their registry information every 12 months from the issuance date.

The commercial registry and its associated services will be suspended if the annual confirmation is not submitted within 90 days of its due date. If the merchant does not request reinstatement, submit the confirmation, and pay the required fees along with the applicable penalty within one year from the suspension date, the registry will be automatically canceled.

Furthermore, the system mandates business-linked bank accounts to enhance reliability. Merchants must also obtain the required licenses for their registered business activities within 90 days, unless a longer period is specified by the licensing authority.

A five-year grace period has been granted for businesses to adjust their existing branch registrations. Additionally, it introduced an alternative penalty framework, which includes issuing a warning to the merchant, requiring necessary steps to prevent future violations, mandating corrective actions to address the violation's impact, or issuing a decision to amend the registered data in the commercial registry.

The Trade Name System aims to strengthen confidence in the commercial environment by regulating the reservation and registration of trade names, protecting their rights, and enhancing their value.

Under the new regulations, businesses can reserve a trade name for a limited period, renewable once, under specific conditions. The system outlines prohibited trade names and expands registration options by allowing names in Arabic, transliterated Arabic, English, or alphanumeric formats.

Furthermore, businesses can now transfer trade names independent of the company itself. The system prohibits the registration of identical or similar names for different businesses, even if they operate in different industries, to safeguard brand identity and enhance transparency and competitiveness in the business environment.

The executive regulations also establish guidelines for registering family names, personal trader names, the name "Saudi Arabia," as well as city, region, and public place names as trade names.

The Ministry of Commerce emphasized that these reforms align with Saudi Arabia’s Vision 2030 and its goal of enhancing the business environment, embracing technological advancements, and supporting economic transformation.