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New Law of Commercial Registration expected to spur Saudi investment by 8.8%

New Law of Commercial Registration expected to spur Saudi investment by 8.8%

New Law of Commercial Registration expected to spur Saudi investment by 8.8%

Nov 19, 2024

RIYADH — Saudi Arabia's business landscape expects a groundbreaking shift with local investment projected to grow by up to 8.8 percent under the Kingdom's new Law of Commercial Registration, according to a report issued by the Center for Economic Studies at the Federation of Saudi Chambers of Commerce. The report analyzed the law's potential to transform the business climate.

The report paints a vibrant picture of the Saudi private sector's current impact, revealing its SR1.7 trillion contribution to the GDP and a total of 1.5 million active commercial registrations. It also noted significant strides in localization, currently at 28 percent, and the growing role of women in the workforce, where participation rates reached 35.4 percent.

At the heart of this progress lies a series of reforms introduced by the new Law of Commercial Registration. Key changes include the removal of sub-registries for establishments, allowing businesses to operate nationwide with a single record. Entrepreneurs can now own a single establishment capable of handling multiple commercial activities, while the city-specific registration requirement has been abolished, paving the way for businesses to expand freely across the Kingdom.

The report highlights tangible benefits expected from these reforms. 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 percent and 8.8 percent. Furthermore, the number of branches for economic establishments is forecast to increase by 3.8 percent to 5.3 percent, underscoring the reforms' potential to foster expansion and innovation.

The Federation of Saudi Chambers has taken a proactive role in this transformation, conducting in-depth studies to identify investor challenges and collaborating with the National Competitiveness Center (Tayseer) to propose practical solutions