JEDDAH: Saudi Arabia experienced a 60 percent increase in commercial records in 2024, with a total of 521,969 issued, compared to the previous year, according to the Ministry of Commerce.
The number of commercial records granted in 2023 was 368,038, the ministry said in a statement outlining its achievements for 2024.
Last year, there were 368,038 registrations from establishments and 153,931 from companies, bringing the total number of active commercial records in the Kingdom to 1,606,169.
This comes as Saudi Arabia is driving economic diversification to reduce reliance on oil, aiming to boost the private sector’s share of gross domestic product from 40 percent to 65 percent by 2030.
Central to this transformation is cultivating an economy fueled by entrepreneurship and innovation, with small and medium enterprises expected to increase their contribution from 20 percent to 35 percent by the end of the decade.
The ministry said the 2024 registrations encompassed a wide range of economic activities, with wholesale and retail trade, construction, accommodation, food services, and manufacturing industries, dominating the list.
Over the past three months, the Kingdom’s commercial records have experienced remarkable growth, driven by the implementation of the New Companies Law, which came into effect in early 2023. The rule introduced significant reforms to facilitate business processes and foster a more dynamic corporate environment.
By the end of the third quarter of 2024, commercial records surged to 389,413, up from 230,762 before the law’s enactment, according to the ministry.
Key reforms under the rule include streamlined procedures for establishing joint-stock companies, remote participation for shareholders, and enhanced financing options, such as allowing limited liability companies to issue debt instruments.
The changes have simplified company formation and introduced flexible financing avenues, reshaping the corporate landscape.
The law also promotes broader ownership by easing the purchase of shares and equity stakes. Notable innovations include the introduction of a simplified joint-stock company model and provisions accommodating non-profit organizations. Additionally, reforms enable sole proprietorships to transition into any company type, modernize rules for mergers and transformations, and allow for company splits.
Small and micro enterprises benefit from reduced compliance burdens, as they are exempt from the requirement of an external auditor.
The law also enhances digital services, facilitating remote shareholder meetings and decision-making. Furthermore, it removes restrictions across all stages of company formation, operation, and dissolution.
