A few months ago, the Saudi Arabia government announced the new Companies Law, which would replace the previous one. And in the cabinet meeting under the N’ 678/2022, the authorities approved this new resolution on June 28th, 2022. However, the new KSA Company Law would come into force 6 months later, which would be in 2023.
In this article, you will learn everything you need to know about the new business law in Saudi Arabia. So, if you own a company in KSA, knowing about the recent changes to this law will be essential. And we will briefly explain how this law will affect the way companies work in this country in 2023. Let us observe:
1. What is the official announcement regarding Saudi Corporate Law?
The authorities approved the resolution to enact the new Saudi Corporate Law in the cabinet meeting under the N’ 678/2022. This announcement about the new law occurred on June 28th, 2022, but it will come into effect 6 months later. And the aim of this law is to replace the previous Companies Law that the government implemented in 2015.
The main goal of the Company Law in Saudi Arabia is to promote the country’s Vision 2030. And the government designed this project to further advance and develop the economic system of KSA. Besides, it will also facilitate the work of companies and allow them to maintain their expansion and growth momentum.
And to ensure that companies overcome all the challenges they face, the new law is in line with international standards. Plus, both the public and the private sectors have contributed to the draft law, making it more beneficial for companies. And several professional associations, international organizations, and specialized experts have also given their opinion about the new law.
On the other hand, the new Company Law in Saudi Arabia will regulate all provisions related to companies. And, regardless of whether these companies are commercial, non-profit, or professional, it will ensure that one legal document regulates all regulations. Plus, the law also contains provisions for a new form of company; the Simplified Joint Stock Company.
The new form of company known as Simplified Joint Stock Company will also have provisions in the new law. And, as you may know, this new company form is an outgrowth of entrepreneurship needs and venture capital growth. Furthermore, it aims to serve investments by non-profit organizations. So, it will enable them to move up into the third sector and generate returns, which will be used for charitable purposes.
2. How will this new law affect businesses in Saudi Arabia?
The aim of the Company Law in Saudi Arabia is to improve the sustainability of businesses. In addition, by easing procedures and regulatory requirements, it also aims to support investment in small and medium-sized enterprises.
Plus, the new law seeks to increase diversity in the market through the addition of new business entities. And besides, it will also increase the flexibility of systems, safeguard customers’ rights, and reduce disputes.
On the other hand, the law will simplify procedures and requirements related to the incorporation process. Therefore, it will be a relief for small, medium, and micro companies. And now, companies’ incorporation agreements and AOA will include special clauses. Plus, some possible mechanisms will open up for entrepreneurs, venture capital owners, and private ownership.
3. Learn more about the new KSA Company Law with Us.
Being up-to-date with the latest news regarding modifications to the legal framework is essential for business owners like you. Therefore, counting on a specialized agency such as Company Formation Saudi will allow you to be aware of the latest announcements. Besides, we have a whole team of specialists who will provide you with consultancy and legal services to help you.
Stay up-to-date and compliant with laws in Saudi Arabian with Company Formation Saudi! If you contact our specialists, you will get more information about the latest news in KSA related to business laws. You can email us at firstname.lastname@example.org one of our representatives will give you further details about our services.