Saudi Arabia approves new company law to boost entrepreneurship
The Saudi Cabinet has approved a new Companies Law and a new Real Estate Brokerage Law to promote the business system in the Kingdom and boost the growth of its startup ecosystem.
The new law was signed on Tuesday and will regulate all provisions relating to businesses, whether commercial, non-profit or professional. It allows a new form of company called (Simplified Joint Stock Company) that meets the needs of entrepreneurship and venture capital growth.
It also allows for the issuance of a family charter which regulates family business ownership, governance, management, labor policy, employment of family members and cash benefits to ensure the sustainability of these businesses.
Razeen Capital CEO Mohammed Al Suwayed said in a statement: “The new law will improve the dynamics of financing and business across all sectors of the economy; this should have a great positive impact on the economy for the next few decades,”
Added: “I cannot report a single impact, as the impact will occur gradually in all sectors”,
The new law reduces legal requirements and procedures for small and medium-sized enterprises and simplifies the processes of starting a business. Under this law, many restrictions regarding the phases of incorporation, exercise and exit and regulations relating to company names have been removed.
According to the Ministry of Investment, the changes will also improve the diversity and strength of the local market and raise the level of competition in the Saudi investment environment.
Minister of Commerce Majid Al-Kassabi said: “The new corporate regime has come to realize the hopes of family businesses, to organize their business by concluding the family charter, to encourage bold investments and to meet the challenges of entrepreneurs by approving the joint stock company. simplified. “,
Real estate brokerage law
Another law signed on the same day, the law on real estate brokerage, which aims to regulate the activity of brokers and to offer innovative and quality services to beneficiaries.
Majid Al-Hogail, Minister of Municipal, Rural Affairs and Housing, tweeted: “The Saudi Cabinet’s ratification of the Real Estate Brokerage Law will help ensure the reliability of real estate transactions through the General Authority of Housing. ‘immovable “.
Added, “It will also help raise the level of services provided and safeguard the rights of industry customers through standards and procedures for doing business.”
Al-Hogail explained that real estate brokerage services are limited to brokers licensed by the General Real Estate Authority and brokerage contracts.
He said real estate transactions must be submitted electronically, commission and prepayment must be determined and violators will be subject to penalties under the law.
Abdullah Al-Hammad, CEO of the General Authority for Real Estate, thinks the law is a “positive addition”, he said, “This law completes the legislative system on which the General Authority for Real Estate real estate works to regulate the real estate market in the Kingdom of Saudi Arabia”,
Capital Market Authority Chairman Mohammad Elkuwaiz said, “The new corporate system will play a pivotal role in supporting and strengthening the regulatory environment for business and economic entities.”
Elkuwaiz added, “The system aims to facilitate procedures and regulatory requirements to stimulate the business environment and support investment.”