Commercial Register Law: duty to register (official Arabic text)
- Published by:
- Ministry of Commerce
Business and Corporate
Legal Services for Businesses in Dammam Business Legal Services
In their day-to-day work, businesses face recurring regulatory matters, from licenses and registrations to contracts, and we provide legal support on them.
Situations where this may apply
- Your business faces a regulatory matter in its day-to-day operations, such as a license, a registration or a contract.
- You need legal input on a recurring operational or commercial matter.
Legal framework
Businesses operating in Saudi Arabia are subject to a number of ongoing regulatory requirements, including the following:
- Every merchant must be registered in the Commercial Register, which the Ministry of Commerce establishes, and the Ministry may exempt certain categories of merchants under criteria set in the implementing regulations. Article 5
- In addition to the Commercial Register, certain activities also require a municipal commercial license through the Balady platform before the activity is carried out at its designated location. Ministry of Municipalities and Housing: issuing a commercial license via Balady
- VAT registration is mandatory where the value of taxable supplies exceeds SAR 375,000 over twelve months, or is expected to exceed it over the next twelve months, and voluntary registration is available where taxable supplies or taxable expenses exceed SAR 187,500. ZATCA: VAT registration thresholds
- A merchant must obtain the license for an activity recorded in the Commercial Register, where that activity requires one, within ninety days of recording the activity, failing which the registrar strikes the activity off unless it extends the period. Article 4
Common types of matters
- Confirming that a business meets the Commercial Register and municipal licensing requirements for its current activity, or for a new activity it plans to carry out.
- Assessing whether the value of a business's taxable supplies has reached the threshold that requires VAT registration.
- Drafting or reviewing contracts with suppliers, customers, or distributors before they are signed.
- Recurring questions connected to running the business that do not fall specifically under company law.
How a matter may proceed
- The matter usually starts by pinning down exactly which regulatory requirement applies, whether it concerns the Commercial Register, a municipal license, or a tax obligation.
- The business's current position, its registrations, licenses, and existing contracts, is reviewed to check whether that requirement is already met.
- Where a gap exists, it is addressed with the appropriate regulatory step, such as completing a registration, amending a contract, or updating a license.
Key considerations
- Municipal licensing requirements vary by activity type and location, so what one activity needs is not necessarily what another needs.
- VAT registration thresholds are calculated on the value of taxable supplies specifically, so pinning down the right figure requires reviewing the nature of the business's revenue.
- Contracts with suppliers or distributors can carry ongoing obligations well beyond the moment of signing, so reviewing them before committing is usually more useful than reviewing them after a disagreement arises.
Documents typically needed
- The business's current Commercial Register certificate.
- Its existing municipal license, if one exists.
- Taxable supply figures, where the question concerns VAT registration.
- A copy of the contract or agreement that needs review.
Frequently asked questions
Under the Commercial Register Law, every merchant, meaning anyone who qualifies as a merchant under commercial law, must be registered in the Commercial Register, and the Ministry of Commerce may exempt certain categories of merchants under criteria in the implementing regulations, in addition to whatever activity license or municipal license the activity and its location may require.
According to the Zakat, Tax and Customs Authority, registration is mandatory where the value of taxable supplies exceeds SAR 375,000 over twelve months, or is expected to exceed it over the next twelve months, and voluntary where taxable supplies or taxable expenses exceed SAR 187,500.
This service covers the ongoing legal matters a business faces in the course of its operations, such as contracts, licensing, and regulatory obligations, while the Corporate and Companies Law service covers advice on company law, related statutory obligations, and the legal implications of company decisions and transactions.
It may, depending on the type of activity and its location. Certain activities require, in addition to the Commercial Register, a municipal commercial license through the Balady platform before the activity is carried out at its designated location, and what one activity needs is not necessarily what another needs.
The period is ninety days from recording the activity, where the activity recorded in the Commercial Register requires a license. If the merchant does not obtain the license within that period, the registrar strikes the activity off unless it extends the period.
Reviewing them before committing is usually more useful than reviewing them after a disagreement arises. These contracts can carry ongoing obligations well beyond the moment of signing, and drafting or reviewing contracts with suppliers, customers, or distributors before they are signed is a common matter in this service.
They typically include the business's current Commercial Register certificate, its existing municipal license if one exists, and a copy of the contract or agreement that needs review. Where the question concerns VAT registration, taxable supply figures are also needed.
Official references
The legal texts and official publications this content relies on.
Article 5
Ministry of Municipalities and Housing: issuing a commercial license via Balady
- Published by:
- Ministry of Municipalities and Housing
ZATCA: VAT registration thresholds
- Published by:
- Zakat, Tax and Customs Authority
Ministry of Commerce: Commercial Registration service
- Published by:
- Ministry of Commerce
Commercial Register Law Implementing Regulations: licence for a recorded activity within ninety days (official Arabic text)
- Published by:
- Ministry of Commerce
This is general information based on the cited laws when this page was prepared. It may change, and it is not legal advice on a specific case.