Commercial registration transfers prohibited for 6 months: New regulations in Saudi Arabia

The Saudi Business Center has approved new regulatory procedures aimed at controlling the business market in the Kingdom of Saudi Arabia. Informed sources told Okaz that directives have been issued to prevent individuals who own sole proprietorships and companies related to the same owner from carrying out “issuance, transfer of ownership, or entry as a partner” operations in new commercial registers except after a period of time of no less than 6 months since the date of the last acquisition of a commercial register.

Details of the decision and the implementation mechanism

Sources explained that the center's electronic system now displays a warning message to users attempting to conduct a new transaction during the lockdown period. The message reads: "The new owner cannot acquire a sole proprietorship until six months have passed since the date of the last ownership transfer." This decision applies to sole proprietorships and companies owned by the same person, and the measure aims to curb the rapid circulation of commercial registrations, which could be exploited for illicit activities.

The center explained that if the ownership of a commercial registration is transferred from one person to another, the same registration is subject to a period of prohibition, and it is not permissible to transfer its ownership again to a third party except after the specified period (6 months) has passed, which ensures the stability of ownership and limits fictitious trading in registrations.

Economic context and organizational objectives

This step comes within the framework of the Kingdom's ongoing efforts, under Vision 2030, to combat commercial concealment and eliminate the "shadow economy." The phenomenon of the rapid sale of commercial registrations is one of the loopholes that illegal workers or those operating under the table might exploit to temporarily legitimize their businesses. By imposing a six-month "freeze" period, regulatory authorities ensure that the owner is indeed the actual operator of the business, thus enhancing the credibility of the investment environment.

Economists expect this decision to contribute to:

• Purifying the market from fictitious and paper-based establishments.
• Protecting genuine entrepreneurs from unfair competition.
• Improving the quality of business data and the accuracy of economic statistics.

Business sector growth in numbers

In a related development, the latest projected statistics up to the end of 2025 indicate a surge in the number of commercial establishments in the Kingdom, reaching a total of approximately 1,765,667 . These establishments are distributed across various sizes, reflecting the dynamism of the Saudi economy. Micro-enterprises numbered around 166,624, while large establishments reached approximately 21,961. Medium and small enterprises held varying shares, with medium-sized enterprises registering a substantial 1,572,780, according to the available data.

Government support initiatives: “Recovery”

Alongside regulatory measures, the government continues to support the private sector. Last year saw the launch of the second phase of the “Refund” initiative, with a budget of SAR 1.5 billion . This initiative aims to reimburse fees for 10 selected government services, thereby supporting micro, small, and medium enterprises (MSMEs) and easing their financial burdens to enhance their growth and sustainability in the market. This underscores the government's commitment to balancing regulatory oversight with financial empowerment.