The information contained in this document is marketing material and for informational purposes only. The information contained in this document is presented without any warranty or representation as to its accuracy or completeness and all implied representations or warranties of any kind are hereby disclaimed. Recipients of this document, whether clients or otherwise, should not act or refrain from acting on the basis of any information included in this document without seeking appropriate professional advice. The provision of the information contained in this document does not establish any express or implied duty or obligation between Citco and any recipient and neither Citco nor any of its shareholders, members, directors, principals or personnel shall be responsible or liable for results arising from the use or reliance of the information contained in this document including, without limitation, any loss (whether direct, indirect, in contract, tort or otherwise) arising from any decision made or action taken by any party in reliance upon the information contained in this document. © The Citco Group Limited, December 2024.
New Companies Law in Saudi Arabia
A new Companies’ Law was passed by the Kingdom of Saudi Arabia (“KSA”) on the 28th of June 2022, adopted by Cabinet Decision 678/1443 that came into force in January 2023. The Ministry of Commerce also published the Regulations and subsequent guidance following the entry into force.
In keeping with the government’s goals to diversify the KSA economy and market, promote investment, and strengthen the private sector, the amendments seek to make a number of changes to its predecessors, the Companies’ Law promulgated by KSA Royal Decree No. 1437H (2015) and the Professional Companies Law promulgated by KSA Royal Decree No. 1441H (2019).
The former Laws, along with any other sections that were in contradiction with the New Law, will be supplanted by the New Law, which unifies the legislation into one complete document and controls commercial, nonprofit, and professional enterprises.
Key changes have affected the following topics:
- Company types and names;
- Incorporation procedures, Mergers & Acquisitions;
- Managers’ and Directors’ duties and liabilities;
- Audit requirements for Micro & Small Enterprises;
- Shares;
- Interim Dividends;
- Virtual Communications;
- Annual General Meetings (LLC);
- Automatic Dissolution;
- Specific Regulations for Limited Liability Companies.
According to the Regulations, companies must comply with the new requirements within a two-year window after the entry into force date.
