Saudi Arabia’s new Commercial Transactions Law allows individuals aged 15 and above to engage in trade, provided they obtain authorisation from a guardian, custodian or the court, Commerce Minister Dr Majid Al-Qasabi has said.
Approved by the Cabinet on Tuesday, the law establishes a new regulatory framework for commercial activities in the Kingdom. It will come into force 180 days after its publication in the official gazette.
Al-Qasabi said the legislation regulates key aspects of commercial contracts, including sales, supply agreements, brokerage and commercial agency. It complements the Civil Transactions Law and aims to improve the regulatory environment for commerce and investment.
The Ministry of Commerce said the law comprises 271 articles covering commercial activities, the legal status of merchants, the establishment of commercial businesses, merchants’ obligations, accounting records, contracts and commercial instruments, including bills of exchange, promissory notes and cheques.
The legislation replaces three existing laws: the Commercial Law, the Commercial Papers Law and the Commercial Books Law.
It also revises the definition of a merchant, clarifying which activities acquire commercial status through a single transaction and which require professional expertise to qualify as commercial activities.
The law introduces provisions to promote fair competition and prohibits practices that harm competitors. Parties affected by such conduct may seek court injunctions to prevent further harm and claim compensation.
Certain categories of merchants are exempt from the requirement to maintain accounting records. Other businesses may keep their records electronically or on paper in Arabic, while records in another language are also permitted under the law. These measures are intended to simplify business operations and reduce commercial disputes.
For the first time, provisions governing commercial sales, supply agreements, commercial agency and brokerage have been consolidated into a single legislative framework. The ministry said this would help protect the rights of parties to commercial transactions, safeguard small and medium-sized enterprises (SMEs) and support their growth through commercial contracts and agency arrangements.
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