RIYADH: The Saudi Cabinet has approved a law allowing the creation of a new type of company in the Kingdom to stimulate entrepreneurship.
The new Companies Act was signed on Tuesday and will regulate all provisions relating to companies, whether commercial, non-profit or professional.
It enables a new form of company – called a 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 the ownership of family businesses, in addition to governance, management, labor policy, employment of family members and cash benefits to ensure sustainability of these businesses.
“The new law will improve financing and business dynamics in all sectors of the economy, it is expected to have a significant positive impact on the economy over the coming decades,” said Razeen Capital CEO Mohammed Al Suwayed. , to Arab News.
“I cannot report a single impact because the impact is going to happen gradually across all sectors,” he said.
It also reduces legal requirements and procedures for small and medium-sized enterprises and simplifies business start-up procedures.
Under this law, many restrictions in the incorporation, exercise and exit phases and restrictions on company names were removed.
According to the Ministry of Investment, the changes will also enhance the diversity and strength of the local market and raise the level of competitiveness of the Saudi investment environment.
“The new business system has come to realize the hopes of family businesses, to organize their business by concluding the family charter, to encourage bold investment and to meet the challenges of entrepreneurs by approving the simplified joint stock company,” said the Minister of Majid Al-Kassabi trade. .
Real estate brokerage law
Another signed law is the Real Estate Brokerage Law, which aims to regulate the activity of brokers and provide innovative and high-quality services to beneficiaries.
“The Saudi Cabinet’s ratification of the Real Estate Brokerage Law will help ensure the reliability of real estate transactions through the General Real Estate Authority,” said Majid Al-Hogail, Minister of Municipal, Rural and Municipal Affairs. Housing on Twitter.
He added that 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 said real estate brokerage services are limited to brokers licensed by the General Real Estate Authority, and that brokerage contracts and real estate transactions must be submitted electronically.
He said the commission and advance payment must be determined and violators will be subject to penalties under the law.
Abdullah Al-Hammad, CEO of the General Real Estate Authority, described the law as a “positive addition”.
“This law complements the legislative system that the General Real Estate Authority is working on to regulate the real estate market in the Kingdom of Saudi Arabia,” he told CNBC.
The new business system will play a pivotal role in supporting and strengthening the regulatory environment for business and economic entities, the chairman of the Capital Market Authority said.
The system aims to facilitate procedures and regulatory requirements to boost the business environment and support investment, Elkuwaiz added.