Effective 2 April 2025, the updated KSA Commercial Register Law brings with it a crucial new compliance obligation for companies: the annual update of Commercial Registrations (CR). This change, overseen by the Ministry of Commerce, provides important implications for maintaining business operations without disruption.
What’s New in the CR System?
The Ministry of Commerce has eliminated the expiration date and fixed validity period traditionally found in CRs. Instead, the system now highlights the original date of issuance, a move that aligns with the new annual update requirement. Businesses are now expected to confirm and update their CR every year based on this issuance date.
How and When to Update
Companies can begin the update process 30 days before the anniversary of the CR’s original issuance. For example, if a company’s CR was issued on 30 June 2024, it can initiate the update from 1 June 2025 via the Saudi Business Center portal.
However, there is a 90-day grace period from the due date. If this period lapses without compliance, the CR will be suspended for a year. Restoration will require payment of both the annual fee and a penalty.
Non-Compliance Risks
Neglecting this annual requirement can have serious consequences:
- CR suspension penalties in the KSA can lead to a halt in business operations.
- Frozen bank accounts, blocked access to government services, and ineligibility for public and private contracts.
- If left unresolved for over a year, the CR may be cancelled, and companies could face fines of up to SAR 50,000.
Steps for Compliance
- Confirm the original issuance date of your CR via the Ministry of Commerce or Saudi Business Center portals.
- Update your CR annually, starting from 30 days before the due date and no later than 90 days after.
- Ignore the expiration date on your current CR, as it is no longer valid under the new system.
With these updates in place, businesses must act proactively to avoid penalties and ensure uninterrupted operations.
FAQs
What are the new requirements under the updated KSA Commercial Register Law effective April 2025?
Under the updated Commercial Register Law, effective 2 April 2025, all companies in Saudi Arabia are required to update their Commercial Registration (CR) annually. The update must be made based on the original date of issuance of the CR, not a previously printed expiration date. This annual confirmation ensures that company information remains current in the Ministry of Commerce’s records.
How can companies in Saudi Arabia update their Commercial Registration (CR) under the new law?
Companies can update their CR by submitting the annual confirmation via the Saudi Business Center portal. The system allows updates to be initiated up to 30 days before the anniversary of the CR’s original issuance date. For example, if the CR was first issued on 30 June 2024, the update can be submitted starting from 1 June 2025.
What are the penalties for failing to update a Commercial Registration in Saudi Arabia?
If a company fails to update its CR within 90 days from the due date (the anniversary of issuance), the CR will be suspended for one year. During suspension, the company must pay the annual renewal fee and a penalty to reinstate the CR. If the CR remains suspended for more than one year without correction, it may be cancelled, and the company could face fines of up to SAR 50,000.
When should Saudi companies start the annual CR update process to stay compliant?
Companies should begin the CR update process 30 days before the anniversary of their CR’s original issuance date. It’s critical to complete the update no later than 90 days after that date to avoid penalties or suspension.
How does the removal of expiration dates affect Commercial Registrations in KSA?
The Ministry of Commerce has removed the traditional expiration date and fixed validity period from the CR. Instead, the system now highlights the original issuance date as the sole reference point for annual updates. This change shifts the compliance model from a renewal-by-expiry approach to an anniversary-based confirmation system.
What legal risks do businesses face if their CR is suspended or cancelled in Saudi Arabia?
A suspended or cancelled CR can severely impact a company’s operations. Legal and operational risks include:
- Suspension of government services
- Freezing of bank accounts
- Inability to bid for public or private sector projects
- Fines up to SAR 50,000
- Eventual cancellation of the CR, resulting in the potential dissolution of the company
Maintaining an active CR is essential to preserving legal standing and operational continuity in Saudi Arabia.