Saudi Arabia has cleared the way for citizens as young as 15 to do business under a sweeping new commercial transactions law, a move aimed at bringing more young entrepreneurs into the economy while strengthening the Kingdom's business regulations.
The Cabinet, chaired by Crown Prince and Prime Minister Mohammed bin Salman bin Abdulaziz, approved the law on Tuesday, drawing praise from experts who said it would strengthen investor confidence, clarify commercial rules and create a more predictable business environment.
Commerce Minister Majid Al-Qasabi said the law regulates commercial sales, supply contracts, brokerage and commercial agency agreements, while allowing citizens aged 15 and older to engage in business under specific conditions.
The legislation also complements the Civil Transactions Law as part of efforts to stimulate commerce and investment, he said.
The Ministry of Commerce said the 271-article law covers commercial activities, merchants, business establishments, traders' obligations, accounting records, contracts and negotiable instruments, including bills of exchange, promissory notes and checks.
It replaces three existing laws: the Commercial Law, the Negotiable Instruments Law and the Commercial Books Law.
Curbing commercial disputes
The law seeks to promote fair competition and curb practices that harm competitors, giving affected businesses the right to seek court orders to stop harmful conduct and claim compensation.
It also exempts certain categories of merchants from maintaining accounting records and allows records to be stored electronically or on paper in Arabic, with the option of using another language.
By clarifying commercial rights and obligations, the legislation aims to make business outcomes more predictable and reduce disputes.
For the first time, rules governing commercial sales, supply contracts, commercial agencies and brokerage agreements are brought together in a single legislative framework, with provisions designed to protect the rights of all parties.
Boost for smaller businesses
Set to take effect 180 days after publication in the Official Gazette, the law aims to give small and medium-sized enterprises (SMEs) greater legal protection and help them expand through commercial contracts and agency arrangements.
It also seeks to boost business confidence, support SME growth and competitiveness, and make commercial operations more efficient by consolidating rules previously spread across separate laws.
Modernizing business rules
Osama bin Ghanem Al-Obaidi, a legal consultant and professor of commercial law, told Asharq Al-Awsat that the Cabinet's decision marked a significant step in modernizing Saudi Arabia's economic legislation.
The law goes beyond regulating contracts and transactions, he said, reflecting a push for a clearer, more flexible business environment suited to a modern economy and the needs of investors and entrepreneurs.
Al-Obaidi singled out the decision to allow citizens aged 15 and older to engage in business under specific conditions.
The change, he said, could help young Saudis gain practical experience earlier and turn their ideas and skills into viable businesses.
He said the law would also encourage investment by bringing commercial rules into one accessible legal reference, making them easier to understand and apply.
Attracting domestic and foreign investment
Al-Obaidi said the law clarifies commercial contracts, unifies commercial registration rules and regulates negotiable instruments and electronic documents, giving the latter the same evidentiary standing as original paper documents.
"There is no doubt that the law will strengthen the investment environment and the competitiveness of the Saudi economy," he said.
"It will also attract foreign and domestic investment by providing a legal framework aligned with international best practices and reducing commercial risks through clear rules, rights and obligations for all parties."
He said the legislation would close legal gaps and complement the Civil Transactions Law, helping build a more stable commercial regulatory environment.
Building a more stable market
Economic and investment specialist Tahani bint Abdullah AlKhayyal told Asharq Al-Awsat that clearer rules governing commercial contracts and transactions would help businesses understand their rights and obligations, avoid disputes and better anticipate legal outcomes.
Such clarity, she said, is essential to building a more efficient and investment-friendly market.
A predictable legal framework would also help domestic and international investors assess opportunities and risks with greater confidence while supporting more stable, sustainable business relationships.
AlKhayyal stressed the importance of the law for SMEs, which play a key role in diversifying the economy, creating jobs and driving innovation.
Clearer rules, she said, would help smaller businesses organize their operations, protect their rights and compete more effectively.
"This becomes even more important when legislation is integrated with digital services and legal awareness initiatives, making it easier for business owners to understand and comply with requirements while reducing procedural burdens," she said.
AlKhayyal said the law's real test would be its impact on the market: whether it makes doing business easier, strengthens legal protections and encourages new ventures.
Modern legislation, she added, should empower individuals and businesses by opening up economic opportunities.
She said the law would strengthen Saudi Arabia's commercial framework and support Vision 2030 goals to broaden economic participation and reinforce the private sector's role as a key driver of growth and development.
