setting up corporates (6): The legal regulation of online stores!

In the recent past, technological development, digital transformation, and electronic transactions were seen as the tools of the future in the world of business and finance, and many did not expect that this future might become present in a few years, and that “e-commerce” would become one of the most important and best ways to invest and make profits.

With the spread of e-commerce transactions and the increase in their size and the launch of many different e-shops, in addition to the increasing trend of shoppers towards getting all their needs of services or products electronically, especially with the crisis of the pandemic of Corona  (Covid-19), the need for the legal regulation of transactions that is carried out has emerged In these ways, especially with the presence of real risks related to protecting the security of the consumer and securing his money from being tampered with.

Therefore, it was necessary for governments to be interested in regulating the e-commerce process legally so that the consumer feels a real similarity between e-Shops and traditional shops, especially with regard to protecting his rights as a consumer and his personal data as a user of e-shops platforms.

What are e-Shops?!

The e-Shop is an electronic platform that allows the service provider to offer or sell a product, provide a service, advertise it or exchange its data.

So simply! The definition of the electronic store came from the Saudi e-commerce system, which also defines e-commerce activity as “an activity of an economic nature undertaken by the service provider and the consumer – in whole or in part – by electronic means, in order to sell products, provide services, advertise them, or exchange their data”.

According to these two previous concepts, the concept of the e-Shop becomes clear, as it expresses a virtual store created by an electronic means that can be accessed using the Internet to purchase, review or advertise a service or product whether it is active only online (Pure Play) – such as Amazon and eBay – or Had a store or a physical or traditional site that can be visited in person (Click and Mortar) – such as the Best Buy site or the Target site – it is considered an exact copy of the retail store located in the shops and markets, but in a modern and advanced form to sell products or services to consumers.

How to set up an online store in Saudi Arabia?!

Other than site or application programming, design, hosting and domain reservation, electronic payment gateway provision, and other technical matters, some legal procedures must be taken to license the online store to carry out its activities legally.

Despite the different regulations and legislation adopted by countries around the world, there are general rules and basic requirements that are almost agreed upon by most of the legal systems and legislations in different countries, because the online store is not often limited to providing its services and products on a specific spatial scale.

The Kingdom of Saudi Arabia has been interested in developing a package of regulations and legislation to regulate e-commerce operations and establish online stores, the most important of which is the e-commerce system and its executive regulations, the personal data protection system, in addition to developing a set of guides and instructions for e-commerce service providers and consumers, such as cybersecurity guidelines for e-commerce’s service providers, cybersecurity guidelines for e-commerce’s consumers, the guideline for online stores, self-assessment checklist for online stores compliance, information security regulatory guide, principles of bank customer protection.

In order to establish the online store, the company or person wishing to engage in this activity must follow the procedures and rules stipulated in those laws, regulations, and guidelines in order to be able to practice its activity officially. Among the most important of these measures are the following:

  • Obtaining a commercial register from the Ministry of Commerce and Investment or a freelance document from the Ministry of Human Resources and Social Development to practice e-commerce activity.
  • Having a commercial bank account in the name of your store in a Saudi bank.
  • Providing a secure and reliable electronic payment method through approved banking channels.
  • Registration on one of the e-stores authentication platforms and obtaining the license.

Other terms!

After establishing the online store from the technical and legal aspects, the person who initiates the e-commerce activity through the online store shall abide by some obligations aimed at regulating the relationship between him and the consumer, protecting the consumer from deception and manipulation and providing a safe digital experience for consumption through the online store, and among the most important of these requirements the following:

  •  Contracting with a shipping company to deliver orders to customers quickly.
  •   Support the online store of the Arabic language.
  •  Provide the necessary basic data such as phone number, e-mail, address, instant chat with customers, and finally the various electronic payment methods.
  • Clarify the terms of the contract with the consumer, the policies for delivering the product or providing the service, shipping costs, and the steps to complete the purchase process.
  •  Clarify an explicit policy for replacement and return for the buyer to see before completing the purchase process.

Online Store Documentation!

Building trust between the merchant and the shopper is one of the most important challenges facing e-commerce, and one of the most important services provided by the Saudi government to provide a sense of safety for shoppers while using online stores to search for their needs is the online store documentation service through the “Maarof” platform.

Where the Saudi Ministry of Commerce and Investment, in cooperation with “Thiqa” Business Services Company, launched the “Maarof” service as a third party whose mission is to verify all merchants who launch online stores, document those stores, and ensure the quality of the products offered by them, in order to provide a sense of credibility and safety within the hearts of shoppers towards the online store. On the one hand, and to give online store owners an opportunity to effectively market their stores on the other.

  • Thus, the “Maarof” service aims to build trust between the merchant and the shopper during the online shopping journey in many online stores, and this is done through three basic stages, namely:
  •  The owner of the online store registers and documents his store and social media pages on the “Maarof” platform.
  •  After that, the shopper can search within “Maarof” for trusted online stores according to the product or service he desires.
  •  The shopper evaluates the online store that he dealt with after testing and completing the order and purchase, and this evaluation appears in the profile of the online store on the “Maarof” website.
  • In order to register on the “Maarof” platform, no specific conditions are required, and registration on “Maarof” is free. However, the online store must adhere to the following:
  •    The name of the online store should be in Arabic and appropriate and does not violate the Sharia or the public interest.

The name of the online store should not be similar or identical to an existing or reserved name.


You can undoubtedly establish your online store by yourself, but in order to make sure that your store is compatible with Saudi laws and does not violate any requirements required by the laws, you must resort to those who have experience in setting up corporates, whether traditional or electronic, and with ALF Law Firm we can provide you the service of setting up your online store in the fastest time, at the lowest cost, and in compliance with all laws and regulations.