The New Trade Names Law in KSA

05.04.25 12:50 AM - By Abdullah Al Anezi

The Ministry of Commerce announced that the new Trade Names Law came into effect on April 3, 2025. This law aims to organize the procedures for reserving and registering trade names in the commercial register, assigning more value and protection to them with their related rights, and contributing to improving confidence within the commercial environment. This article delves into the key provisions and implications of the new Trade Names Law, providing a comprehensive overview of its impact on traders and businesses in Saudi Arabia.

 General Provisions

The law defines some basic terms, where "law" means the Trade Names Law, "regulation" means the executive regulation of the law, "ministry" means the Ministry of Commerce, and "minister" means the Minister of Commerce. A trade name is defined as a name used by a trader in carrying out their commercial activity which distinguishes them from other traders; a trader is defined as a person that has either a natural or legal status that qualifies as a trader pursuant to the commercial law. 

The commercial register is a register containing traders' data through a centralized electronic database, and the registrar is the government body designated by the minister to manage the commercial register (Article 1).

 Trade Names, Reservation, and Registration

Each trader is required by law to choose a trade name and have it registered in the commercial register. The law also permits the trade name to be reserved temporarily with the registrar without being registered in the commercial register, and the regulation determines the period and the conditions for this reservation (Article 3). Trade names can be Arabic names, names in Arabized letters or Arabized numbers, or a combination of them. The trade name may also consist of words, letters, or numbers in any language other than Arabic, or both (Article 4).The registrar shall settle applications for reservation or registration of trade name data prescribed by the regulation. The timeframe for the registrar to respond to a request is 10 days from the date of the request issue, extendable only by the reasons stipulated by the regulation. 

The registrar issues a notice of acceptance of a trade name reservation or registration in the manner determined by the regulation, and the applicant, in accordance with the law, may be liable for the cost of publication. In the case of two or more requests to reserve or register a trade name, the first in time shall have priority. If the request is denied, the reasons for being rejected must be justified, and the applicant must be notified in accordance with the regulations and has the right to appeal to the ministry within 60 days from the date of notification of refusal (Article 5).


Cancellation and Deletion

The registrar will cancel any reservation of a trade name for one of two reasons: (1) if it does not conform to public order or public morals or causes confusion, or if it is disabled according to relevant provisions; or (2) when the reservation is not extended and the reservation period remains valid until the expiration of the reservation period (Article 12). 

As for the cases in which the registration of a trade name is deleted, they are as follows: if the trade name contradicts public order or public morals; it is issued by a final ruling, judgment, or decision to delete the trade name, and the registration must also be deleted in the commercial register (Article 13).

Violations

Whoever violates the provisions of this law by using a reserved or registered trade name or fails to execute any of the provisions shall be punished with a fine not exceeding fifty thousand riyals. The fine may be doubled in case of repeat; repeat means the person committing the same violation, established by a final judgment, within a three-year period starting from the date of such judgment. 

The fine amount depends on the nature, circumstances, and impact of the violation as well as the size of the establishment (Article 14).

Final Provisions 

The law grants the minister the ability to utilize or engage the services of public and private entities to perform registrar functions, and to sub-delegate some of those functions to those entities (Article 19). The law encourages the use of Arabic names for companies through a body of experts in the Arabic language, registering the specialists and allowing the public to review their catalog according to a set of controls (Article 20). The regulation determines the remuneration that the registrar is to receive for the services provided in the implementation of the provisions of the law (Article 21). 

In conclusion, the new Trade Names Law in Saudi Arabia provides a comprehensive framework for the reservation, registration, and protection of trade names. It enhances the commercial environment by ensuring clarity, fairness, and compliance, thereby boosting confidence among traders and businesses. This law is a significant step towards fostering a robust and dynamic commercial sector in Saudi Arabia. 

Contact us
Abdullah Al Anezi

Abdullah Al Anezi

Abdullah Al Shelikhi Alanezi is a Certified Saudi Lawyer and he is the Founder & Managing Partner of ALF LAW FIRM PLLC. He is a seasoned Saudi lawyer specializing in business, foreign investment laws, IP law, etc.

Tags :
Categories :