Saudi Arabia
JordanFrom Assignment to Registration: Your Legal Guide to the New Trade Names Law in Saudi Arabia
A Step-by-Step Breakdown of the Unified Licensing Process and Its Benefits
In a legislative move that reflects the Kingdom of Saudi Arabia’s ongoing efforts to enhance the commercial environment and improve market competitiveness, the new Trade Names Law and its Executive Regulations came into force on Thursday, April 3, 2025, corresponding to 5 Shawwal 1446 AH. This law is part of a broader series of legislative initiatives aimed at reinforcing trust in commercial transactions by regulating the procedures for reserving trade names, facilitating their registration in the Commercial Register, and providing the necessary legal protection, including financial and moral rights associated with trade names.
As a law firm specializing in corporate and commercial legal services, we have received numerous client inquiries regarding the legal procedures for assigning trade names to other traders, as well as the permissibility of incorporating English and numerical characters into trade names.
In this article, we present the most notable legal aspects of the new law and respond to frequently asked questions concerning the assignment of trade names and the regulation of English and numerical content in trade names.
I. Key Legal Updates in the New Trade Names Law
At this stage of legislative development, the new Trade Names Law introduces a number of substantial amendments designed to keep pace with market developments and empower entrepreneurs with more flexibility in selecting and registering trade names. Below are the key legal updates that will have a direct impact on the mechanism for reserving and assigning trade names within the Kingdom:
a) Use of English and Numerical Characters in Trade Names
One of the most significant innovations introduced by the new law is the allowance for trade names to include English language and numerical characters. Previously, trade names were restricted to Arabic only. Under the new Executive Regulations, the trader or investor has expanded options. According to Article 2 of the Executive Regulations:
- A trade name may be reserved or registered in either Arabic or English.
- If an English name is selected, it must be accompanied by its Arabic counterpart.
- Foreign investors may reserve or register trade names in English, provided they are paired with an Arabic version.
- Trade names may include numerical characters, not exceeding nine digits.
b) Assignment and Legal Disposition of Trade Names
The new law allows a trade name to be assigned or otherwise disposed of independently from the establishment itself—a significant development in the protection of commercial rights.
Article 10 of the Law states:
“A trader may legally dispose of a registered trade name independently of the business premises. However, such disposition shall not be effective unless recorded and published in the Commercial Register.”
Article 11 of the Executive Regulations clarifies:
- The disposition applies only to distinctive or family-based trade names.
- Previous rights and obligations associated with the trade name shall not transfer to the new holder unless expressly agreed upon with all creditors.
II. Regulation of Personal and Family Names as Trade Names
Article 3 of the Executive Regulations regulates the registration of personal and family names as trade names, subject to the following conditions:
- A trader’s personal name may be reserved or registered using the full triple or quadruple name as stated in the national ID.
- A family name may be used if it is composed of more than one name, provided the beneficiary bears the same family name in their ID.
- The ownership of a family name may only be transferred to individuals who bear the same name in their national ID.
III. Procedures for Reserving and Assigning Trade Names
Following the adoption of the new law, the procedures for reserving and assigning trade names have become more structured and transparent, supported by electronic services that facilitate and accelerate the process. Below is an overview of the basic requirements and practical steps for reserving or assigning a trade name under the Executive Regulations:
a) Reserving a Trade Name
Article 6 of the Regulations requires the reservation application to include:
- The trade name to be reserved.
- The beneficiary’s details (name, ID number, and contact information).
According to Article 9, once the reservation is approved by the Registrar, it must be published in the Commercial Register and include:
- The trade name.
- The name of the beneficiary.
- The reservation date.
b) Assignment of a Trade Name (for Sole Proprietorships)
The Ministry of Commerce now provides this service electronically through the Saudi Business Center platform, eliminating the need to visit government offices.
Conditions for assignment:
- The applicant and assignee must each be at least 18 years old.
- Neither party may be a government employee.
- The name must not be a personal name.
- The applicant must be the owner of the sole proprietorship or an authorized representative.
- The trade name must be active and registered in the Commercial Register.
- If the trade name is a family name, the assignee must share the same family name.
Service Fee:
- SAR 100 through the Ministry of Commerce’s electronic portal.
Conclusion
The new Trade Names Law represents a qualitative leap in developing the legislative infrastructure for the business sector in Saudi Arabia. It offers more flexibility in selecting and registering trade names and provides clear legal mechanisms for traders to dispose of their trade names independently from the business entity.
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