Saudi Arabia's corporate regulatory regime has undergone its most significant overhaul in decades. The reforms, which took effect in 2023 and carry a compliance deadline extending through 2026, touch every aspect of how companies are formed, governed, and dissolved in the Kingdom. International businesses that delay reviewing their structures risk non-compliance penalties and, in the most serious cases, forced dissolution of their Saudi entities.
Saudi Arabia's revised corporate legislation introduces sweeping changes to company registration procedures, articles of association (the founding documents that define a company's purpose and governance), and board of directors composition requirements. All companies incorporated under Saudi corporate law – including those with foreign ownership – must align their constitutional documents and governance arrangements with the new rules. The primary compliance window for existing entities closes in stages, with the final deadline set for late 2026.
This alert explains what changed, which business categories are affected, and the immediate steps international companies must take to remain in good standing.
What changed and when it took effect
Saudi Arabia enacted a comprehensive revision of its corporate legislation through the Nizam al-Sharikaat (Companies Law) reform process. The revised law came into force in late 2022 and became fully operational in 2023. Implementing regulations have been issued progressively since then.
The principal changes affect four areas. First, the rules governing company registration have been modernised. Procedures are now largely digital, processed through the Ministry of Commerce's electronic platforms. Paper-based filings carry a higher risk of rejection under the new system. Second, the requirements for articles of association have been substantially updated. Existing articles that were valid under the prior law may no longer satisfy the new mandatory clauses. Third, rules on board of directors structure have been tightened. Listed companies must meet enhanced independence and disclosure standards. Privately held companies face revised quorum and voting requirements. Fourth, shareholder resolution procedures have been codified more precisely. Certain resolutions now require specific majority thresholds that differ from those previously accepted by practice.
A transitional period was granted to existing companies. That period is not indefinite. The Ministry of Commerce has signalled active enforcement beginning in the second half of 2026.
Who is affected and threshold criteria
The reforms apply broadly. Any entity incorporated in Saudi Arabia – whether a limited liability company, joint stock company, or branch of a foreign entity – falls within scope. Foreign-owned companies operating through a registered office or licensed branch are equally affected.
The following categories face the most immediate exposure:
- Existing limited liability companies whose articles of association predate the 2022 reform and have not been updated
- Joint stock companies that have not yet reconstituted their board of directors in line with the new independence and disclosure requirements
- Foreign companies holding Saudi licences through regional headquarters arrangements under Vision 2030 incentive programmes
- Entities that have undergone ownership changes or capital restructuring since 2022 without updating their constitutional documents accordingly
Companies with no Saudi operations but that hold passive investments through Saudi-registered vehicles also fall within the compliance perimeter. The law does not distinguish between active and dormant entities for the purposes of the update obligation.
For a tailored assessment of how these reforms affect your Saudi corporate structure, contact us at info@ferrazwhitmore.com.
Immediate actions required
International companies should treat the following as a priority checklist. Each item carries a direct compliance consequence if left unaddressed before the enforcement window opens.
Review and update articles of association. Commission a gap analysis of your current articles against the mandatory clauses under the revised corporate legislation. Where gaps exist, prepare amended articles and file them through the Ministry of Commerce's electronic portal. Failure to update articles is one of the most frequently cited grounds for regulatory notices under the new enforcement regime.
Audit board composition and governance documents. Confirm that your board of directors meets the size, independence, and disclosure requirements applicable to your company type. For joint stock companies, this includes assessing whether any current directors fall into newly defined conflict-of-interest categories. Board minutes and internal regulations may also need updating to reflect new quorum rules.
Verify shareholder resolution records. Any shareholder resolution passed between 2022 and today should be reviewed for compliance with the revised majority and procedural thresholds. Resolutions that do not meet the new standards may be challengeable. This is a non-obvious risk that many international holding structures have overlooked.
Confirm registered office status. The reform introduced updated requirements for the registered office of Saudi entities. Verify that your registered office address is current, correctly recorded with the Ministry of Commerce, and that any changes in premises have been formally notified.
Assess M&A and investment structures for knock-on effects. Cross-border transactions involving Saudi entities. whether acquisitions. Joint ventures. Alternatively, capital injections. now require prior confirmation that the target or counterparty is compliant with the updated corporate legislation. Non-compliant entities can create title risk in a transaction. For further guidance on deal structures in the Kingdom, see our coverage of mergers and acquisitions in Saudi Arabia.
Companies that have recently obtained or are applying for licences under Saudi Arabia's regional headquarters programme face an additional layer of scrutiny. That programme's conditions reference compliance with the revised corporate legislation as an ongoing requirement. A lapse in corporate compliance can trigger a licence review.
For clients with parallel Gulf structures, the reform cycle in Saudi Arabia shares certain features with recent changes in neighbouring jurisdictions. Our alert on corporate law reforms in the UAE addresses comparable compliance considerations for entities operating across both markets.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our corporate law practice covers Saudi Arabia and the broader Gulf region, supporting international companies through company registration, governance restructuring, and compliance with Saudi corporate legislation. As an international law firm with deep experience across civil law and common law systems, we work with multinationals. Regional investors. Additionally, in-house legal teams who need a lawyer in Saudi Arabia or across the GCC with cross-border capability. The firm's Middle East practice is supported by practitioners with experience before Saudi regulatory authorities and in cross-border transaction contexts spanning the region. To discuss how the 2025 corporate reforms affect your Saudi structure, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.