Saudi Arabia’s cabinet approved a new Commercial Transactions Law on Tuesday, October 27, replacing three older laws with a single framework of 271 articles that governs commercial activity, merchants, contracts and commercial papers.
The law was approved at the weekly cabinet session in Riyadh chaired by Crown Prince and Prime Minister Mohammed bin Salman. It takes effect 180 days after its publication in the Official Gazette, according to the Ministry of Commerce.
The legislation replaces the Commercial Law, the Commercial Papers Law and the Commercial Books Law, the ministry said. It covers bills of exchange, promissory notes and checks, as well as merchants’ obligations and accounting records.
For the first time, the rules for commercial sales, supply sales, commercial agency and brokerage are set out in a single legislative document, the ministry said.
The law allows a minor who has reached 15 years of age to engage in trade with the permission of a guardian, a custodian or a court. It also redefines who counts as a merchant and which activities are commercial.
Some categories of merchants are exempt from keeping accounting records under the law. Records may be kept electronically or on paper in Arabic, with an option to keep them in another language.
The law prohibits merchants from harming competitors and sets out the right of an affected party to go to court to stop the harm and seek compensation.
Minister of Commerce Majid Al Qasabi said the law complements the kingdom’s Civil Transactions Law and is intended to support the business and investment environment, Maaal reported.
At the same session, the cabinet said the share of localized military spending in Saudi Arabia reached 27.3% at the end of 2025, above the annual target of 24%. The kingdom aims to localize more than 50% of military spending by 2030.
The cabinet also approved the reconstitution of the board of the National Water Company under the chairmanship of Abdulrahman Al Fadhli, and approved the final accounts of the Saudi Export-Import Bank and the Social Development Bank for two previous fiscal years.
