190309 saudi arabia
The King Abdullah Financial District, north of Riyadh, Saudi Arabia. Image Credit: Reuters

Dubai: The Saudi Ministry of Commerce has announced that foreign investors can become members of the board of directors of the chambers for the first time in the history of Saudi chambers.

The ministry said the decision is based on the new Chambers of Commerce Law, approved by the Council of Ministers on Tuesday,

The new law also gives exemption to new companies and establishments, which are joining the chamber, from the subscription fee for a period of three years since the date of their commercial registration.

As per the new law, the Council of Saudi Chambers will be renamed the Federation of Saudi Chambers. There are also provisions in the law to further ease the procedures for the start and practice of business activities in the kingdom.

The ministry stated that the law abolished the Saudi nationality requirement for the membership in the board of directors of the chamber. The move enables foreign investors to become members of boards of directors of the chambers of commerce for the first time with a condition that the membership to the board is renewed for two consecutive terms only.

Private sector

According to the new law, it is possible to establish more than one chamber of commerce in the same region, or offices or branches in the governorates and towns in their jurisdiction. The law unifies efforts to serve the private sector through the establishment and restructuring of chambers of commerce according to the administrative regions.

The law facilitates the start and practice of business activities by exempting new subscribers of companies and establishments from subscription fees for a period of three years from the date of their commercial registration and it allows anyone who practices a licensed commercial activity to be registered in the chamber of commerce.

Unlike the previous law, the new law does not require multiple subscriptions with the increase in the number of branches of business firms. In the previous law subscription fees were multiplied by the number of branches and registered establishments.

The new law stipulated changing the name of the Council of Saudi Chambers to the Federation of Saudi Chambers and restructuring of the board of directors of the federation, in a way comprising only the heads of various chambers. There will also be a supervisory body under the name of the General Assembly of the Federation of Chambers. The law also allows holding meetings and voting on decisions by electronic means.

There are provisions in the law to raise the efficiency of the chambers’ performance and raise the competitiveness of the business sector through performance measurement and continuous evaluation on the basis of the best international standards and practices.

In the event of any chamber’s evaluation scores falling below the limit specified by the regulation, the minister of commerce may grant the board of directors a one-year deadline to correct the status and improve the performance.