RIYADH: Saudi Arabia’s new Companies’ Law enabled over 2,000 institutes to transition into companies in the first quarter of 2023, supporting efforts to revise and modernize the Kingdom’s trade and investment legislation and laws. The new system, launched on Jan. 19 by the Ministry of Commerce and the Capital Market Authority, established 2,048 companies in the first three months. Of these, 2,011 transitioned from an institute into a company, according to the criteria specified by the ministry. In addition, 20 companies and 14 establishments converted into joint-stock companies, even as three joint-stock companies listed publicly during the first quarter of 2023. “The new Companies’ Law will enable companies to grow, expand, address challenges, and keep on top of economic trends in the Kingdom at all levels. This is essential for realizing the goals and implementing the plans in the Vision 2030 programs,” noted the ministry on its official website. The law allowed a new form of company — a Simplified Joint Stock Company — to meet the needs of entrepreneurship and venture capital growth. It also permitted the issuance of a family charter that regulates ownership in family businesses, in addition to governance, management, work policy, employment of family members and cash profits to ensure the sustainability of these companies. It also reduced the legal requirements and procedures for small and medium enterprises and simplified the procedures for establishing companies. Under this law, many restrictions in the incorporation, practice, exit phases and company names have been removed. The ministry added that it contributed to enhancing the sustainability of economic entities, attracting domestic and foreign investment, and providing sustainable sources of finance. According to the Ministry of Investment, the changes also enhanced the diversity and strength of the local market and raised the competitiveness of the Saudi investment environment. “The new law will improve the financing and business dynamics in every sector in the economy; it should have a great positive impact on the economy for the next decades,” Mohammed Al-Suwayed, CEO of Razeen Capital, told Arab News after the law’s approval.