Introduction
The Saudi corporate landscape has transformed rapidly due to economic diversification efforts. Historically, corporate regulation was limited, relying on Sharia principles and traditional business customs. However, the enactment of the Companies Law (2015) and subsequent amendments in 2022 have modernized governance structures.[1]
Key Reforms in Corporate Law
One of the most significant legislative updates was the 2022 amendment to the Companies Law, which introduced:
- Flexible corporate structures to attract foreign investment.
- Greater shareholder protections through transparency regulations.
- Easier dispute resolution mechanisms via specialized commercial courts.
These changes align Saudi Arabia’s corporate governance with international best practices.[2]
Challenges and Future Directions
While the reforms have improved investor confidence, challenges remain in enforcement and legal consistency. Future regulatory efforts should focus on harmonizing legal interpretations and ensuring corporate compliance with both Sharia law and international standards.[3]
Footnotes:
[1] Companies Law, Royal Decree No. M/3 (2015).
[2] Ministry of Investment, Foreign Direct Investment Report (2022).
[3] Al-Ghamdi, Y., “Corporate Governance in Saudi Arabia,” Journal of Legal Studies (2023).
