Lately, the Kingdom of Saudi Arabia has issued the new companies law, which will be compatible with KSA vision 2030, and encourages foreign investors to join in on the significant economic developments in Saudi Arabia. In addition, states a new form of a company called “Simplified Joint Stock Company” and is expected to meet the needs of entrepreneurship and venture capital growth.

The new law regulates all provisions related to companies, whether commercial, non-profit, or professional, and will enter into force after 180 days of being published on 29 June 2022, and it is expected that the new edition will facilitate the establishment of companies, It also addresses some of the challenges of the private sector, including the challenges of family businesses, as it will regulate family ownership in the family business, its governance and management, work policy, employment of family members, profit distribution, and the challenges of small businesses through which business initiatives are active, achieving legal protection for them and achieving justice in litigation on the basis of legislative

This article will spot on the important features of the new companies law in Saudi Arabia.

3 Types of companies!

The new companies law regulates all types of companies, whether they are commercial, non-profit, or professional companies, This gathering process aims to ensure the availability of all related provisions in a single legislative document.

Also, The law created rules to regulate family ownership in the family business, its governance and management, work policy, employment of family members, and distribution of profits through the so-called family charter, so as to ensure the sustainability of these companies.

This family charter will be binding and may be part of the company’s articles of incorporation (AOI). and It is stipulated that it does not violate the Saudi laws or the company’s articles of incorporation.

5 Forms of companies!

Under the new law, The company can be taking one of the following forms:

General Partnership Company.

• Limited Partnership Company.

• Joint Stock Company.

• Simple Joint Stock Company.

• Limited Liability Company.

• It is noted that there is a new form of company introduced by the new law called “Simple Joint Stock Company”, this form is expected to meet the needs and requirements of entrepreneurship and venture capital growth.

The new form will serve as an investment arm that enables non-profit companies to advance to the third sector, stimulate social responsibility, and allow them to generate returns in their businesses and spend them on non-profit purposes. Also, the minimum capital requirement for a joint stock company does not apply to a simplified joint stock company.

Opportunity for investors & entrepreneurs!

Definitely, these new provisions will be an excellent opportunity for investors and entrepreneurs, even if they do not have very big capital, because the law facilitates requirements and procedures for establishing companies and exempts micro and small companies from many obligations such as the obligation to appoint an auditor.

Also, the new law made it possible to implement procedures electronically through modern means of communication “remotely”, including submitting incorporation applications, attending general assemblies of shareholders or partners, and voting on decisions.

On the other hand, the new law facilitates the practice of the foreign company’s activities and business in the Kingdom through a branch, representative office, or any other form according to the foreign investment system, with the possibility of appointing an auditor by a decision of the company’s manager, and the possibility of the foreign company holding a temporary license continuing and transforming it.

And to attract investments, It allowed the issuance of different types of shares with varying categories and rights, privileges or restrictions, and the possibility of issuing shares allocated to employees to attract and motivate talent. It also allowed the distribution of profits temporarily or annually with governance that ensures that the company’s creditors obtain their rights.

Now you can!

Yes! This is the time to enhance your ability to lead, invest, and earn. With ALF Law Firm you can establish a company that is compatible with your dreams, to make them true, with various experience and skills held by our lawyers and counselors.

In today's fast-paced and highly competitive business environment, Protecting your ideas and intellectual property from theft is a more critical task for businesses than ever before. This is especially true for businesses located in Saudi Arabia, where the KSA works to develop its legal framework for protecting intellectual property.

According to that, It is important for business owners to understand the risks and take the necessary steps to safeguard their ideas and innovations, therefore maximizing the value of their business in the long run.

This article will provide an in-depth look at the current state of ideas protection in Saudi Arabia and outline the steps businesses can take to protect their ideas from theft.

What are Ideas Protecting?

Once a business idea is established, it can be used to develop a new product, improve an existing product, or create a service that offers customers a better experience that is unique and of value to customers. So, Ideas are the foundation of successful businesses and are the lifeblood of it, Thus, it can be said that identifying and protecting intellectual property has a high economic value in this knowledge-based era, and the production of intellectual property of value often requires huge investments in the time, capabilities and skills of those with distinctive mental and creative competencies. This is translated into huge investments by companies and individuals.

The more important thing about establishing the Idea is that it can be generated from a variety of sources, such as customer feedback, market research, and brainstorming sessions, there is also a possibility for more than one person to participate in its creation, know-how it created, or at least know the basics of it.

Ideas protecting is a term used to refer to the protection of intellectual property, which includes patents, copyrights, trademarks, and trade secrets. It involves taking steps to register and enforce these forms of intellectual property in order to prevent them from being misappropriated or stolen and includes filing applications with the relevant government agencies, monitoring for potential infringement, and taking legal action if necessary.

Additionally, ideas protection may also involve taking steps before starting a partnership business to protect your ideas from theft and other forms of misappropriation.

How to protect your idea In KSA!

Countries and specialized organizations have implemented various legal and technical measures. This includes creating national and international bodies that guarantee the right of intellectual property owners to register their works, patents, inventions and models. In connection with that, KSA also has established the Saudi Authority of Intellectual Property (SAIP) to organize, support, develop, sponsor, protect, enforce and promote intellectual property fields in the Kingdom in accordance with international best practices, in addition, it signed a number of international agreements that regulate intellectual property.

In order to protect your idea in Saudi Arabia, you will need to take a number of legal steps. First, you should apply to the relevant government agencies to register and enforce your intellectual property rights. Additionally, you should also take steps to protect your ideas from theft and other forms of misappropriation, such as using non-disclosure agreements that should clearly outline the confidential nature of your idea and should be signed by all parties involved.

It is important to know that there are many types of intellectual property to include all the efforts of the human mind in innovation and creativity, including:

Copyright: This right refers to the rights of the creator in his literary or artistic work of all kinds, such as books, music, oil paintings, sculptures, and films, as well as computer programs, databases, advertisements, maps, technical drawings, and so on.

Patents: The patent right is granted in a specific invention, and this patent guarantees its owner the power to choose the extent to which others can or how to use his invention, and accordingly the patentee decides whether or not to make technical information about the invention available to the public.

Trademarks: A signature or mark that distinguishes the goods or services of a company from the goods and services of other companies.

Industrial models and designs: It is the decorative or aesthetic appearance or shape that characterizes a piece, whether this model is three-dimensional (3D), or it is two-dimensional such as drawings, lines and colours.

Geographical indications: Also called “appellation of origin”, they are signs placed on commodities with a specific geographical origin or with characteristics, fame or characteristics that refer to a specific place.

Trade secrets: It is confidential information that pertains to a specific commercial activity, and its acquisition, use, or disclosure is prohibited without the permission of its owner. The Saudi Authority for Intellectual Property (SAIP) provides a platform where you can register and document your intellectual property rights in accordance with local laws and regulations.

Through SAIP's website, you can access a range of services related to protecting your creativity including registering patents for inventions; copyright protection; trademark registration for companies; industrial model registration; layout designs of integrated circuits as well as vegetarian varieties protection. Once you have selected which service best suits your needs, simply log in through ‘Absher’ – the national access system – and follow their simple steps on how to register an IP right within Saudi Arabia quickly and easily!

By taking advantage of this valuable resource provided by SAIP, you will be able to ensure that all creative works are protected under the law so that others cannot benefit from them without first obtaining permission or authorization from yourself or the company involved. So don't wait any longer - take action now by visiting SAIP's official website today!

In addition to knowing where to go when registering intellectual property rights, it’s also important to know what fees may be associated with this process. Generally speaking, registering a trademark requires a fee of 1,000 riyals in order to cover the cost of studying it as well as 500 riyals for publication costs associated with ensuring its protection under the law. Additionally, there could be other fees depending on which type you wish to register your work under - such as patent registration fees at KACST or copyright registration through MCI - so make sure you do your research before beginning the process!

Ultimately understanding how much money is required upfront can help set realistic expectations when entering into any kind of IP registrations processes – whether it's copyrights or trademarks – so that all parties involved understand their respective roles within this legal framework from start to finish!.

Duration of protection!

In Saudi Arabia, the term of protection for intellectual property rights contained in patents extends to 20 years from the date of filing the patent application, and the term of protection for trademarks is 10 years from the date of registration, subject to extension. The author’s rights were granted protection permanently throughout his life and continued for 50 years after his death. As for the industrial model certificate and the certificate of layout designs for integrated circuits, their protection period is set at 10 years from the date of filing the application.

Be fully protected!

With the presence of seven solutions offered by the new Saudi bankruptcy law, to regulate the situation of insolvent companies, the question arises about the reality of the goal that this law aims to! Does the new Saudi bankruptcy law seek to help and support these companies to continue their activities, or does it aim to end their commercial activities and exit them from the market?

In this article! Together, we will get acquainted with the most important and prominent features of the new Saudi bankruptcy law, which was issued by Royal Decree No. (M/50) on 28 Jumada Al-Ula 1439 AH corresponding to February 14, 2018, as attempt to define the law's goal towards insolvent companies.

A glance at the new bankruptcy system!

In cooperation with one of the largest international expert houses specializing in the field of bankruptcy, taking advantage of the most important international practices in this field, and analyzing the bankruptcy laws of (England and Wales - France - America - Germany - Czech Republic - Singapore - Japan), the new Saudi bankruptcy law was issued In eighteen chapters, and two hundred and thirty-one articles, to be applied to commercial and other non-commercial economic activities, and for grant commercial courts an exclusively competent to consider issues related to it, with the exception of criminal matters.

According to the law, the new bankruptcy law aims to several main objectives, some of which contribute to correcting the debtor's situation and continuing to carry out his business without prejudice to the rights of creditors instead of conducting liquidation, and thus the law is keen as much as possible to continue the debtor's activity.

In general, the objectives of the bankruptcy law are determined in the following objectives:

1-    Addressing the shortcomings of the previous law, due to its lack of a comprehensive and integrated organization regulating the issues of bankruptcy and restructuring of economic projects.

2-    Encouraging economic and investment activities and projects by creating an efficient bankruptcy system that reduces the costs associated with bankruptcy and restructuring procedures.

3-    Improving the investment environment and attracting more foreign investments by providing a legal framework for bankruptcy and restructuring that emulates the best international practices.

4-    Giving the defaulting debtor an opportunity to rectify his situation by reaching a settlement with creditors that preserves their rights, and enables the debtor to return to his commercial activity.

5-    Enhancing confidence in the credit market and financial transactions in general by creating a legal framework that takes into account the rights of creditors.

6-    Stimulating small and medium enterprises to take the initiative and engage in economic activities, by providing bankruptcy procedures commensurate with the nature of these enterprises, in addition to facilitating their access to financing from the credit market.

7-    Enable the financial sector regulators to organize bankruptcy cases and restructure the establishments operating in those sectors in proportion to the sensitivity of the sector and the risks associated with it.

 

bankruptcy procedures!

The bankruptcy law provided for seven procedures, the first is the preventive settlement procedure, which is a procedure to facilitate the debtor’s reaching an agreement with creditors to settle his debts while the debtor retains the management of his business, and the second is the financial reorganization procedure, which is a procedure aimed at facilitating the debtor’s reaching an agreement with Creditors to the financial reorganization of its activity under the supervision of the trustee of financial reorganization.

The third procedure: relates to liquidation, which is a procedure for limiting the claims of creditors, selling the assets of the bankruptcy, and distributing its proceeds to the creditors under the management of the liquidation trustee.

While the following three procedures are related to small debtors, the fourth procedure is the preventive settlement of small debtors, which is a procedure to enable the small debtor to reach an agreement with creditors to settle his debts within a reasonable period through simple procedures at low cost and high efficiency, while the debtor maintains the management of his business.

The fifth procedure: It is represented in the financial reorganization of small debtors, which aims to reach the small debtor to an agreement with the creditors for the financial reorganization of its activity within a reasonable period through simple procedures at low cost and high efficiency, under the supervision of the trustee, and the sixth procedure is: the liquidation procedure for small debtors With the aim of selling the assets of the bankruptcy and distributing its proceeds to the creditors within a reasonable period through simple procedures at low cost and high efficiency, under the management of the trustee.

Finally, the seventh procedure: the administrative liquidation procedure, which also aims to sell the bankruptcy assets, the sale of which is not expected to result in proceeds sufficient to meet the expenses of the liquidation procedure or the liquidation procedure for small debtors, under the management of the Bankruptcy Committee

Simplified procedures for small debtors!

The law’s interest in small and medium enterprises and its keenness to motivate them to engage in economic activities has emerged by distinguishing between the bankruptcy procedures followed by small debtors from those that must be followed by large enterprises, in order to enable the small debtor to rearrange its troubled financial conditions at a low cost and high efficiency within a reasonable period And through simplified procedures, without prejudice to the rights of creditors.

According to the new bankruptcy law, the small debtors are the debtors whose debts do not exceed two million Saudi riyals. This type of debtor has the right to take the procedures stipulated in the bankruptcy system, whether it is a preventive settlement, financial reorganization, or liquidation, but according to simplified procedures commensurate with the size of the business of these debtors and their debts. The bankruptcy system included simplified models of preventive settlement procedures, financial reorganization, and liquidation; For individuals and small entities with limited assets, with the aim of reducing the duration and cost of these procedures and achieving their goals with high efficiency.

 

Finally..

We at ALF Law Firm have sufficient experience and a good reputation to handle everything related to the procedures stipulated in the bankruptcy law, as these issues are handled by a team of consultants with extensive experience in the field of companies.

In the last decade, the financial services sector has benefited greatly from technological development to enable a more efficient market infrastructure. Governments around the world in general, and the government of Saudi Arabia in particular, have noticed the increasing growth and huge inflation in the financial technology markets, "FinTech", which led them to focus On financial technology as an ideal option for economic diversification and contribution to economic growth and the establishment of an integrated system for financial technology activity.

The financial technology system in the Kingdom of Saudi Arabia is highly attractive, as it allows companies to provide innovative services easily, and the infrastructure in the Kingdom enjoys integration and technical progress that allows the provision of automated services, in addition to the maturity of e-government transactions, which is the basis of the information infrastructure that will support FinTech companies to provide fast automated services. The workforce in the Kingdom is also characterized by efficiency, which contributes to attracting talent to work in FinTech companies. The solidarity of the legislative authorities also effectively supports the FinTech system, which has the effect of attracting investments to this sector.

FinTech Lab!

The FinTech Lab represents the legislative experimental environment that allows providers of FinTech products and services to test their innovative business models within specific criteria, timeframe, and regulatory requirements, and under the supervision of the Capital Market Authority. The FinTech lab receives applicants from inside and outside KSA to experiment with FinTech products and services related to securities activity with innovative business models that are ready to be tested in an experimental environment.

The Capital Market Authority aims to diversify the investment products and mechanisms available in the financial market, by supporting FinTech projects in the financial market by providing a regulatory framework that helps support FinTech innovations within KSA. So that this regulatory framework is designed to enhance and develop FinTech and enable participants to provide and test products, services, and business models related to securities activity that are commensurate with market needs within specific standards, time periods, and regulatory requirements.

Those wishing to apply for a FinTech Experience Lab must obtain a permit to provide the service or product that is based on FinTech.

FinTech experience permit!

The FinTech Experience Permit enables applicants to participate in the FinTech Lab to present and test innovative financial technology products related to securities activity on real clients within specific regulatory controls and timeframes.

The applicant for the FinTech lab obtains a permit for two years, and upon completion of the probationary period, the applicant can choose between two options: The first: implementing the exit strategy. Second: Providing the financial technology product on a larger scale, after the Authority and the applicant confirm that the permit has achieved the desired test results, that there is a plan or strategy to provide the product on a larger scale, and that the applicant is able and willing to fully comply with the Capital Market Law and its implementing regulations.

The proposed product or service to enter the FinTech Lab is required to meet the following criteria:

• - To be a securities activity.
• - To promote innovation in financial technology.
• - To be in an advanced stage of development for the experiment.
• - That the product promotes significant growth or efficiency to compete in the market.

The applicant is also required to comply with the following:

• - To have sufficient and appropriate resources to develop the financial technology product.
• - To have the ability and appropriateness to test the financial technology product.
• - He shall have integrity, sufficient skill, care, and diligence.
• - To disclose to the Authority all important events and changes in the business model.
• - To exercise due diligence in knowing the rules and regulatory requirements related to the provision of a financial technology product.
• - To be able to comply with all additional regulatory requirements that may be imposed by the Authority.

Actions and start working!

When the applicant fulfills all the conditions and obligations required by the Authority, the application for a financial technology trial permit is submitted through the channels available on the laboratory page on the Authority's website. After that, the authority reviews the application and then informs the applicant of his eligibility to obtain the permit.

In the event that the application is accepted and the permit is granted, the Authority will work to determine the additional regulatory requirements that the applicant must meet. After that, the applicant is evaluated and whether he is able to meet those requirements. If he is able, the permit is granted, and then he begins to try the financial technology product.

When the applicant obtains the permit, he must

the requirements to start practicing business, such as:

- Establishing a commercial entity in the Kingdom, and submitting all final incorporation documents to the Authority.

- Provide approved policies and procedures for managing conflict of interest cases.

- Fulfillment of all its obligations under the Anti-Money Laundering Law, the Anti-Terrorism Crimes and Financing Law, and the relevant bylaws and regulations.

- Fulfilling information security requirements and technology tests in accordance with the mechanism determined by the Authority.

- Providing the Authority with the final essential agreements with any external parties.

Finally..

The regulatory procedures for establishing and establishing financial technology projects require a high degree of diligence and legal awareness, in order to avoid project rejection or delay in its implementation. So, based on the experience gained by the team of ALF Law Firm in the field of FinTech and the related rules and regulations, ALF has helped a number of FinTech companies to obtain a FinTech experiment permit from the Capital Market Authority.

We will adopt leading international standards and administrative practices, helping us reach the highest levels of transparency and governance in all sectors”! Under the slogan “An ambitious nation.. Effectively governed..” the previous words came to confirm the keenness of the Kingdom of Saudi Arabia to take corporate governance measures in all sectors of the state.

The concept of governance has become increasingly apparent with the issuance of the Saudi Capital Market Authority’s Corporate Governance Regulations that clarify the rules and standards governing the company’s management to ensure that companies adhere to the best corporate governance practices that ensure the protection of the rights of shareholders and stakeholders, and this was followed by the issuance of the Saudi Arabian Monetary Agency’s Corporate Governance Regulations for Listed Companies Under the banking and insurance sectors.

Because of the importance of corporate governance, ALF Law Firm offers this article as part of a series of articles on setting up corporates to know about the concept of governance, its importance, and objectives, in addition to an overview of the legal framework of corporate governance in KSA.

What does corporate governance mean!!

According to the International Finance Corporation (IFC), corporate governance can be defined as "the system by which companies are managed and their business controlled". According to the Organization for Economic Co-operation and Development (OECD), it can also be defined as “a set of principles that encourage markets transparent and efficient, provide protection for shareholders and stakeholders, and hold the board of directors accountable for its responsibility to the company and shareholders.”

The Corporate Governance Regulations issued by the Board of the Saudi Capital Market Authority defined it as “rules for leading and directing the company that includes mechanisms to regulate the various relationships between the board of directors, executive directors, shareholders, and stakeholders, by setting special rules and procedures to facilitate the decision-making process and to impart a character of transparency and credibility to it in order to protect the rights of Shareholders and stakeholders and achieve fairness, competitiveness, and transparency in the market and business environment.

In general, governance expresses a structure that includes elements and processes that are linked and arranged as foundations for good and rational management, through which the best use of existing resources is made, and they are properly managed according to certain criteria that lead to the continuation of companies in performing their economic role, such as efficiency, transparency, effectiveness, financial and administrative accountability, and sustainability.

 

Why corporate governance?!

The Saudi Capital Market Authority answers this question simply by saying: “The companies that effectively apply the principles of governance enhance the level of confidence and confidence of their shareholders on their investments, because this is an indication that the board of directors and the executive management are aware of the risks surrounding the company and thus their ability to manage these risks and limit Including, which helps the investor to make his investment decision, taking into account other basic criteria for investment, because corporate governance is an effective practice that leads to attracting investors and gaining their confidence because of its advantages, the most important of which is providing justice and transparency to all stakeholders.

The Board of Directors of the Saudi Capital Market Authority also set nine main objectives for the issuance of the regulation that included the general legal framework for corporate governance, which is the Corporate Governance Regulation, and these objectives are:

1- Activating the role of shareholders in the company and facilitating the practice of their rights.

2- Clarifying of the functions and responsibilities of the Board of Directors and the Executive Management.

3- Activating the role of the Board of Directors and the committees and developing their efficiency to enhance the decision-making mechanisms in the company.

4- Achieving transparency, integrity, and fairness in the financial market, its dealings, and the business environment, and promoting disclosure therein.

5- Providing effective and balanced tools to deal with cases of conflict of interest.

6- Strengthening oversight and accountability mechanisms for the company's employees.

7- Setting the general framework for dealing with stakeholders and observing their rights.

8- Increasing the efficiency of supervision of the companies and providing the necessary tools for that.

9- Educating companies about the concept of professional behavior and urging them to adopt and develop it in a manner that suits their nature.

It is clear from the above, that corporate governance can be considered a "safety valve" for small and large companies alike, as it helps their continuity and development, in addition to contributing to companies' avoiding financial and administrative failure, activating the principle of reward and punishment.

The implementation of governance also leads to attracting more capital by creating a safe, stable, smooth, easy, and responsible investment environment that is capable of protecting investors’ properties, in addition to allowing creditors the opportunity to assess credit risks and monitor the company’s financial position.

On the other hand, governance contributes to reducing corruption by increasing supervision and internal control over the distribution of funds and decision-making.

 

The legal system of corporate governance in KSA!

During its current legislative revolution, the Kingdom of Saudi Arabia was keen to include and obligate the new legal systems to the rules and applications of governance whenever possible, so that these systems could support the ambitious vision of the Kingdom and follow its reform approach by setting determinants that serve public interests and private rights.

Looking at the Saudi Companies Law issued by Royal Decree No. (M/3) on 28/1/1437, as well as the new Saudi Companies Law (1443), which will replace it this year, we find that the two systems included the application of governance procedures and rules starting from the establishment stage, and during The company’s practice of its work, its transformation, its merger, and its liquidation, as well as the rules of liability for the damages caused or incurred by the company due to one of the founders, managers, or any of the shareholders, auditors or liquidators who knew its secrets by virtue of his position therein.

Also, on May 16, 1438, the Board of the Capital Market Authority issued a corporate governance regulation, based on the Companies Law issued in 1437, and the regulation was amended on 1/6/1442 to keep pace with the rapid developments and changes in KSA.

Where we find in the companies’ law - for example, but not limited to -, clear rules at the establishment stage, the most important of which is related to the necessity of writing its founding contract and publishing it, and providing the competent ministry with a copy of that contract, in addition to obligating companies to put their name, registration number, type and address of their head office on all contracts and clearances, and an indication of the amount of the company’s capital and the paid-up capital.

We also find rules related to the rights and obligations of the partners and the prohibition of one of them from obtaining any benefits without the consent of the rest of the partners, in addition to their right to a judicial claim and compensation for any damages resulting from the violation of these rules. It also included the rules for a partner's withdrawal and/or the exit of some partners, and the obligation to determine each partner's share of profits and losses.

We find that the law has dealt with all the principles of governance in its texts, with regard to the rules regulating joint-stock, limited liability, holding, and foreign companies, and how they are transformed and merged, in addition to the penalties for not taking any of the governance measures stipulated in the law.

On the other hand, article (94) of the Corporate Governance Regulations under the title "Implementing Effective Governance" stipulates that:

“The board of directors sets corporate governance rules that do not conflict with the mandatory provisions of this regulation, and it must monitor their application, verify their effectiveness, and amend them when necessary. In this regard, it must do the following:

1- Verify the company's compliance with these rules.

2- Review and update the rules in accordance with the legal requirements and best practices.

3- Reviewing and developing the rules of professional conduct that represent the company's values, and other internal policies and procedures to meet the company's needs and in line with best practices.

4- Keeping the members of the Board of Directors always informed of developments in the field of corporate governance and best practices, or delegating this to the Audit Committee or any other committee or department.

 

To be continued..

This was an overview of the legal framework for corporate governance in the Kingdom of Saudi Arabia. At ALF Law Firm, we are proud that we have experts in the field of applying corporate governance procedures and rules in all types of companies and ensuring their compliance with laws and regulations.

 

In the recent past, technological development, digital transformation, and electronic transactions were seen as the tools of the future in the world of business and finance, and many did not expect that this future might become present in a few years, and that "e-commerce" would become one of the most important and best ways to invest and make profits.

With the spread of e-commerce transactions and the increase in their size and the launch of many different e-shops, in addition to the increasing trend of shoppers towards getting all their needs of services or products electronically, especially with the crisis of the pandemic of Corona  (Covid-19), the need for the legal regulation of transactions that is carried out has emerged In these ways, especially with the presence of real risks related to protecting the security of the consumer and securing his money from being tampered with.

Therefore, it was necessary for governments to be interested in regulating the e-commerce process legally so that the consumer feels a real similarity between e-Shops and traditional shops, especially with regard to protecting his rights as a consumer and his personal data as a user of e-shops platforms.

What are e-Shops?!

The e-Shop is an electronic platform that allows the service provider to offer or sell a product, provide a service, advertise it or exchange its data.

So simply! The definition of the electronic store came from the Saudi e-commerce system, which also defines e-commerce activity as “an activity of an economic nature undertaken by the service provider and the consumer - in whole or in part - by electronic means, in order to sell products, provide services, advertise them, or exchange their data".

According to these two previous concepts, the concept of the e-Shop becomes clear, as it expresses a virtual store created by an electronic means that can be accessed using the Internet to purchase, review or advertise a service or product whether it is active only online (Pure Play) - such as Amazon and eBay - or Had a store or a physical or traditional site that can be visited in person (Click and Mortar) - such as the Best Buy site or the Target site - it is considered an exact copy of the retail store located in the shops and markets, but in a modern and advanced form to sell products or services to consumers.

How to set up an online store in Saudi Arabia?!

Other than site or application programming, design, hosting and domain reservation, electronic payment gateway provision, and other technical matters, some legal procedures must be taken to license the online store to carry out its activities legally.

Despite the different regulations and legislation adopted by countries around the world, there are general rules and basic requirements that are almost agreed upon by most of the legal systems and legislations in different countries, because the online store is not often limited to providing its services and products on a specific spatial scale.

The Kingdom of Saudi Arabia has been interested in developing a package of regulations and legislation to regulate e-commerce operations and establish online stores, the most important of which is the e-commerce system and its executive regulations, the personal data protection system, in addition to developing a set of guides and instructions for e-commerce service providers and consumers, such as cybersecurity guidelines for e-commerce's service providers, cybersecurity guidelines for e-commerce's consumers, the guideline for online stores, self-assessment checklist for online stores compliance, information security regulatory guide, principles of bank customer protection.

In order to establish the online store, the company or person wishing to engage in this activity must follow the procedures and rules stipulated in those laws, regulations, and guidelines in order to be able to practice its activity officially. Among the most important of these measures are the following:

• Obtaining a commercial register from the Ministry of Commerce and Investment or a freelance document from the Ministry of Human Resources and Social Development to practice e-commerce activity.
• Having a commercial bank account in the name of your store in a Saudi bank.
• Providing a secure and reliable electronic payment method through approved banking channels.
• Registration on one of the e-stores authentication platforms and obtaining the license.

Other terms!

After establishing the online store from the technical and legal aspects, the person who initiates the e-commerce activity through the online store shall abide by some obligations aimed at regulating the relationship between him and the consumer, protecting the consumer from deception and manipulation and providing a safe digital experience for consumption through the online store, and among the most important of these requirements the following:

•  Contracting with a shipping company to deliver orders to customers quickly.
•   Support the online store of the Arabic language.
•  Provide the necessary basic data such as phone number, e-mail, address, instant chat with customers, and finally the various electronic payment methods.
• Clarify the terms of the contract with the consumer, the policies for delivering the product or providing the service, shipping costs, and the steps to complete the purchase process.
•  Clarify an explicit policy for replacement and return for the buyer to see before completing the purchase process.

Online Store Documentation!

Building trust between the merchant and the shopper is one of the most important challenges facing e-commerce, and one of the most important services provided by the Saudi government to provide a sense of safety for shoppers while using online stores to search for their needs is the online store documentation service through the “Maarof” platform.

Where the Saudi Ministry of Commerce and Investment, in cooperation with "Thiqa" Business Services Company, launched the “Maarof” service as a third party whose mission is to verify all merchants who launch online stores, document those stores, and ensure the quality of the products offered by them, in order to provide a sense of credibility and safety within the hearts of shoppers towards the online store. On the one hand, and to give online store owners an opportunity to effectively market their stores on the other.

• Thus, the “Maarof” service aims to build trust between the merchant and the shopper during the online shopping journey in many online stores, and this is done through three basic stages, namely:
•  The owner of the online store registers and documents his store and social media pages on the “Maarof” platform.
•  After that, the shopper can search within "Maarof" for trusted online stores according to the product or service he desires.
•  The shopper evaluates the online store that he dealt with after testing and completing the order and purchase, and this evaluation appears in the profile of the online store on the “Maarof” website.
• In order to register on the “Maarof” platform, no specific conditions are required, and registration on “Maarof” is free. However, the online store must adhere to the following:
•    The name of the online store should be in Arabic and appropriate and does not violate the Sharia or the public interest.

The name of the online store should not be similar or identical to an existing or reserved name.

Finally..