Chambers of Commerce in the Kingdom

The Chambers of Commerce in the Kingdom of Saudi Arabia are non-profit entities aimed at promoting various commercial activities across commercial sectors. They represent the interests of the business community - within their jurisdiction - to ministries, authorities, and public institutions, and also work to protect and develop them.

The establishment of the Chambers of Commerce in the Kingdom dates back to the mid-twentieth century. The initial idea to create a Chamber of Commerce originated in Makkah al-Mukarramah and was spearheaded by Hussein Bin Mohammed Jastaniah, a Saudi student studying in India. During his studies there, he became acquainted with the Indian chamber system, studied its operations, and explored its implementation.

The Chambers of Commerce are established by a decision from the Minister of Commerce. In 1949, the first law for the chambers was issued, followed by another law in 1980. The ministerial decision for its implementing regulations was issued in 1981. The Ministry of Commerce regularly reviews commercial laws, and the competent entity at the ministry undertakes the continuous update of the chambers' draft law and its implementing regulations. The aim is to meet the requirements of the chambers and their boards of directors, ensuring they remain aligned with ongoing developments.

On December 7, 2020, a new Chamber of Commerce Law was issued, which is currently in effect. This was enacted by Royal Decree No. (M/37) dated December 7, 2020.

The new Chamber of Commerce Law facilitates the initiation and conduct of business activities, improves the performance of the chambers through performance indicators and efficiency enhancements according to global best practices, and strengthens strategic partnerships to develop economic activities across all regions, thereby boosting the competitiveness of the business sector. The law unifies efforts to serve the private sector by establishing and restructuring Chambers of Commerce according to administrative provinces. It allows for the creation of multiple Chambers of Commerce within a single province, as well as offices or branches in its affiliated governorates and centers. Additionally, for the first time, it enables foreign investors to hold membership on the boards of Chambers of Commerce by removing the membership requirement for Saudi nationality. Membership on the board is limited to two consecutive terms. The law facilitates the initiation and conduct of business by exempting new members (companies and institutions) from Chamber of Commerce membership fees for three years from the date of their registration in the commercial register. It allows those engaged in licensed commercial activities to register with the Chamber of Commerce without requiring separate memberships for each branch of the same commercial entity, unlike the previous law which imposed fees for each registered branch and institution. The new law stipulates the renaming of the Council of Chambers to the 'Federation of Chambers' and the restructuring of the Federation Council, which comprises the presidents of the chambers. It introduces a supervisory entity, the 'General Assembly of the Federation of Chambers,' and activates the roles of the general assemblies of the chambers of commerce, granting them the necessary powers in accordance with governance principles. Additionally, it permits the holding of meetings and voting on decisions through electronic means. The law aims to enhance the efficiency of the chambers' performance by implementing continuous performance measurement and evaluation. If a chamber's performance rating falls below the threshold specified by the law, the Minister of Commerce may grant the board of directors a one-year period to address the issue and improve performance. If the performance continues to fall below the required standard, the minister has the authority to restructure the board of directors.

The Kingdom has twenty-six Chambers of Commerce, which are: Riyadh, Jeddah, Eastern Province, Makkah al-Mukarramah, al-Madinah al-Munawwarah, Qassim, Taif, al-Ahsa, Hail, Abha, Najran, Jazan, al-Bahah, al-Qurayyat, al-Jawf, Arar, Yanbu, al-Majma'ah, al-Zulfi, Tabuk, al-Kharj, Unayzah, al-Mikhwah, Bisha, ar-Rass, and Hafr al-Batin. These chambers are distributed across their respective provinces and cities and collectively form the Council of Saudi Chambers. This council supports and represents the interests of the business sector and the Chambers of Commerce both domestically and internationally through its membership in local and international organizations.

To improve the performance of the Chambers of Commerce in the Kingdom, the Council of Saudi Chambers officially announced its name change to the Federation of Saudi Chambers in 2021. Its official headquarters is in Riyadh City. This new name reflects the true essence of this vital economic entity, which serves as a regulatory umbrella for the Chambers of Commerce and the business sector in the Kingdom. It aims to enhance the national economy and build international business partnerships.

The Federation of Saudi Chambers was established by Royal Decree to address the shared interests of the Kingdom's Chambers of Commerce. The Chambers of Commerce Law, issued by the Council of Ministers, includes numerous development and improvement pillars. It encompasses amendments that align with the current economic phase requirements of the Kingdom and the comprehensive transformation it is undergoing, in line with Saudi Vision 2030.

The responsibility of the chamber is to promote, protect, and develop commercial activities within its jurisdiction. It is empowered to use all possible means and methods in accordance with regulatory procedures and in coordination with the relevant entities. The chamber is also responsible for preparing studies, research, and reports on the performance and development of various commercial sectors.

The chamber provides its members with laws, regulations, decisions, statistics, and instructions related to commercial activities, as well as their classification and publication. It also supplies the Ministry of Commerce and relevant public authorities and institutions with data, information, and studies related to commercial activities upon request.

The chamber issues certificates and documents, and it verifies the authenticity of its members' signatures. It contributes to all aspects of developing establishments engaged in commercial activities, including providing advice to members on import and export matters, financing methods, and export development. This is especially aimed at helping startups and small and medium-sized enterprises improve their performance, overcome financing, management, and investment challenges, and enhance their competitiveness.

The chamber organizes lectures, courses, seminars, and workshops within its field. It also hosts and manages conferences and exhibitions for national industries and products. Additionally, the chamber submits suggestions and opinions related to commercial activities to the relevant entities.

The Chamber of Commerce also undertakes several tasks, including resolving disputes related to commercial activities, releasing and publishing magazines, periodicals, and other publications related to these activities, and establishing training facilities in fields aligned with its mission, ensuring no competition with the private sector. This is done after obtaining approval from the ministry and meeting the regulatory requirements for licensing. Additionally, the chamber sends trade delegations abroad in agreement with the Ministry of Commerce, relevant entities, and the Federation of Chambers, receives foreign trade delegations, collaborates with relevant entities to achieve its objectives within its scope of authority, and develops investment opportunities within the Kingdom.

The chamber also sends invitations to its members, to encourage them to participate in conferences, workshops, seminars, and courses organized by governmental and non-governmental entities, providing them with the outcomes and insights gained from these events. Additionally, the chamber submits an annual report on its activities to the Federation of Chambers and the Ministry of Commerce.

The chamber has a Board of Directors formed every four years, with its members appointed by a decision from the Minister of Commerce. The number of members shall not exceed eighteen, and no more than one member may be elected to represent a single commercial establishment. Additionally, no member is allowed to run for more than two consecutive terms. A term is considered complete if it exceeds two years.

The chamber's Board of Directors meets at least once every two months (sixty days) upon the invitation of the chairman. An emergency meeting can be convened at any time if necessary, and the invitation must include the meeting agenda.

The Board of Directors of the chamber is responsible for approving the chamber's general policies and developing plans, programs, and projects that assist in fulfilling its duties. The board also reviews proposed administrative and financial regulations, chamber employee regulations, governance regulations, and training and scholarship regulations, and presents them to the General Assembly for approval.

The Board of Directors also manages the chamber's fixed and movable assets, and represents it in leasing, litigation, borrowing, and accepting donations. It monitors the chamber's performance and quarterly reports, reviews the annual report, final accounts, and draft budget for approval, and presents them to the chamber's General Assembly for adoption. Additionally, the board provides the Ministry of Commerce with copies of these documents.

The board is responsible for appointing and terminating the services of the Secretary-General of the Chamber, forming sectoral and internal committees, and delegating them as deemed appropriate.

The Federation of Saudi Chambers includes thirty-five national committees, which are: industrial, entertainment, real estate, entrepreneurship, contractors, agriculture and fishing, mining, commercial, information and communication technology, financial and insurance sector, consulting professions, accommodation and food, hajj, umrah, and visitation activities, women's salons and workshops centers, private training and education, logistics, health, nutrition and catering, iron industry, gypsum manufacturers, cement companies, exports, local content and procurement, fuel stations companies, lubricants and base oils, precious metals and gemstones, fresh dairy producers, appraisal, poultry producers, pharmaceutical industries, recruitment, feed manufacturers, human resources companies, ceramic and porcelain manufacturers, and private laboratories.

The national committees within the Federation of Saudi Chambers work to develop the sector they represent and to address the general obstacles and challenges it faces. To achieve this, they perform the following tasks:

Supporting and following up on common interests of the national business sector.

Promoting the role of the sector through media and introducing its importance.

Enhancing cohesion and cooperation among enterprises within the same sector.

Supporting and assisting national enterprises in gaining larger shares of local and global markets.

Strengthening ties among representatives of enterprises operating in each sector and facilitating easy communication between them.

Enhancing the relationship between national committees and corresponding sectoral committees to serve the economies of provinces and governorates.

Promoting the sustainability of national companies and institutions.

In an effort to facilitate services for its members, the Federation of Saudi Chambers launched a unified portal for the chambers of commerce in 2021. This coincided with the Chamber of Commerce Law and the preparation of economic studies on private sector issues, contributing to overcoming challenges and fostering business prosperity.