Close your business
Introduction
How do you close your business? The number of canceled commercial registrations rose from 71,607 in 2013 across various regions of the Kingdom to 89,343 canceled registrations in 2018, according to the General Authority for Statistics. The increasing difficulties and obligations facing business owners have made closing commercial activities and canceling registrations a viable option, even shortly after starting the business.
History
Sep 2024
The sector
Commercial Activities

The ease of obtaining a commercial register has prompted many people to start their businesses by underestimating the regulatory steps. However, when deciding to terminate their business activities, many overlook the required procedures, which exposes their establishment to financial liabilities due to delays in canceling the register. For a long time, the issue of canceling the commercial register remained a worrisome and thorny matter for merchants. This process required visiting multiple government entities, as well as terminating and liquidating licenses and labor contracts, making the cancellation of the register the final step. However, in response to complaints from business owners—especially small and medium enterprises that suffered the greatest harm due to the complexity of the cancellation procedures—the Ministry of Commerce developed these procedures through technical integration among all relevant government agencies. According to the Ministry's announcement in November 2021 via its Twitter page, the main and branch registers for sole proprietorships, as well as the branch registers for companies, can be canceled in a single step through the Ministry of Commerce website. As for the main register of companies, the company's business must be liquidated before canceling the register. After canceling the register in this step via the Ministry of Commerce website, all obligations of the establishment or company toward all entities must be terminated. Accordingly, a request to close the establishment's file is submitted to the Ministry of Human Resources and Social Development, subscribers are excluded, and a request to terminate the establishment’s file activity in Social Insurance is made by logging into Taminaty "Business" and choosing to terminate the establishment's activity. It is also required to cancel licenses and permits from municipalities and secretariats, if any, and pay the immediate cancellation fees, as delaying the cancellation of an expired license will expose you to paying renewal fees before cancellation. Regarding Zakat and Tax, the Value Added Tax (VAT) registration must be suspended through the Zakat, Tax and Customs Authority website, and then the taxpayer number must be deactivated. The cancellation will not be finalized until it is verified that all Zakat and tax returns have been submitted up to the date of register cancellation. Ending a business is not as simple as starting it. The steps for termination must be followed meticulously, and care must be taken to close all files related to the establishment with various government agencies so that delays do not result in paying bills and fines for a period during which no actual business was conducted. Because this process requires complete knowledge and familiarity with trade, labor, and other regulations, legal offices and firms work to provide these services, relieving the merchant of the burden of the steps resulting from terminating their business activity and saving them from the mistakes that many fall into due to their lack of knowledge about procedures that are constantly changing and evolving.