His Excellency Dr. Majid bin Abdullah Al-Qasabi, Minister of Commerce and Investment, expressed his sincere thanks and appreciation to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud, and His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister, and Minister of Defense —may God protect them both—on the occasion of the Cabinet’s decision to approve the Commercial Pledge Law, which regulates the commercial pledge system, safeguards the rights of all parties involved, and maximizes its benefits and impact.
His Excellency explained that the Commercial Mortgage Law is part of the accelerated efforts to build the legislative framework for commercial regulations under the Kingdom’s Vision 2030, which seeks to improve the business and investment environment.
His Excellency Dr. Al-Qasabi emphasized that the system enhances the private sector’s contributions to the development process, boosts the national economy’s growth rates and operational efficiency, and improves its competitiveness in light of global developments. It also safeguards the rights of parties involved in commercial and financial transactions, and enables private-sector enterprises to leverage their operating assets and access financing effectively.
He noted that the system maximizes small and medium-sized enterprises’ ability to utilize their assets, allowing them to pledge their operating assets while continuing to benefit from them, while also safeguarding lenders’ rights, facilitating foreclosure procedures on pledged assets in the event of default, and expanding the scope of assets eligible for pledging and the enforceability of commercial pledge agreements.
His Excellency emphasized the Trade and Investment Authority’s commitment to establishing a legislative framework that stimulates and supports trade and investment and empowers private-sector enterprises, noting that the adoption of the commercial pledge system will have a positive impact on the business environment, improves the Kingdom’s credit rating, and strengthens its position in targeted international indices.
In this context, the new mortgage system has established a set of principles and concepts aligned with international best practices, aimed at bringing about a qualitative leap in the commercial and investment sectors and building sustainable economic entities that benefit the business community, as the draft of the new system primarily aims to strengthen the Kingdom’s credit market by creating conditions that improve commercial entities’ access to financing and enable asset owners to realize the value inherent in their assets.
