Saudi Cabinet Approves Commercial Transactions Law, Military Localisation Reaches 27.3 Percent
Saudi Arabia’s Cabinet approved the Commercial Transactions Law on 27 October. His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud, Crown Prince and Prime Minister, chaired the session in Riyadh. The Cabinet welcomed a rise in the localisation of military spending to 27.3 percent at the end of 2025. That beat the annual target of 24 percent by 3.3 percentage points, on our calculation. Local content rose to 40.9 percent.
The Ministry of Commerce said the new law has 271 articles and replaces 3 laws: the Commercial Law, the Commercial Papers Law and the Commercial Books Law. It takes effect 180 days after its publication in the Official Gazette. The ministry said the law sets the rules for commercial sales, supply sales, commercial agency and brokerage in a single piece of legislation for the first time. It also allows a minor who has reached 15 to trade with the permission of a guardian, a trustee or the court.
Localisation Runs 3.3 Points Ahead of Its 2025 Target
The Cabinet said the rise reflects the adequacy of national capabilities and supports integrated work between the public and private sectors. It restated the goal of localising more than 50 percent of total military spending by 2030, the Saudi Press Agency reported.
The General Authority for Military Industries gave the fuller figures at its Military Industries Forum in Riyadh on 25 October. Localisation reached 27.30 percent, up from 24.89 percent in 2024. Local content accounted for 40.91 percent of military spending. The sector contributed 7.468 billion riyals to gross domestic product. The Cabinet’s 27.3 and 40.9 percent are the same readings rounded to one decimal place, on our reading.
In one year the rate gained 2.41 percentage points, on our calculation. Measured against its own level, that is a rise of 9.7 percent, on our calculation. Local content runs 13.61 points above localisation, on our calculation.
Saudi military spending localisation, end of 2025
| Measure | End 2025 | Earlier reading |
|---|---|---|
| Localisation of military spending | 27.30% | 24.89% (end 2024) |
| Local content | 40.91% of military spending | 38% among sector companies (Nov 2024) |
| Contribution to GDP | SAR 7.468bn | SAR 5bn, estimated, from local content (Nov 2024) |
Figures announced by the General Authority for Military Industries on 25 October 2026 for the end of 2025, and its statements of 10 November 2025 and 21 November 2024. The November 2024 local content figure and its estimated 5 billion riyal contribution to GDP are measured among companies in the sector and are not on the same basis as the 2025 readings.
From 4 Percent in 2018 to a 2030 Goal Above 50 Percent
The authority’s governor said in November 2024 that localisation had reached 19.35 percent, against 4 percent in 2018. From 2018 to 2025 the rate climbed 23.30 percentage points, on our calculation. That is an average of 3.33 points a year over 7 years, on our calculation, and the 2025 rate is 6.8 times the 2018 level, on our calculation.
The 24 percent annual target sat 0.89 points under the 24.89 percent reached in 2024, on our calculation. The 2030 goal is more than 50 percent. Reaching 50 percent takes 22.70 more points, on our calculation. Spread over 5 years, that is 4.54 points a year to reach 50 percent, on our calculation. The rate added 2.41 points in 2025 and has averaged 3.33 points a year since 2018, on our calculation.
The authority has also moved on financing. At the 25 October forum it signed 4 memoranda of understanding with Bank Albilad, Riyad Bank, Arab National Bank and Alinma Bank on financing solutions for the sector. In November 2024 it reported 296 licensed and authorised establishments in the sector by the third quarter of that year. It put military procurement from local companies at 13 billion riyals.
Saudi military localisation path
| Measure | Value | Basis |
|---|---|---|
| Rate in 2018 | 4% | Reported Nov 2024 |
| Rate reported Nov 2024 | 19.35% | Reported Nov 2024 |
| Rate at end 2024 | 24.89% | Reported Nov 2025 |
| Rate at end 2025 | 27.30% | Reported Oct 2026 |
| Average gain a year, 2018 to 2025 | 3.33 points | Calculated |
| Points still needed to reach 50% | 22.70 | Calculated |
| Points a year to reach 50%, 2026 to 2030 | 4.54 | Calculated |
Rates are shares of military spending as published by the authority. The 19.35 percent reading is shown with the date it was reported. Rows marked calculated are our calculation.
A Commercial Law, an India Customs Pact and a New NWC Board
The Commercial Transactions Law was one of 15 numbered decisions in the session, on our count. The Cabinet approved an agreement with the Government of the Republic of India on cooperation and mutual assistance in customs matters. It reconstituted the board of the National Water Company, to be chaired by His Excellency Eng. Abdulrahman bin Abdulmohsen Al-Fadhli.
It also adopted the final accounts of the Saudi Export-Import Bank, the Social Development Bank and the Equestrian Authority for 2 previous fiscal years. It approved a memorandum with Türkiye on the municipal and housing sectors, and one between the Nuclear and Radiological Regulatory Commission and Jordan’s Energy and Minerals Regulatory Commission on nuclear safety, nuclear security and radiation protection.
On government performance, the Cabinet noted a global project management award won by the Ministry of Human Resources and Social Development, ahead of 53 entities from 28 countries.
Selected decisions of the Saudi Cabinet, 27 October 2026
| Decision | Party or body | Area |
|---|---|---|
| Law approved | Commercial law | Commercial rules |
| Agreement | Government of India | Joint customs work and mutual assistance |
| Board reconstituted | National Water Company | Water utility |
| Final accounts adopted | 3 bodies | 2 previous fiscal years |
| Memorandum | Government of Türkiye | Municipal and housing sectors |
| Memorandum | Jordan’s energy regulator | Nuclear safety, security and radiation protection |
The table lists 6 of the 15 numbered decisions, on our count. The law is the Commercial Transactions Law, the 3 bodies are Saudi EXIM Bank, the Social Development Bank and the Equestrian Authority, and the Jordanian regulator is the Energy and Minerals Regulatory Commission.
Why it matters: Localisation keeps a larger share of Saudi military spending inside the Kingdom’s own economy. The sector now contributes 7.468 billion riyals to GDP. A rate of 27.30 percent is 54.6 percent of the 50 percent mark, on our calculation. The Commercial Transactions Law is now approved, and the India agreement covers cooperation and mutual assistance in customs matters. The 4 bank memoranda aim to strengthen financing solutions for the sector.
Outlook: The next marker for business is the law’s publication in the Official Gazette, which starts its 180-day run to entry into force. On localisation, a gain of 4.54 points or more a year from 2026 would put the Kingdom on a straight-line path to reach 50 percent by 2030, on our calculation.
Sources: Saudi Press Agency, General Authority for Military Industries, Ministry of Commerce, The Edge.
