This study examines the impact of the rule of law on entrepreneurial activity in Middle Eastern countries between 2014 and 2020. Using panel data analysis with multiple regression approaches—Pooled OLS, Fixed Effects, Random Effects, and Generalized Method of Moments (GMM)—the paper finds robust evidence that the strength of the rule of law significantly promotes entrepreneurial dynamics. Data are drawn from the World Justice Project and the World Bank, with New Business Density as the dependent variable. Results show that improvements in institutional quality and legal transparency foster higher entrepreneurial activity, controlling for GDP growth, GDP per capita, and unemployment. Policy implications emphasize strengthening legal enforcement, transparency, and institutional accountability as essential drivers of sustainable entrepreneurship in the region.