Setting Up Consulting and Professional Companies in Saudi Arabia: Law, Engineering and Management Consulting

Introduction

With the major legislative changes stemming from Saudi Vision 2030, the consulting and professional services sector has undergone a radical overhaul led by the Professional Companies Law (Royal Decree M/17) and the regulations of the Ministry of Justice, the Saudi Council of Engineers and the Ministry of Investment, opening the Saudi market to the world’s largest professional and consulting firms with full 100% foreign ownership.

1. International Law Firms and Legal Consultancies

Under the Implementing Regulations for Licensing Foreign Law Firms issued by the Ministry of Justice (by a joint ministerial decision with the Ministry of Investment):

• Legal forms available to international law firms:
  1. 100% foreign-owned branch of a foreign law firm: Licensed directly by the Ministry of Justice after obtaining Ministry of Investment registration.
  2. Joint professional company: Between a foreign law firm and one or more licensed Saudi lawyers.
• Key licensing conditions for foreign law firms:
  • The foreign firm must have an international reputation and be licensed to practise in at least two countries or in two provinces of a federal state.
  • The firm must have no less than 10 years of international legal practice.
  • Two partners must be named to represent the office in the Kingdom, one of whom is a permanent resident in Saudi Arabia (residing no less than 180 days a year) with no less than 10 years of professional experience.
  • A commitment to knowledge transfer and training of Saudi national talent, and that the proportion of Saudi lawyers in the office is not less than the prescribed Saudization rates.
  • The foreign firm must not refer cases relating to Saudi law outside the Kingdom except within the permitted advisory limits.

2. Engineering Consultancy Firms

• Reference authorities: Saudi Council of Engineers and the Ministry of Investment.
• Ownership options:
  • 100% foreign ownership is available to international engineering firms in line with the classification and accreditation standards issued by the Saudi Council of Engineers.
• Procedural requirements:
  1. Accredited operational experience and audited financial statements of the parent company.
  2. Registration of the engineers and experts responsible for managing the Saudi office with the Saudi Council of Engineers and obtaining professional accreditation.
  3. Issuance of the engineering investment licence, then the Commercial Registration from the Saudi Business Center as an engineering consultancy company.

3. Management, Technical and Financial Consulting Firms

• Reference authorities: Ministry of Investment and the Saudi Business Center.
• Ownership conditions:
  • 100% foreign ownership through the general service investment licence route.
  • Capital: The law sets no minimum capital (you can start with a nominal capital such as SAR 25,000 or SAR 100,000, set by the partners in the articles of association).
  • Requirements: The parent company’s Commercial Registration and financial statements attested by the Saudi embassy, or obtaining an Entrepreneur licence or Premium Residency for individuals.