Reforms to Saudi legal sector set to attract foreign law firms to the Kingdom

The initiative aligns with Saudi Arabia’s broader goals of stimulating foreign investment and encouraging international companies to relocate their regional headquarters to the Kingdom. (File/Shutterstock)
Short Url
Updated 01 September 2024
Follow

Reforms to Saudi legal sector set to attract foreign law firms to the Kingdom

  • This initiative is part of a broader strategy to attract foreign investment and enhance the Kingdom’s business environment

RIYADH: Saudi Arabia is on the brink of a transformative policy shift that would permit licensed foreign law firms to establish companies fully owned by non-Saudis.

This initiative, announced by the National Competitiveness Center, is part of a broader strategy to attract foreign investment and enhance the Kingdom’s business environment.

The NCC has solicited public feedback on a Ministry of Justice proposal through its official account on X, which could fundamentally reshape the legal landscape in Saudi Arabia.

A progressive legal reform

The proposal seeks to amend the first paragraph of Article 50 of the Kingdom’s Code of Law Practice. If enacted, it would allow non-Saudi law firms to set up wholly foreign-owned professional companies.

These firms would offer legal advice on the Kingdom’s regulations and represent clients in court through registered Saudi lawyers.

Details posted on the Istitlaa platform reveal that this project aims to advance the legal profession, improve the quality and efficiency of the industry, and integrate global expertise into the local context.

Furthermore, it is designed to bolster the Kingdom’s competitiveness, enhance its business climate, and elevate the efficiency of the justice system by increasing professionalism within the legal sector.

The proposed amendment signifies a progressive step in Saudi Arabia’s legal reforms.

By allowing foreign law firms to operate independently, the Kingdom aims to develop its legal profession by introducing international standards and practices.

Lebanon-based attorney Jihad Chidiac told Arab News that permitting foreign law firms to set up offices in Saudi Arabia enhances the quality of legal services by combining global expertise and experience with local knowledge and specificities.

He added: “These firms operating according to international legal standards may encourage the development of a more solid legal framework and regulatory environment, which is essential for attracting foreign investment and fostering a transparent business environment.”




Jihad Chidiac, Attorney at Law, Lebanon, said permitting foreign law firms to set up offices in Saudi Arabia enhances the quality of legal services. (Supplied)

Homam Khoshaim, a partner in corporate finance at London-based law firm Addleshaw Goddard, echoed this sentiment, and told Arab News: “The entry of additional international law firms in the Kingdom indicates a growing legal sector, healthy competition among legal services providers, and a growing economy that demands its legal needs be met.”

He added: “Clients stand to benefit from a more diverse legal market offering a wider range of services, deeper expertise, and international networks. This is especially advantageous for Saudi-based clients that operate globally.”




Homam Khoshaim, a partner in corporate finance at London-based law firm Addleshaw Goddard, says entry of international law firms in Saudi Arabia indicates a growing legal sector. (Supplied)

Boosting competitiveness and investment

This initiative aligns with Saudi Arabia’s broader goals of stimulating foreign investment and encouraging international companies to relocate their regional headquarters to the Kingdom.

By creating a more attractive legal environment, the Kingdom hopes to draw significant foreign capital, which will, in turn, fuel economic growth and diversification.

Talat Hafiz, a Saudi-based economist, highlighted to Arab News believes there will “definitely” be “more foreign investments” in Saudi Arabia as a result of the changes, adding: “It will help localize some industries, transfer know-how, and create thousands of job opportunities for Saudi nationals.”




Talat Hafiz, Economist, Saudi Arabia, predicted increased investments in Saudi Arabia. (Supplied)

The ability for foreign law firms to operate independently is expected to improve the ease of doing business in the Kingdom, making it a more attractive destination for international firms.

The legal reforms are seen as a critical component of this effort, aiming to create a robust legal infrastructure that supports economic activities and offers high-quality legal services to both local and foreign entities.

Supporting Vision 2030 goals

The initiative is also in line with Saudi Arabia’s ambitious Vision 2030 objectives, aimed at reducing the Kingdom’s dependence on oil, diversifying its economy, and developing public service sectors.

Chidiac pointed out that this policy could “support several objectives of Vision 2030, particularly in terms of attracting more foreign investors and multinational corporations that seek international, modern, and innovative legal infrastructure in business and commercial transactions.”

Foreign legal firms can support economic diversification by providing legal services in finance, energy, infrastructure, and technology.

Chidiac said: “The Saudi legal market is increasingly significant on both a regional and global scale, largely due to the country's ambitious economic diversification plans under Vision 2030.”

He added: “The legal market in Saudi Arabia is directly impacted by these expansive projects, which necessitate a wide range of legal services, from corporate and finance to energy, projects, and infrastructure, as well as dispute resolution.”

Creating employment opportunities

One of the key benefits of this proposed change is the potential for job creation.

By attracting foreign law firms, the initiative is expected to generate a range of employment opportunities for Saudi citizens, both directly and indirectly. This includes roles within the legal profession as well as ancillary services that support legal firms.

Chidiac added that “the establishment of foreign legal firms will create job opportunities, most importantly in the legal sector, by providing direct employment opportunities for local lawyers, paralegals, and administrative staff.”

He explained that foreign legal firms can create indirect employment opportunities by helping companies operate more effectively, stimulating economic growth, and fostering entrepreneurship, thus creating a favorable ecosystem for business development in Saudi Arabia.

The influx of foreign law firms is expected to stimulate the local job market by providing new career paths for Saudi nationals. This aligns with the government’s efforts to reduce unemployment and increase the participation of Saudi citizens in the workforce.

The unemployment rate in Saudi Arabia fell to 7.6 percent in the first quarter of 2024, compared to 7.8 percent in the fourth quarter of 2023, according to the General Authority for Statistics’ labor force survey.

By offering competitive salaries and professional development opportunities, foreign law firms can attract and retain top legal talent in the Kingdom.

“Investing in local talent is crucial for gaining insights into the legal system and ensuring cultural alignment. Firms must commit to continuous learning to adapt to rapid legal changes, ensuring the team is well-versed in new laws and regulations,” Khoshaim said.

A new era for the Saudi legal sector

This proposed amendment represents a significant step forward for the Saudi legal sector. By opening the doors to foreign law firms, Saudi Arabia is signaling its commitment to modernizing its legal framework and aligning it with international standards.

This move is expected to not only enhance the quality of legal services available in the Kingdom but also to make Saudi Arabia a more competitive and attractive destination for global businesses.

In order to ensure the proposed changes are well-received and able to be successfully implemented, the Ministry of Justice has initiated a public consultation, seeking opinions from lawyers, foreign law firms, specialists, academics, businesses, and the general public.

As Saudi Arabia moves forward with this proposed amendment, the legal community is watching closely. The successful implementation of these reforms could serve as a model for other countries in the region, showcasing the benefits of a modern and open legal market.

By embracing international standards and practices, Saudi Arabia has the potential to become a leading legal center in the Middle East, attracting top legal talent and fostering a dynamic business environment.


Global economy to grow steadily in 2025 despite market shifts, say experts at Saudi forum 

Updated 11 sec ago
Follow

Global economy to grow steadily in 2025 despite market shifts, say experts at Saudi forum 

RIYADH: The world economy is set to maintain steady growth in 2025, buoyed by resilient fundamentals despite market volatility and structural shifts, according to Citigroup’s Global Chief Economist Nathan Sheets. 

Speaking at the Capital Markets Forum in Riyadh, Sheets outlined key themes shaping the year ahead, focusing on global economic resilience, normalization of inflation and interest rates, and exceptionalism in market performance. 

“During the year ahead, the relatively solid fundamentals of the global economy are likely to transcend any kinds of uncertainties that we face,” Sheets said during the event, which runs from Feb. 18 to 20. 

Emerging markets also took center stage, with Raman Subramanian, managing director and global head of index research and development at MSCI, emphasizing the growing role of the Gulf Cooperation Council in global indices. 

“Digging deeper into the MSCI Emerging Market Index, you see the weight of the GCC has gone from about 1.5 percent to about 7 percent today,” he said. 

Subramanian also noted technology’s rising prominence in global benchmarks, with AI-adjacent sectors now accounting for over 30 percent of industry weight. 

Meanwhile, Ahmed Shams El-Din, managing director and head of global research at EFG Hermes, described the Middle East as a promising region for growth and value creation but noted its uneven development. 

“Countries are very different in terms of economic fundamentals, in terms of the opportunities for growth and the challenges each country is facing on a standalone basis,” he explained. 

Economic diversification and non-oil growth remain central themes, with Saudi Arabia and the UAE leading the way. Shams El-Din cautioned, however, that population growth and capacity constraints could moderate the pace of expansion. 

“Capacity constraint and funding challenges are going to play out parallel to the real developments that we are seeing on the ground,” Shams El-Din said. 

Subramanian also highlighted major trends shaping global markets, including technology transformation, health care, environmental resource management, and evolving societal and lifestyle shifts. 

“The move toward renewables has really impacted the way investors are allocating to the energy sector,” he added. 

The forum, held at the KAFD Conference Center, is set to explore deeper macroeconomic trends and capital market shifts. Key sessions include discussions on the Middle East’s growing role as a financial hub and the future landscape of global markets.


Oil Updates — prices edge higher on Kazakhstan supply disruption

Updated 34 min 11 sec ago
Follow

Oil Updates — prices edge higher on Kazakhstan supply disruption

RIYADH: Brent crude oil prices advanced on Tuesday, adding to gains in the previous session after a drone attack on an oil pipeline pumping station in Russia reduced flows from Kazakhstan, but gains were capped on the prospects of supply rising soon, according to Reuters.

Brent crude futures gained 15 cents, or 0.2 percent, to $75.37 per barrel at 07:54 a.m. Saudi time. US West Texas Intermediate crude futures were up 67 cents from Friday’s close at $71.41 a barrel. There was no settlement for WTI on Monday due to the US Presidents’ Day holiday.

“The overriding theme driving oil prices lately has been around supply expectations. With the weakness in prices over the past weeks, news of a drone strike on Kazakhstan’s export pipeline in Russia has provided the catalyst for some bearish sentiment to unwind,” IG market strategist Yeap Jun Rong said in an email.

The drone strike on the Kropotkinskaya station in Russia’s southern Krasnodar region reduced shipments from Kazakhstan to world markets by Western firms including Chevron and Exxon Mobil, operator Caspian Pipeline Consortium said on Monday.

The Black Sea CPC Blend oil loading plan for February would remain unchanged, two sources familiar with the plan told Reuters.

“However, longer-term gains are likely to remain capped as the market may anticipate higher supplies from OPEC+ and Russia further down the road, while improvement in demand outlook particularly from China still remains uncertain, going by recent economic data,” IG's Yeap said.

BMI analysts said in a note that they see Brent prices averaging $76 a barrel in 2025, down 5 percent from the 2024 average, because of market oversupply, tariffs and trade tensions.

OPEC+ producers are not considering delaying a series of monthly oil supply increases scheduled to begin in April, according to a Russian state media report.

In December, OPEC had pushed back a plan to begin raising output to April, due to weak demand and rising supply outside the group.

Markets were also waiting to see if Russia-Ukraine peace talks will bear fruit, as US and Russian officials meet for talks in Saudi Arabia later on Tuesday.

“There is seemingly plenty to be bearish about in the crude market, the biggest factor now being the outcome of Ukraine negotiations. Russian oil may partially come back to the legitimate market, though there are of course many permutations as to the end result here,” said Sparta Commodities analyst Neil Crosby.


Saudi minister highlights strong ties as Kingdom and Egypt sign energy efficiency deal

Updated 18 February 2025
Follow

Saudi minister highlights strong ties as Kingdom and Egypt sign energy efficiency deal

  • Prince Abdulaziz bin Salman says joint initiatives will enhance regional energy security, sustainability
  • Saudi companies to launch 5 new solar and wind energy projects in Egypt as part of collaboration

CAIRO: Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman, reaffirmed the Kingdom’s commitment to strengthening energy cooperation with Egypt during his address at the Egypt Energy Show on Monday.

The minister was speaking after the signing of an executive plan between Saudi Arabia and Egypt aimed at enhancing cooperation in the field of energy efficiency.

Under the executive plan, both countries will work together to establish a national energy efficiency program in Egypt, which will include drafting regulations and technical standards, capacity building, raising awareness, and fostering the development of energy service companies.

Prince Abdulaziz emphasized the brotherly relationship between Saudi Arabia and Egypt, saying that both nations share a responsibility to lead the transformation of the energy sector and adding that the collaboration aligned with Saudi Vision 2030 and Egypt’s strategic energy transformation goals.

In his address, the minister thanked Egypt’s leadership and its role in fostering robust relations between the two nations, and he highlighted the several major joint energy initiatives announced on Monday as ways of enhancing regional energy security and sustainability.

As part of the collaboration, five new solar and wind energy projects will be launched in Egypt by Saudi companies, boasting a combined capacity of 1.696 gigawatts and an investment of about SR6.2 billion ($1.65 billion). 

The projects will be developed by ACWA Power, Alfanar, FAS, and MOWAH.

Additionally, ACWA Power has signed a power purchase agreement with the Egyptian Electricity Transmission Company for a 2GW wind energy project in South Hurghada.

With an investment of SR8.6 billion, the initiative is set to become the largest wind energy project in Egypt, further advancing the country’s renewable energy ambitions.

The Saudi-Egypt Electricity Interconnection Project was also highlighted as a significant step toward regional cooperation, with a SR6.7 billion investment and the ability to exchange 3,000 MW of electricity between the two nations once completed.


Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN

Updated 17 February 2025
Follow

Saudi wealth fund’s SURJ Sports Investment acquires minority stake in DAZN

RIYADH: SURJ Sports Investment, the sports arm of the Public Investment Fund, has acquired a minority stake in DAZN to broaden broadcasting opportunities and enhance access to both live and on-demand sports content.

This strategic investment aims to support the growth of Saudi Arabia’s sports sector while bolstering DAZN’s presence in the Middle East and other key markets, according to an official statement released on Monday.

As part of the deal, SURJ and DAZN will launch DAZN MENA, a joint venture designed to elevate sports broadcasting capabilities across Saudi Arabia and surrounding markets.

“This investment is in line with SURJ’s mission to drive fan engagement, boost sports participation, and unlock transformative opportunities, all while positioning the region as a hub for world-class sports,” said Danny Townsend, CEO of SURJ Sports Investment.

The collaboration is set to accelerate the growth of the broader sports sector by enhancing fan engagement and supporting initiatives that encourage sports participation.

“As part of the DAZN MENA joint venture with SURJ, DAZN is committed to expanding sports access and delivering an unparalleled entertainment experience to a global community of passionate fans,” added Shay Segev, CEO of DAZN.

Earlier in January, SURJ entered into a strategic partnership with US-based Enfield Investment Partners. This collaboration is focused on co-investing in global sports properties, including teams, leagues, media rights, and infrastructure. Enfield launched a $4 billion global sports asset fund and will establish a presence in SURJ’s Riyadh offices to support mutual growth and objectives.

Founded in 2023, SURJ Sports Investment is dedicated to international sports investments and advancing Saudi Arabia’s sports ecosystem. Its strategy encompasses investments in broadcasting, digital platforms, grassroots initiatives, and fan engagement.

Through this partnership, DAZN will serve as a key streaming and broadcasting partner for Saudi sports, significantly expanding their reach to a global audience. Operating in over 200 markets, DAZN has built a platform that integrates live sports streaming with interactive digital experiences.

The agreement with SURJ is expected to usher in new broadcasting technologies and further expand the accessibility of sports media in the region.


Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal

Updated 17 February 2025
Follow

Saudi Arabia unveils $7.7bn mining investments in Wa’ad Al-Shamal

RIYADH: Saudi Arabia’s mining sector is poised for a major boost with nearly SR29 billion ($7.7 billion) in investments being directed toward the city of Wa’ad Al-Shamal.

Prince Faisal bin Abdulaziz, governor of the Northern Borders region, inaugurated a series of industrial, developmental, and hospitality projects aimed at solidifying the city’s role as a major hub for the Kingdom’s mining industry.

A major highlight of the announcement was the launch of Ma’aden’s Phosphate 3 project, backed by the Shareek program and an investment of SR28 billion.

This initiative is set to increase Saudi Arabia’s phosphate production capacity to 9 million tonnes annually, building upon the existing Phosphate 1 and Phosphate 2 projects, each producing 3 million tonnes. This expansion is expected to bolster the country’s industrial supply chain, generate new investment opportunities, and create employment within the sector.

The governor emphasized that these projects align with Saudi Vision 2030, which aims to expand the mining sector’s contribution to the national economy.

He highlighted that Wa’ad Al-Shamal has transformed into a model for integrated industrial cities, combining major industries, logistics services, and modern residential communities, which enhance its appeal to both local and international investors.

The event was attended by Minister of Industry and Mineral Resources Bandar Alkhorayef, Deputy Minister for Mining Affairs Khalid Al-Mudaifer, and other key officials from both the public and private sectors.

Additionally, the Saudi Authority for Industrial Cities and Technology Zones launched several new industrial, logistical, and service projects, with investments exceeding SR550 million. These projects include infrastructure development in the industrial zone, which spans 4.3 million sq. meters. As part of this initiative, 32 ready-built units have been established, consisting of 20 pre-built factories and 12 support units covering a combined area of 45,000 sq. meters.

Further key developments include a 132 kilovolt, 200 megavolt-amperes power substation, overhead transmission lines, and a 7-km bridge connecting the industrial zone to the international highway. These projects aim to improve logistics and energy reliability, creating an attractive environment for investments, particularly in the phosphate industry.

In addition, the governor inaugurated the expansion of Ma’aden’s residential city in Wa’ad Al-Shamal, adding 96 new residential units. This brings the total number of housing units to 579, supporting industrial and mining sector employees and their families.

To complement the region's infrastructure improvements, the Movenpick Wa’ad Al-Shamal Hotel, developed with an investment exceeding SR500 million, was officially opened. The five-star hotel is designed to cater to the growing accommodation demand from workers, investors, and visitors to the industrial city and Northern Borders region, further enhancing Wa’ad Al-Shamal’s position as an integrated industrial and investment hub.

As part of broader efforts to advance the mining sector, Alkhorayef, along with the deputy minister for mining affairs and other officials, visited several industrial and developmental projects in Wa’ad Al-Shamal and the Northern Borders region.

The tour included a visit to the Scientific Excellence School in Arar, where the minister reviewed modern training laboratories and met with students and faculty. Established through a partnership between Ma’aden and the Ministry of Education with an investment of approximately SR180 million, the initiative seeks to promote scientific education and develop expertise in STEM fields.

The minister also toured the Saudi Technical Institute for Mining in Arar, which has trained over 1,081 students, including 52 female graduates, in a range of specializations such as underground and surface mining, mining operations, and mechanical and electrical maintenance. Equipped with advanced mining simulation and training facilities, the institute plays a pivotal role in workforce localization and preparing Saudi talent for the mining industry.

The tour also included a visit to the Hazm Al-Jalamid mine, one of the Kingdom’s key phosphate mining sites, producing more than 11 million tonnes of phosphate ore annually.

The Northern Borders region is home to extensive mineral resources valued at approximately SR4.669 trillion.

It is a major source of phosphate, a critical element in global food security due to its role in agricultural fertilizer production. The region also contains high-quality deposits of coal, dolomite, limestone, and silica sand. It currently holds five phosphate ore reserve sites and 29 active mining licenses, including 15 for building materials and 14 for mineral extraction.