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The Kingdom of Saudi Arabia is a western Asian Islamic country with an area of a little more than two million square kilometres and a population of 33 million people.

Saudi Arabia is hardly a new legal market – but even so there is a buzz of activity among international law firms in the largest Gulf state. They have the largest economy in the Middle East and are the only G-20 member country in the region. This is largely due to the economy of Saudi Arabia being heavily dependent on oil, with GDP growth closely connected to oil growth. The outbreak of COVID-19 has significantly impacted the demand for oil and with OPEC production cuts, IMF forecasts GDP growth to fall significantly, however there have been initiatives introduced by the government to change the direction of this outcome. 

From my conversations with Partners on the ground in the Kingdom, it is apparent that transactional activity is picking up and the flow of capital is in full swing. Last year was a difficult year for Saudi Corporate Lawyers due to the lack of confident in the market however things are now stabilizing.

Vision for 2030

When global oil prices collapsed in Summer 2014, Saudi Arabia confronted one of the most daunting economic challenges of its modern history. Upon ascending to the throne the following year, King Salman bin Abdulaziz Al Saud and his son Mohammed bin Salman Al Saud (now the crown prince) responded by developing an ambitious economic and social reform plan, Saudi Vision 2030, which was unveiled in 2016 and designed to reduce the country’s dependence on oil by facilitating the emergence of a robust private sector.

Saudi Arabia initially decided to evaluate the first four years of its economic transformation with benchmark goals in 2020. With unfortunate timing, the coronavirus pandemic and dramatic shock to oil prices (which occurred just as this publication was going to print) hit Saudi Arabia’s economy hard in 2020. The project the Saudi royals took on was never going to be easy, but plummeting oil prices, disruption of global trade and financial markets, a freeze on industries like tourism and a huge loss of productivity in the government and private sector spell an uncertain future for the Saudi plan. Even before the pandemic, the government’s detention of wealthy Saudi businessmen at the Ritz-Carlton in Riyadh, the murder of journalist Jamal Khashoggi in Istanbul and increasing tensions with Iran had diverted international attention from the economic reform effort and damaged Saudi Arabia’s international reputation.

However, it is perhaps clearer than ever that it remains in the interest of Saudi Arabia and the United States for the economic transformation to succeed. Four years after the Saudi reform program was unveiled, this blog seeks to take a comprehensive look at the state of the Vision 2030 effort: what were the objectives of its creators, what has happened so far, to what extent are reforms advancing these initial objectives that the Saudi government set for itself and what changes need to be enacted for reforms to succeed?

Prominent law firms and competition

English and US firms are hardly new to KSA. They have been advising clients in the Kingdom for decades from their bases in London and New York, or from elsewhere in the Middle East. Some firms are entering the market for the first time, some are returning and some are simply expanding their footprint.

Key Practice areas for Lawyers

Due to increased government spending, many of the large Saudi firms are being offered contracts to enable them to take care of their legal mandates.

For most international law firms, who have commonly established their foothold in Saudi through an association with a local firm, the prominent practice areas are corporate M&A, in-bound and outbound investments, capital markets, construction & infrastructure projects, energy (oil, gas and mining), banking & finance and real estate.

Recruitment needs

The new changes in regulations in Saudi are due to go live very soon and they will undoubtedly attract plenty of UK and US law firms looking for a piece of the pie. Embarking to secure a new position in a transactional field will be a good option for Lawyers. We are working with a number of strong law firms who are searching for Corporate and Finance Lawyers in either Jeddah or Riyadh.

If you are a law firm looking to recruit for an office in Saudi Arabia or a Lawyer looking to find out the options available to you in this jurisdiction contact Daniyal Aziz to discuss your needs with the help and support of a knowledgeable, committed Legal Recruitment Consultant.

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