Legal Market Overview
As the most heavily populated, the most resource-rich and, generally, the most powerful Gulf monarchy, Saudi Arabia is considered by international investors to be an extremely lucrative market, the opportunities in which are even more attractive given the nation’s apparent immunity to the kind of serious instability that plagues some of its neighbours. The Saudi Vision 2030 project, which aims to decrease the nation’s dependence on oil and diversify the energy-based economy, has been the primary driver of recent international investment and large-scale commercial activity. As part of the Crown Prince’s flagship proposal, new regulatory frameworks have been introduced that will transform Saudi Arabia’s insolvency and restructuring laws, and encourage public-private partnerships to develop the nation’s education, healthcare and infrastructure services.
Despite the drive for economic diversification, the energy sector is still an indispensable aspect of Saudi Arabia’s economy. International investors have awaited Saudi Armco’s IPO with bated breath; however, the Saudi government has decided to reschedule the proposed listing, and at the time of writing it remains unclear whether the IPO will take place at all. Law firms operating in Saudi Arabia tend to have established expertise in construction law, energy and infrastructure project development, and project finance. Even those firms that primarily service international investors often find their work revolving around energy and utility assets, or energy project developments, though the country’s real estate sector has also been a source of international and regional interest.
Given the tremendous importance of the Saudi market to international clients, many international law firms operate in the kingdom, though Saudi regulations prohibit full foreign ownership of businesses and thus international law firms tend to operate through associations with local law firms. Many law firms also service the Saudi market from neighbouring Gulf countries, as the Saudi economy is closely intertwined with the economies of other regional monarchies.