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ARTICLE · 05 JUNE 2024

How Saudi Arabia Updated Contract Rules To Handle Its Building Boom

Mayer Brown
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Saudi Arabia's new Civil Transactions Law entered into force on 16 December 2023.

Saudi ArabiaReal Estate and Construction
Raid Abu-Manneh
Raid Abu-Manneh
Andrew Sarraf
Andrew Sarraf
Ali Auda
Ali Auda
Kiran Giblin
Kiran Giblin
Cameron McPheely
Cameron McPheely
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Saudi Arabia's new Civil Transactions Law entered into force on 16 December 2023. It's a cornerstone of the Kingdom's broader Vision 2030 initiative, which aims to invigorate the economy by encouraging foreign investment and modernising the Kingdom's legal framework.

The law affects contracts generally in the Kingdom, but construction is particularly suited to take advantage of it.

Construction is booming there with "giga-projects" like Neom, the vast Red Sea tourism developments, the New Murabba projects, and more.

Industry output is expected to grow annually at a rate of 4% between 2024 and 2026.

The Civil Transactions Law, comprised of its 721 Articles and underlying Sharia law maxims, includes various provisions which expressly provide for muqawala (construction) contracts.

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