Foreign Law Firms Draft Regulation

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Article 1

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The following words and phrases shall have the meanings as indicated unless the context requires otherwise:

‐ The Code: The Code of Law Practice.

‐ The Regulation: The Foreign Law Firms Regulation.

‐ The Minister: The Minister of Justice.

‐ The Ministry: The Ministry of Justice.

‐ The Association or (SBA): The Saudi Bar Association.

‐ The Competent Department: The competent department at the Ministry.

‐ The Registry: The registry of foreign law firms licensed to practice law in the Kingdom, as stipulated in Article (49) of the Code.

‐ The Firm: A foreign law firm licensed to practice the law profession in the Kingdom under the Law.

‐ Non-Saudi Counselor: A counselor registered in the registry of Non-Saudi Sharia or legal counselors, as stipulated in Article (41) of the Regulations.

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Article 2

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A firm must meet the following criteria to be licensed:

1- The firm has not been involved in any offenses prejudicial to honor and integrity, nor has any final decision been issued against it regarding gross professional violations in any country where it practices the law profession.

2- The firm has a distinguished reputation for providing professional services in the legal fields that the Kingdom needs.

3- In the countries and regions where the firm have representation and partnerships as provided in Article (45) of the Code, the following criteria shall be met:

a) The firm must have a legal presence in the countries and regions that authorize it to practice the law profession.

b) The firm has an office in the countries and regions, where there are no less than three (3) employees practicing work of a legal nature.

c) The countries and regions must be economically advanced according to relevant, recognized international indicators and standards.

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Article 3

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For the purposes of calculating the years of experience required for licensing a firm in the case of a merger or acquisition, the number of years since the founding of the oldest firm shall be considered.

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Article 4

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As stipulated in paragraph (4) of Article (45) of the Code, the two partners who represent the firm in the Kingdom must meet the following requirements:

1- They are licensed to practice law in accordance to the provisions of the Code or any other foreign law governing the law practice.

2- They have no less than seven (7) years of practical experience, of which at least three (3) years after obtaining a law license.

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Article 5

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1-The term of residence of the two partners who represent the firm in the Kingdom shall be calculated according to the Gregorian calendar.

2-If a partner is unable to reside in the Kingdom or is desired to be replaced, the firm must nominate a replacement partner to whom the same procedures and conditions stipulated in the Code and Regulation shall apply, provided that this does not affect the partners' compliance with the residence term in the Kingdom except for an acceptable reason to the Ministry.

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Article 6

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The license application shall be submitted electronically in accordance with the approved procedures, and must be accompanied with the following:

1- Authorization for the firm’s legal representative to apply for a license to practice law in the Kingdom.

2- Licensing documents for the firm’s head office and other branches.

3- The two partners’ legal licenses and proof of their partnership and previous experience.

4- A statement that the firm has not been found by any final judgment or decision to have committed offenses prejudicial to honor and integrity nor gross professional violations.

5- Proof of meeting the conditions stipulated in the Code and Regulation .

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Article 7

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The Registry shall contain the following information:

1- Name of the foreign law firm, license, and contact details.

2- The legal form in which the firm has taken to practice law, basic information of partners – if any – and their contact details.

3- License number, date, and expiry date.

4- The firm address.

5- Any other information as determined by the Competent Department.

The firm shall notify the Competent Department of any change to its information within fifteen (15) days of the date of the change.

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Article 8

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1- The firm may not practice law prior to completion of the licenses and requirements for taking a legal form and practicing law in the Kingdom, including: obtaining an investment license, registering with (SBA), paying the prescribed license fees, establishing an office for the practice, procuring tax certificates, and any conditions required by other laws.

2- If the firm fails to complete the licenses and requirements necessary for practicing law within (180) days of obtaining its license, the license shall be revoked. This deadline may be extended for a similar period for a reason accepted by the Lawyers Registration and Admission Committee as provided in Article (5) of the Code.

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Article 9

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An application to renew the license shall be submitted at least ninety (90) days prior to the expiry date. The renewal and reissuance application shall be submitted in accordance with the provisions and procedures governing the initial issuance of the license, and with the information and reports required by the Competent Department.

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Article 10

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If the firm takes the form of a professional company with a registered Saudi practicing lawyer, the company must comply with the following:

1- The Saudi partners, or one of them, shall have no less than three (3) years of experience practicing law.

2- The Saudi partners representation shall be no less than one-quarter of the votes on the board of directors or the board of administrators, as the case may be.

3- Pleading and counsel on Saudi law shall be conducted by a licensed lawyer authorized to practice law in the Kingdom.

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Article 11

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1- A firm which has not taken the form of a professional company with a Saudi partner may not conduct or participate in any work related to Saudi law except providing counsel for a specific or specialized projects with the approval of the Competent Department.

2- Counsel for a specific or specialized projects must be needed in the Kingdom, and for which sufficient expertise is unavailable in the Kingdom.

3- A request for approval to provide counsel for a specific or specialized projects shall be submitted electronically and shall be accompanied with an award letter or a letter from the project owner requesting to enter into contract with the firm, along with proof that the criteria for a specific or specialized projects referred to in paragraph (2) of this article have been met.

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Article 12

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In order for a firm to fulfill its obligations under Article (52) of the Code, it shall abide by the following:

1- The number of Saudis practicing work of a legal nature at the firm shall be no less than the localization quotas specified for Saudi law firms and professional companies under the relevant laws and decisions.

2- The firm shall develop an annual work plan for knowledge transfer and training, the plan shall obligate the firm to a minimum of:

a) Twenty (20) hours of provided training annually to all Saudi employees at the firm practicing work of a legal nature.

b) Adopting a mechanism for secondment of Saudi employees to the firm’s head office or its branches.

c) Implementing a program preparation for the promotion of Saudi employees on technical and administrative tracks.

d) Implementing a program to train university students and recent graduates in legal work.

e) Participating in holding or sponsoring professional events, conferences, and seminars, in the Kingdom.

f) Publishing specialized scholarly papers and articles in Arabic, or on Saudi law in other languages.

3- Saudi employees shall have actual involvement in all units and departments of the firm and its major projects.

4- Legal counsel work transferred to an office outside the Kingdom shall not exceed 30% of the firm’s advisory work. For the purposes of calculating this percentage, the following shall be taken into account:

a) Any work assigned to a person not residing in the Kingdom is considered to be work transferred to an office outside the Kingdom.

b) The transferred work shall be calculated on the basis of fees and costs as a percentage of the firm’s overall work.

c) Advisory work related to non-Saudi law regarding a service outside the kingdom shall not be count.

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Article 13

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The firm shall provide the Competent Department with approved financial statements, and it shall submit an annual report of its compliance with the knowledge transfer and training plan, as well as any information or reports required by the Competent Department to verify the firm's compliance with its statutory obligations.

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Article 14

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A temporary license shall be granted only for the provision of counsel for specific or specialized projects needed by the Kingdom where sufficient expertise is unavailable in the Kingdom. Such temporary license shall be granted at the discretion of the Ministry, observing the following provisions and procedures:

1- A foreign law firm shall not be granted more than one temporary license per year, unless for an exceptional need with the Minister’s approval.

2- An application for a temporary license shall be submitted to the Ministry electronically in accordance with the approved forms and procedures. The standard licensing conditions must be met, with the exception of the residency conditions and the conditions and requirements related to the legal form for practicing law in the Kingdom.

3- The application for a temporary license shall be submitted with a letter from the project owner requesting to enter into contract with the firm and proof that the project is a specific or specialized project.

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Article 15

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A temporarily licensed firm shall abide by the following:

1- The firm and its personnel working on the project shall abide by the professional code of conduct for lawyers; the professional ethics contained in the Code, its implementing regulation, and relevant laws; and any professional regulations in the country in which the firm is licensed to practice law which do not conflict with the said Saudi rules and provisions.

2- The firm shall not provide any service outside the scope of the license granted to it.

3- The work assigned to Saudis shall not be less than 10% of the project work of a legal nature. This percentage may be achieved by contracting with a Saudi lawyer or a Saudi professional company.

4- The firm shall submit a report to the Competent Department at the end of the project indicating the services actually provided, the effects of such services, and any other information as determined by the Competent Department.

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Article 16

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1- A person or firm licensed to practice law in the Kingdom is not permitted to seek assistance by a non-Saudi lawyer regarding law practice unless the latter has been registered in the registry of Non-Saudi Sharia or legal counselors.

2- If an application for registration meets the requirements for registration on the registry of practicing lawyers, except for the nationality requirement, the controls and criteria for registration on the registry of practicing lawyers as stipulated in the Code and its implementing regulation shall apply.

3- If an application for registration was based by an applicant licensed to practice the profession under another law, the licensing and qualification criteria in the country of the license must be no less than those required to practice law in the Kingdom.

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Article 17

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1- A non-Saudi counselor’s application for registration in the registry of Non-Saudi counselors shall be submitted to the Ministry electronically in accordance with the approved forms and procedures. The application must be accompanied with a contract of employment for the licensee and proof of meeting the registration conditions.

2- The registry of Non-Saudi counselors shall include: The counselor’s name, nationality, contact details, the licensee with which the counselor works, the licensee’s contact details, and any other information determined by the Competent Department.

3- The non-Saudi counselor must notify the Competent Department of any change to his or her information within fifteen (15) days of the date of the change.

4- The licensee must notify the Competent Department at the end of the contractual relationship with the non-Saudi consultant within fifteen (15) days of the end date of the contractual relationship.

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Article 18

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A non-Saudi counselor’s name shall be removed from the registry of Non-Saudi counselors in the following circumstances:

1- The end of the contractual relationship between the non-Saudi counselor and the licensee with no submission of a new employment contract by the non-Saudi counselor with another licensee within thirty (30) days of the end date of the contractual relationship.

2- The Competent Department decides to delete the counselor’s name on the basis that the counselor violated the Code, its implementing regulation, this Regulation, or codes of professional conduct.

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Article 19

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Disciplinary Actions shall be applicable to the firm’s offenses according to the provisions and procedures stipulated in the Code, its implementing regulation, and the rules of control and filing and reviewing disciplinary proceedings, all dependent on the nature of the license granted to it.

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Article 20

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Following the Minister’s approval, the Competent Department shall issue the procedural guides and forms necessary for the enforcement of the Code and this Regulation.

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Article 21

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This Regulation shall be published in the Official Gazette and shall be effective from the date of its publication.

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Last update: 04 April 2022