Project Consultancy Agreement Template for Saudi Arabia

A Project Consultancy Agreement is a legally binding contract that defines the relationship between a consultant and client for specific project-based professional services in Saudi Arabia. This document establishes clear expectations, responsibilities, and terms while ensuring compliance with Saudi commercial law and regulatory requirements. Whether you're engaging local expertise or working with international consultants, this agreement protects your interests and ensures professional service delivery within the Kingdom's legal framework.

When do you need this document?

You need a Project Consultancy Agreement whenever your business requires specialized expertise for specific projects in Saudi Arabia. This includes engaging consultants for Vision 2030 initiatives, infrastructure development, regulatory compliance, technology implementation, or strategic planning. The agreement becomes essential when working with foreign consultants who require local sponsorship, when government authorities are involved in regulated sectors, or when parent company guarantees are needed. You'll also need this document for professional services requiring specific qualifications under Saudi Professional Companies Law, or when consultancy fees exceed certain thresholds requiring formal documentation.

Key legal considerations

Your agreement must clearly define the consultant's status to avoid misclassification under Saudi Labor Law, as this affects tax obligations and employment rights. Include comprehensive scope of services clauses to prevent disputes over deliverables and ensure Sharia-compliant payment terms. Address intellectual property ownership, particularly for innovations or proprietary methods developed during the project. Consider liability limitations and professional indemnity requirements, especially for regulated sectors like engineering or healthcare. Include termination clauses that protect both parties while ensuring project continuity, and specify dispute resolution mechanisms that comply with Saudi commercial arbitration laws.

Legal requirements in Saudi Arabia

Under Saudi Commercial Law (Royal Decree No. M/1), your agreement must be in writing for enforceability and include all material terms. Foreign consultants must comply with Foreign Investment Law requirements and obtain necessary licenses through local sponsors where applicable. Professional service providers must meet qualifications under the Professional Companies Law and maintain appropriate registrations with relevant authorities. Government-related projects require compliance with the Government Tenders and Procurement Law, including specific documentation and approval processes. The agreement must respect Islamic principles in structuring payment terms and avoid prohibited contractual elements. Additionally, ensure compliance with sector-specific regulations from authorities like CITC, SAMA, or the Ministry of Health depending on your project's nature.