KPMG, the leading provider of audit, tax and advisory services in Saudi Arabia, announced that it had obtained official approval from the Saudi Ministry of Commerce to transition from a professional partnership to a closed joint stock company (JSC) in accordance with the new Professional Companies Law, which was approved by the Council of Saudi Ministers, and entered into effect on March 26th, 2020.
This transition will benefit KPMG and the profession in a number of ways. The strategic move will enable KPMG to expand its footprint across the Kingdom and in the regional markets, create new job opportunities for Saudis, strengthen the capabilities, and allow new stream of shareholding from investors which could be from other professions than the service lines.
Dr. Abdullah Bin Hamad Al Fozan, Chairman of KPMG Professional Services, said: “Since the issuance of the Executive Regulations of the new Professional Companies Law, we have started to work on the transition process. We are delighted to be the first professional services company in the Kingdom to transform from a partnership into a joint stock company. For us, the decision to transition is in line with our strategy for expansion in the Kingdom and allowing the entry of new partners and shareholders.”
The transition is a healthy process for all companies in general, professional ones in particular, as it supports professional companies to continue providing their services in an optimal manner, indicating that this is the best way to establish robust professional entities that contribute to supporting the national economy and create more sustainable job opportunities for citizens and develop their capabilities.
The new professional companies’ law paves way for the entry of new shareholders. This applies to all professions, not to a specific one. A professional joint stock company shall have a board of directors comprised of a number of the shareholders, provided, at least half of the board members are licensed shareholders, and includes at least one licensed member in each self-employed profession practiced by the professional company.
KPMG Professional Services is a member of the KPMG global network of member firms. Set up in Saudi Arabia in 1992, the company has around 1,400 employees and has offices in Riyadh, Jeddah, and Al Khobar.