(Bloomberg) -- Lazard Inc. became the latest Wall Street firm to comply with Saudi Arabia’s rules for foreign firms to set up their Middle Eastern base in the kingdom, months after larger rival Goldman Sachs Group Inc. secured a similar license.
The New York-based firm has received a so-called regional headquarters license from the Saudi Ministry of Investment, according to people familiar with the matter, who asked not to be identified as the information is private.
A Lazard spokesperson declined to comment.
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The move is the latest sign that Wall Street banks are heeding the Saudi government’s warning that it would stop working with firms unless they established a regional HQ in the country.
Goldman Sachs became the first major financial institution to get the license in May, while Tokyo-headquartered Mizuho Financial Group Inc. followed suit in June, Bloomberg News reported earlier.
The Mideast has become a hotspot for investment bankers, driven by sovereign wealth fund deals and a booming market for new share sales. Lazard was financial adviser to ADES Holding Co. on its listing, the country’s largest IPO last year, and has been building up a team of bankers based in Riyadh.
It hired Wassim Al-Khatib as chief executive officer of its advisory business for Middle East and North Africa in January 2023. That appointment came months after the firm named Saudi stock exchange chairperson Sarah Al-Suhaimi as the chair of the unit.
Competitors including Rothschild & Co. and Moelis & Co. have also opened offices in Riyadh to tap into one of the region’s busiest markets, though they haven’t yet secured HQ licenses.
Saudi Arabia announced new regulations for state contracts in 2021, saying it wanted to limit “economic leakage” — a term used by the government for state spending that can benefit firms that don’t have a substantial presence in the country.
Under the rules that came into force this year, firms must have a regional base in Saudi Arabia with at least 15 employees, including executives overseeing other countries or risk losing business with the kingdom’s vast network of government entities.
--With assistance from Nicolas Parasie.
(Updates with context on Mideast deals in 6th paragraph)
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