ع
A market that has tightened its spending
The scale of the opportunity has not disappeared. Saudi Arabia remains the largest consulting market in the Gulf; according to Source Global Research, it expanded by 14.1 per cent to USD 4.3 billion in revenue in 2024. Alongside that growth, the same analysis identified a shift in client behaviour: as the market matures, organisations in the Gulf are becoming more financially disciplined in their consulting spend, setting budgets and adhering closely to them to ensure maximum value for money. The era in which securing work was close to automatic, the research noted, has given way to one in which firms must clearly demonstrate the return on each engagement.
A similar emphasis runs through the strategy set at the top of the transformation. When the Public Investment Fund approved its 2026–2030 strategy in early 2026, it framed the coming phase as a move from rapid growth and acceleration toward sustained value creation, with a strengthened focus on the efficiency of investments and the highest standards of governance. Analysts reading that language took it as a signal to the Kingdom’s suppliers as much as its institutions: spending would be measured against demonstrable outcomes.
Localisation becomes a condition of entry
Alongside the pressure on value has come a structural change in who is even eligible to compete. Under the Regional Headquarters mandate, which took effect on 1 January 2024, foreign firms without a regional headquarters inside the Kingdom became ineligible to bid for government contracts valued above SAR 1 million, roughly USD 266,000. The rule applied across government entities, including the Public Investment Fund and its subsidiaries, and across sectors from construction to consulting.
Adoption was rapid. By early 2026, more than 700 multinational companies had established regional headquarters in Riyadh, surpassing the programme’s own targets. In early 2026 the Kingdom refined the rule, introducing a structured exemption process that allows government entities to contract with non-headquartered firms under defined competitive and technical conditions. Observers characterised the refinement not as a retreat but as a maturing of the regime: localisation remained the default, with calibrated flexibility where specialised expertise demanded it. In either form, analysts noted, the implication for advisory firms was consistent. A durable local presence, senior decision-makers based in the Kingdom, and integration into the domestic economy had moved from advantage toward expectation.
The PwC suspension: what it was, and what it was not
The clearest illustration of the new environment came in February 2025, when the Public Investment Fund barred PwC, one of the largest advisory firms in the region, from new consulting and advisory contracts across the fund and its more than 100 subsidiaries. Audit work was unaffected. The consequences were severe: PwC cut roughly 60 partners and 1,500 staff across its Middle East operations, in what had been its fastest-growing market.
It is important to be precise about what the episode was. Reporting by the Financial Times and others traced the ban to a specific dispute, an attempt by PwC to recruit a senior internal-audit executive from NEOM, a company controlled by the fund, which the fund regarded as a breach of trust. PwC told its own staff the matter was client-related rather than regulatory. The ban was lifted in January 2026, and the firm was invited to pitch for work again. The PwC case was not, therefore, a regulatory crackdown on the consulting sector. But analysts read it as a marker of the same underlying shift: in the current market, even the largest and most established firms can lose access to a major client quickly, and relationships once taken for granted now have to be actively maintained.
What observers say the shift requires of firms
Industry observers describe these forces as changing the market’s terms rather than its size: clients seeking measurable value, regulators requiring local anchoring, and incumbency offering less protection than before. On this reading, the firms best placed to compete are those built for the environment from the outset, locally rooted rather than flown in, oriented toward delivery and demonstrable outcomes rather than strategy alone, and focused on leaving durable capability inside the institutions they serve.
It is into this reshaped market that firms such as Capella, a Riyadh-based consulting and research firm, position themselves. The firm describes its model as combining a substantial research capability with what it terms disciplined delivery: governance frameworks, benefits-realisation tracking, and value measurement intended to link advisory work to financial outcomes. Whether any individual firm meets the moment is a question for its clients. What the market data and the events of the past two years establish is narrower but clear: the terms on which Saudi Arabia buys advice have shifted, and firms are increasingly asked to demonstrate their worth on each engagement rather than assume it.
