Construction & Real Estate Accounting & Tax in Saudi Arabia

Our services are designed for all players in the Saudi construction and real estate value chain:

• General Contractors & Subcontractors: Local and international firms working on Vision 2030 projects that need robust project cost control and cash flow management.
• Real Estate Developers: Companies developing residential, commercial, or hospitality projects who must comply with REGA's off-plan sales rules and manage project financing.
• Engineering & Architectural Consultants: Firms providing design and supervision services that need to manage project-based billing and withholding tax on payments to foreign experts.
• Foreign Investors: International companies that have obtained a MISA license to invest in and develop real estate in the Kingdom.

From the moment you bid on your first project, specialized construction accounting is essential. It becomes non-negotiable at these stages:

• During the Bidding Process: To accurately estimate project costs and prepare a competitive, profitable bid.
• Upon Winning a Contract: To set up a detailed project budget, chart of accounts, and system for tracking all costs, including labor, materials, and subcontractor fees.
• When Dealing with Subcontractors: You must manage contracts, verify invoices, and correctly apply withholding tax on payments to foreign subcontractors.
• When Invoicing the Client: All invoices must be ZATCA-compliant e-invoices, and revenue must be recognized based on project completion milestones (percentage-of-completion method).
• During a Project Audit: Major clients, especially government-related ones, will conduct audits. Clean, transparent, and detailed project accounts are essential for passing these audits and getting paid.

The cost of professional project accounting reflects the high complexity and critical importance of financial control in construction.

• Small to Medium Projects: SAR 15,000 - SAR 40,000 per month. This covers project bookkeeping, cost tracking, subcontractor payment management, and monthly progress reporting.
• Large-Scale or Giga-Projects: Custom pricing starting from SAR 40,000+, involving a dedicated on-site or remote team, advanced project management software integration, and full-scope virtual CFO support.

The construction sector in KSA is fraught with high-stakes financial and regulatory risks:

• Project Cost Overruns: Without tight financial control, projects can easily go over budget, wiping out profitability.
• ZATCA Violations: Incorrectly handling VAT on construction contracts or failing to apply withholding tax on subcontractor payments can lead to massive penalties.
• REGA Non-Compliance: For developers, failing to adhere to off-plan sales regulations and escrow account rules can result in fines and license suspension.
• Contractual Disputes: Inaccurate cost records can weaken your position in disputes with clients or subcontractors over payments and variations.

Construction accounting is a highly specialized field. Most general accountants lack the expertise in project cost management, percentage-of-completion revenue recognition, and the specific tax rules for the construction industry in Saudi Arabia. Hiring a full-time project finance team is a major undertaking.

Outsourcing to YourLegal's construction finance partners provides immediate access to a team that understands the Saudi market. We implement robust project accounting systems that give you real-time visibility into the financial health of every project. We manage your ZATCA compliance, handle complex subcontractor payments, and prepare the detailed reports that project owners and financiers demand. By providing this critical financial backbone, we allow you to focus on what you do best: building the future of Saudi Arabia.