The invention discloses a method for preparing a phosphorus-nitrogen compound-clad magnesium hydroxide composite flame retardant. The method comprises the following steps: reacting a proper amount of ammonia-enriched magnesium chloride with diluted phosphoric acid in magnesium hydroxide suspension at normal temperature and normal pressure to generate ammonia magnesium phosphate; and depositing the ammonia magnesium phosphate with low solubility on the surface of magnesium hydroxide particles to prepare the composite flame retardant, wherein the ammonia-enriched magnesium chloride is a side product generated in the process of preparing silane by a magnesium silicide method in the semiconductor industry; the molar ratio of the ammonia-enriched magnesium chloride to the phosphoric acid is 1 to 1; and the magnesium hydroxide is a commercial product with intermediate diameter of primary particles of 2 mu. In the phosphorus-nitrogen inorganic compound-clad magnesium hydroxide, the dispersion property of the magnesium hydroxide is improved, the defects of moisture absorption, agglomeration and blooming of the magnesium hydroxide are reduced, and the flame retardant effect is improved. Meanwhile, the method opens up a new approach for recycle of industrial side products.