How should I structure a private equity investment into a Saudi target to minimize exit risk while meeting CMA, ICV, and Shariah compliance requirements?

We would need more information to address your question. For example, you ask about foreign participation limits. Do you already have a foreign investment partner in mind? Will you be investing your own capital or will you be acting as the “go between” for the foreign investor and the local investment target?

Will the foreign investor require director-level management powers during the period of investment?

I would be happy to have a confidential conversation to discuss further and to see how we may be able to help you.

Jason Huf

Private equity investments are commonly structured either through an onshore Saudi SPV or an offshore fund with a Saudi feeder, depending on investor mix and tax considerations. Foreign participation is generally permitted but may be restricted in regulated or strategic sectors and requires MISA licensing for non-Saudi investors, while CMA approval is needed if you establish or market a fund, raise capital from third parties, or manage the investment as a regulated activity. Exit pathways typically include trade sales, secondary buyouts, IPOs on Tadawul or Nomu, or shareholder buy-back arrangements. To ensure ICV compliance, the target should demonstrate local content, Saudi employment, and local supply-chain spend, which increasingly affects government and semi-government contracts. For Shariah alignment, structures usually avoid interest-bearing instruments, use profit-sharing or asset-backed arrangements, and obtain ongoing Shariah board oversight rather than a one-off opinion.