The onshore interfaces · room 03 of 09
Saudi Arabia, holding into.
Between a vehicle seated in a centre and an asset in the Kingdom sits at least one Saudi entity, and three laws decide what it may be: the Investment Law that registers it, the Companies Law that shapes it, and for land, the law that since January 2026 lets a non-Saudi company or fund hold title in named areas.
Read from Royal Decrees M/19 of 1446H, M/132 of 1443H and M/14 of 1447H, and the Real Estate General Authority's published guidance, as at August 2026.
Where complexity arises · The onshore interfaces · nine rooms
01 · The ground
Registration in place of a licence
The Kingdom no longer asks a foreign holder for permission to exist. It asks what the holder does.
The Investment Law issued by Royal Decree M/19 of 1446H on 22 July 2024 replaced the Foreign Investment Law of 2000 and came into force in February 2025. It treats domestic and foreign investors under one principle and one register, and the structural consequence is that the foreign-owned holding entity stops being an exception that has to be licensed into existence.
Freedom of investment for domestic and foreign investors alike, subject to the activities the law excludes. The foreign-ownership licence that every chain used to carry as its first gate is replaced by registration with the Ministry of Investment on published criteria. A registration is an act the investor performs; a licence was a discretion the Ministry exercised. The difference is a month on the sequence and a line of risk off the chart.
A list published by a ministerial committee names the activities in which foreign investment is excluded or restricted. The list is read against the activity the asset carries on, not against the fund that holds it: a vehicle is not excluded, an activity is. A platform that holds one asset in an excluded activity and four outside it has a chain with one different leg.
The law states the rights of a registered investor and provides for appeal against the Ministry's decisions to a competent court within thirty days. Penalties for non-serious breaches run to SAR 300,000 and to cancellation of the registration; serious breaches are left to the implementing regulations. Cancellation is the structural risk, because a holding entity whose registration is cancelled still owns the asset and has lost the right to be what it is.
Registration precedes incorporation of the local entity, which precedes the acquisition, which precedes the first distribution up the chain. The Law put the first of those steps on the investor's own calendar rather than the Ministry's. The sequence still has four steps; the first is now a date the manager chooses.
The question the 2000 law asked was whether you may. The question the 2024 law asks is what you will do once you have.
02 · The holder onshore
The Companies Law of 1443H
The local holder's form decides what the constitution above it can promise. Since 2023 the Kingdom offers three.
Royal Decree M/132 of 1443H, issued on 30 June 2022 and in force with its regulations from 19 January 2023, rewrote the forms a Saudi entity may take. For a holding chain the question is narrow: which form lets the mechanics written into the fund's constitution actually operate at the asset.
The working form for a single-asset holder. The law removed the cap of fifty partners, removed the obligation to set aside a tenth of profit each year as a statutory reserve, and lets an LLC issue negotiable debt instruments or sukuk with its partners' consent and within the capital market rules. A holding company that can issue an instrument to its own lender is a different holding company from one that cannot, and that change sits in the financing room as much as here.
The form a listing will eventually require and the form a co-investment with Saudi institutions usually takes. Article 108 admits classes of shares: ordinary, preferred and redeemable, with every share in a class carrying the same rights within limits the bylaws set. A waterfall written at the fund can now be mirrored one level down, which it could not be under the 2015 law.
New in the 2022 law: no minimum capital, one or more founders, several classes of shares, management by one or more managers or a board as the founders choose. It is the form drawn for a venture or growth holder where governance is settled by agreement rather than by statute, and its flexibility is the reason it needs the most careful constitution of the three.
The law states that shareholder agreements are binding, and Article 113 permits the articles of a joint stock company to carry a drag-along at ninety per cent and a tag-along for the minority, with equivalent provisions for partners in an LLC. Before 2023 those mechanics lived in a contract the registry could not see; now they may live in the articles the registry holds. Where the exit test of the fund depends on dragging a Saudi co-investor, the clause belongs in the articles, because that is where it binds a buyer.
The holder is drawn with its form and its share classes, and the fund's constitution is read against them: every preference, every redemption right and every drag at the fund level has to find a counterpart at the holder or it stops at the border. The 2022 law made the counterpart available. It did not write it in.
A mechanic that exists at the fund and not at the holder is a promise made to investors that the asset cannot keep.
03 · Land, since January 2026
Royal Decree M/14 of 1447H
A non-Saudi company or fund may hold Saudi land in named areas. The area, the right and the levy are each fixed by an instrument.
The Law of Real Estate Ownership by Non-Saudis, approved by Royal Decree M/14 on 14 July 2025 and in force 180 days after its publication, in January 2026, repealed the 2000 law by its fourteenth article and replaced a regime of case-by-case approval with a statutory right exercised inside a published geographic scope.
Non-Saudi natural persons, resident or not; non-Saudi companies, whether or not they have a branch in the Kingdom; non-Saudi non-profit entities; Saudi companies with non-Saudi shareholders; and special-purpose vehicles, funds and entities with non-Saudi holders. A fund seated in a centre is therefore a permitted holder in its own name, and a Saudi LLC with a foreign parent is a permitted holder in its. The chain can be one leg shorter than it had to be.
Ownership, and other rights in rem such as usufruct and easement, in the areas the geographic scope document designates. The document, approved by the Council of Ministers and published by the Real Estate General Authority, fixes the areas, the maximum share of ownership within each and the maximum term of a usufruct. Riyadh and Jeddah are open within specific areas. A structure is sized to the area the asset sits in, read from the document and not from the city.
Restricted to Muslim individuals and to Saudi companies with non-Saudi shareholders, within specified areas. A foreign fund does not hold there directly; it holds through a Saudi company, and the Capital Market Authority separately permits foreign investors to hold up to forty-nine per cent of a listed company that owns property in the two cities, since 27 January 2025.
The property must be registered in kind in the Real Estate Registry, unit by unit, with a title deed and sheet recording the owner, the rights, the restrictions and every later disposition. Registration is a condition of the right, so a transfer that closes before the registry records it has not closed. The registry's clock is on the sequence.
A disposition by a non-Saudi owner carries a total charge of ten per cent: the five per cent real estate transaction tax and an additional charge on non-Saudi disposition not exceeding five per cent. It is paid at the exit and priced at the entry, which is the only place a ten per cent friction on the asset can be absorbed.
General violations run from a warning to a financial penalty of up to five per cent of the value of the right, capped at SAR 10,000,000. Misleading information about ownership runs to SAR 10,000,000 and the sale of the property by public auction. The forced sale is the structural one: it is an exit the manager did not choose, at a time the manager did not choose.
The 2000 law asked permission for each parcel. The 2026 law publishes a map and a levy, and the structure is drawn on the map.
04 · The crossings
What the adviser reads
Every distribution crosses the border twice, and each crossing is read by the adviser in its own name.
A chain from a centre into the Kingdom carries two crossings on every distribution: out of the Saudi holder and into the vehicle above it. What each crossing costs is a tax position, and tax positions sit with the tax adviser. What the structure settles is where the crossings are and how many there are.
The Kingdom taxes the non-Saudi share of a resident entity's profit and levies zakat on the Saudi and Gulf share, under rules the Zakat, Tax and Customs Authority administers. A holder with mixed ownership is therefore two taxpayers in one entity, and the mix is a property of the cap table the fund controls.
Payments leaving the Kingdom to a non-resident carry withholding at rates that depend on the character of the payment and on any treaty the recipient can actually claim. Whether the vehicle above the holder can claim a treaty is tested on that vehicle, not on the fund, which is the reason the leg between the holder and the fund is drawn as a named entity in a named place.
Every additional entity between the asset and the fund is a crossing, and a chain built for a different reason acquires a cost it was not built to pay. The structure question is not what the rate is. It is how many times the rate is paid, and the answer is the length of the chain.
The rate, the treaty, the characterisation of each instrument in the chain and every ruling sought from the Authority are the tax adviser's, given in its own name. This room draws the crossings and counts them. It does not price them.
The chain is drawn once. The crossings are paid for as long as it stands.
05 · The binding constraints
Six, each attributed
Six constraints bind a structure holding into the Kingdom. Each is created by one instrument and moved by one party.
The list a structure paper carries for this interface, with the party who can move each item named beside it.
The Investment Law, Royal Decree M/19. Moved by the investor, which performs it; refused only where the activity is excluded.
The committee's published list under the Investment Law. Moved by the committee alone, and read per activity.
The Companies Law, Royal Decree M/132, Articles 108 and 113 among others. Moved by the founders at formation, at the cost of a conversion later.
The Council of Ministers' document under the Law of Real Estate Ownership by Non-Saudis. Moved by the Council alone. A parcel outside it is not held by a non-Saudi, whatever the chain.
The same law and the Real Estate Registry. Moved by nobody; the registry's date is the date.
The same law, with the real estate transaction tax beneath it. Moved by nobody on the transaction. It is priced at entry.
Four of the six are dates or lists the manager reads. Two are choices the manager makes once and lives with.
06 · Where it breaks
Failure points
Each of these was decided at the chain and found at the asset.
Six failures particular to a structure holding into the Kingdom. The stage at which each surfaces is the whole of its cost.
The chart said real estate; the asset carried on an activity on the excluded list through an operating subsidiary. Surfaces at registration, when the Ministry reads the activity and the chain has already been drawn around a holder that cannot be registered for it.
The fund's constitution promised a preferred return to one class; the Saudi holder was an LLC with one class of interest and a co-investor who took its share pro rata. Surfaces at the first distribution, when the preference cannot be paid at the level where the cash is.
The drag-along sat in a shareholders' agreement and not in the articles. Article 113 would have let it sit in the articles. Surfaces at exit, when the buyer's counsel reads the registry and finds a minority it cannot be made to drag.
An asset was underwritten for a foreign fund to hold directly, on the strength of the 2025 law, and the parcel sat outside the geographic scope document when it was published. Surfaces at the registry, which will not record the title.
The model carried the transaction tax and not the additional charge on non-Saudi disposition. Five per cent of the asset surfaced in the exit waterfall, in year seven.
The holder's registration with the Ministry was cancelled for a reporting breach nobody in the chain owned. Surfaces when the holder, still owning the asset, cannot lawfully carry on the activity it was formed for, and the fund discovers it has no party whose job that was.
Every one of the six was visible in the instruments at the structure paper. Each is instead found at the registry, the Ministry or the exit, by the party least able to absorb it.
07 · Where the work stops
The line
Your counsel signs the law. We design the structure that advice is set against, and stress-test it before the documents are drawn.
Three rows: what returns from a reading of this interface, what stays with the manager's own regulated, legal and tax advisers, and who takes the decision at the end of it.
The chain into the Kingdom drawn leg by leg: the registration, the holder and its form, the classes it carries, the parcel against the geographic scope, the registry date on the sequence and the levy priced at entry. Every mechanic in the fund's constitution tested for a counterpart at the holder. The crossings counted.
The registration and every filing with the Ministry; the constitution of the holder and its articles; the title work and the registry; every tax position, treaty claim and ruling, which sit with the tax adviser in its own name; and every opinion on the excluded activities.
The manager, on those opinions, with the form of the holder settled before the acquisition agreement names it.
The long reading of the Kingdom runs room by room: marketing in, this one on holding into, then security in, and exit from. What is on this page is the interface as it binds a foreign vehicle, read from the instruments and stated at their date.
Nothing on this page is advice, and nothing here invites any investment. It is our reading of published instruments, stated as at its date, and your counsel signs the law.
Read at the Investment Law, Royal Decree M/19 of 1446H; the Companies Law, Royal Decree M/132 of 1443H, Articles 108 and 113; the Law of Real Estate Ownership by Non-Saudis, Royal Decree M/14 of 1447H, and the Real Estate General Authority's guidance on it · stated as at August 2026
Where complexity arises · 13 minute readSaudi Arabia, exit fromThe four ways out of a Saudi asset and what each needs to have been true at entry: a buyer the Investment Law will register, a listing the market will admit since foreign access opened in February 2026, a transfer of fund units the offering rules still govern, and a distribution in kind the real-estate law and its levy reach.
Where complexity arises · 13 minute readQatar, holding and exitHow a structure holds a Qatari asset and leaves it: the 2019 law that opened most sectors to full foreign ownership, the Centre as a holding seat with its own court and its own registry, land in the designated areas of 2020, and the exit routes each of them permits.
Where complexity arises · 10 minute readThe onshore interfacesWhere the investor or the asset sits onshore in the Gulf, the structure crosses a different kind of border: Saudi Arabia, Qatar and Kuwait read as interfaces, four questions each, from their own instruments and dated.
What this room is attached to
- The structure it binds Structures · holding chains
- The failure it produces Where structures break
- Where the seat is settled How we work · stage three, design