Mergers and acquisitions in Saudi Arabia are open to foreign investors, but they are not a one-step process. A foreign buyer can acquire shares or assets in a private company, or pursue a listed target, provided the activity is open to foreign investment. Deals require MISA registration, Ministry of Commerce filings, GAC clearance where thresholds are met, and CMA approval for listed targets.
Introduction
A few years ago, buying into a Saudi company meant working around a foreign investment regime built for caution. That has shifted. Under Vision 2030, the Kingdom has rebuilt its corporate, investment and competition rules to attract exactly the kind of cross-border deals that were once difficult to close. For an international acquirer, the opportunity is real, but so is the regulatory map. Getting the structure and the approvals right at the outset is what separates a clean deal from a stalled one.
This guide walks through how M&A actually works in Saudi Arabia today: the governing laws, the choice between a share and an asset deal, the regulators whose sign-off you need, and the traps that catch foreign counsel who assume the process mirrors their home market.
Read also: Saudi Arabia’s FDI Reaches $280 Billion: What It Means for Foreign Investors in 2026
A quick definition for readers new to the market
In Saudi law, a merger or acquisition covers any transaction that transfers ownership or control of a business, whether through buying shares, buying assets, combining two companies into one, or forming a new entity from both. Competition regulators describe the same idea as an “economic concentration”: a lasting change of control over a target. That control test, not just the label on the deal, decides which rules apply.
What laws govern mergers and acquisitions in Saudi Arabia?
No single “M&A code” governs deals here. Several instruments work together.
The Companies Law (Royal Decree No. M/132 of 1443H), effective 19 January 2023, sets the corporate mechanics: how a company is bought, how shareholders vote on a merger, and how directors must act. It introduced the Simplified Joint Stock Company (SJSC), a flexible vehicle that acquirers increasingly use as a holding or bid entity.
The Investment Law (Royal Decree No. M/19 of 1446H), in force from February 2025 and administered by MISA (the Ministry of Investment of Saudi Arabia), governs the foreign investor’s right to hold the target. It treats local and foreign investors equally and replaces the old foreign investment license with a unified MISA registration, restricting foreign participation only in a defined list of “excluded activities.”
On top of these sit the Competition Law, enforced by the General Authority for Competition (GAC), and, for listed companies, the Merger and Acquisition Regulations issued by the Capital Market Authority (CMA). Where the bidder is listed and issues shares as consideration, the Rules on the Offer of Securities and Continuing Obligations also apply. Tax and labour rules round out the picture.
Share deal or asset deal: which structure fits?
Most private M&A in the Kingdom is structured as a share purchase, and for practical reasons. Share deals offer simplicity and business continuity, avoiding the need to obtain or amend the target’s operating permits and licences, transfer employee sponsorships, or renegotiate employment contracts. The trade-off is inheritance: in a share purchase the buyer takes on the target’s liabilities along with its business.
An asset purchase flips that calculus. Its main advantage is that the buyer can choose which assets and liabilities to acquire, leaving unwanted exposure behind. The cost is administrative friction, because licences, contracts and staff often have to move across individually.
Read also: Earn-Outs in Saudi Arabia: Structuring Price, Performance and Post-Closing Risk
One point that reassures many first-time buyers: there are currently no transfer taxes on either share deals or asset deals in Saudi Arabia. Tax still matters at the entity level, though. Saudi Arabia applies Zakat at 2.5% to the Saudi and GCC-owned share of a company and corporate income tax at 20% to the foreign-owned share, with VAT at 15% and no personal income tax on salaries. Treat these as compliance context, not a plan; the right structure depends on facts a tax adviser needs to see.
Which regulators must approve a Saudi M&A deal?
Think of approvals as a sequence, not a single gate.
MISA comes first for a foreign buyer: the acquirer needs an active MISA registration to hold the interest, unless the target’s activity sits on the excluded list. The Ministry of Commerce (MoC) then handles the corporate filings, including any amendments to the target’s or bidder’s bylaws. The GAC reviews the deal for competition effects where the financial thresholds are met. And for a listed target, the CMA is the principal gatekeeper.
A common mistake is assuming these run in parallel and finish together. In practice, the CMA usually grants its approval only once the other regulatory approvals are in hand, so sequencing drives your timeline.
When does a deal need competition clearance from the GAC?
This is where foreign-to-foreign acquirers are most often caught off guard. A Saudi filing can be triggered even when the target has no Saudi subsidiary, because turnover, not local presence alone, sets the test.
Under the GAC’s current guidelines, an acquisition is notifiable only where all three financial thresholds are met: combined worldwide turnover of the parties exceeding SAR 200 million; the target’s global turnover exceeding SAR 40 million; and combined turnover generated in Saudi Arabia exceeding SAR 40 million. The 2025 Guidelines, issued in the fifth edition, now explicitly require the target to contribute to local Saudi revenue for an acquisition to be caught, which narrows the net for genuinely foreign deals.
Read also: Competition Law in Saudi Arabia: Compliance, Mergers, and Penalties
Timing is generous but not trivial. The statutory review period runs 90 calendar days and may be extended by a further 45. A GAC clearance is valid for one year, and a transaction not completed within that window requires re-application. The regulator is active: the GAC reviewed 406 applications in 2025 and issued a record 271 No Objection Certificates, so filings here are routine, not exceptional.
How does acquiring a listed Saudi company work?
Public deals live under the CMA’s Merger and Acquisition Regulations, and the thresholds are precise. The Regulations apply to any purchase or sale of voting shares in a listed company that results in ownership or control of 10% or more. Cross a higher line and a duty to the wider market kicks in: if an acquisition results in ownership or control of 50% or more of the voting rights, the CMA has the authority to require the acquirer to offer to buy the remaining shares, protecting minority holders.
Two features tend to surprise newcomers. Both the offeror and the target must appoint an independent legal adviser authorised to practise law in Saudi Arabia and an independent financial adviser, and the financial adviser acts as the channel to the CMA. On price, the offer must match the highest price the bidder or its concert paid for target shares in the three months before announcing a firm intention to bid.
Market practice matters as much as the rulebook. Saudi public M&A strongly favours negotiated, board-supported structures, and the most common route to date has been a statutory merger by way of a share-for-share exchange, following CMA approval and the extraordinary general assemblies of both companies. Landmark combinations such as the SABB and Alawwal Bank merger and the NCB and Samba tie-up followed this model. Hostile bids, by contrast, have not featured in the market.
Access to listed shares has also just widened. On 6 January 2026 the CMA amended its rules to remove the QFI regime and discontinue the swap-agreement framework, opening Saudi-listed shares to direct investment by all foreign investors from 1 February 2026, subject to foreign-ownership limits and sectoral restrictions.
Common M&A mistakes foreign investors make in Saudi Arabia
Most stalled or unwound deals in the Kingdom trace back to the same handful of assumptions. Three come up again and again in practice:
- Assuming control means majority ownership. The GAC judges control by substance, not shareholding. It now expressly recognises positive, negative, joint and de facto control, and de facto control can arise from contractual or governance rights even where the equity stake suggests otherwise. A minority position with strong veto rights can still be a notifiable deal.
- Closing before competition clearance. The GAC can investigate a transaction after closing and unwind it where a required notification was never made. Early competition analysis is worth the cost precisely because it removes that risk before money changes hands.
- Overlooking sector restrictions. Some Saudi activities remain restricted or licensed regardless of the general open-door policy. The excluded-activities list under the Investment Law, along with any sector regulator’s rules, should be checked before a term sheet is signed, not after.
Conclusion
Saudi Arabia has become a genuinely workable M&A market for foreign buyers, but it rewards preparation. The structure you choose shapes your liabilities; MISA registration secures your right to hold the asset; GAC clearance can be triggered by turnover alone; and any listed target pulls the whole deal into the CMA’s disciplined offer regime. None of this is insurmountable. It simply needs to be mapped early, in the right order, with local counsel who know how each regulator behaves in practice.
As of July 2026, under the law of the Kingdom of Saudi Arabia. Reviewed by the Corporate and M&A team at Hamad in Association with Youssry Saleh & Partners (AHYSP). This article is general legal information, not legal or financial advice, and specific transactions should be assessed on their own facts.
If you are weighing an acquisition or joint venture in the Kingdom, an early read on structure and clearances usually saves far more than it costs later. Our corporate team maps the MISA, GAC and CMA route for your specific deal before you commit to a term sheet, so surprises surface early rather than at closing. For customized legal consultation, please contact us at info@ahysp.com.
FAQ
Yes. A foreign investor can buy shares or assets in a Saudi company once registered with MISA, provided the target’s activity is not on the Investment Law’s excluded list. Some sectors carry ownership caps or licensing conditions, so it is worth confirming the specific activity before signing anything.
You need GAC clearance only if all three thresholds are met: combined worldwide turnover above SAR 200 million, target global turnover above SAR 40 million, and combined Saudi turnover above SAR 40 million. Even a purely foreign-to-foreign deal can be caught if those numbers are hit, so screen early.
The GAC’s competition review runs up to 90 calendar days, extendable by a further 45. For listed targets, the CMA’s approval process adds its own timetable and usually comes last, after other regulators have signed off. Realistic deals should budget several months for the full approval chain.
A share deal transfers the whole company, including its liabilities, but keeps licences, contracts and staff in place. An asset deal lets the buyer pick specific assets and liabilities, at the cost of moving permits and employment arrangements individually. Neither currently attracts a transfer tax in the Kingdom.
The CMA’s rules bite at 10% ownership or control of voting shares for disclosure purposes. Cross 50% of voting rights and the CMA can require you to offer to buy out the remaining shareholders, protecting minorities. The offer price must match the highest price you paid in the prior three months.
