STAT Authors Saudi Arabia Chapter of the International AI in Financial Services Review 2026/27
STAT is pleased to have authored the Saudi Arabia chapter of the International AI in Financial Services Review 2026/27, published by Beaumont Capital Markets.

With 2026 designated the Year of Artificial Intelligence, the chapter maps how AI in the Kingdom’s financial sector is governed. There is no single AI statute. Instead, requirements are spread across SDAIA, the CMA, SAMA, the Insurance Authority and the NCA. The chapter also covers the CMA’s new robo-advisory regime, cross-border data and cloud requirements, and the draft policies expected to shape the next phase.

Working where technology, regulation and finance meet, our team continues to advise banks, fintechs and investment firms on AI governance, data protection and regulatory engagement across the Kingdom’s evolving landscape, in support of Vision 2030.

Authored by Partner Zeyad AlSalloum, Senior Counsel Richard Blackburn and Associate Abdullatif Alharbi.

As AI reshapes the Kingdom’s financial sector, this chapter reflects STAT’s commitment to guiding clients through each regulatory development with clarity and confidence, setting the new legal standard.

• Read the Full Chapter: Saudi Arabia Chapter | AI in Financial Services Review 2026/27

The debate around foreign ownership in Saudi equities often focuses on the percentage: how much international investors are permitted to own, and whether that ceiling should rise. The more important economic question is what a broader international investor base can actually do for Saudi companies, Saudi capital markets and the wider economy.

The answer is broader than simply “bringing money in”. Foreign capital can support the economy through three connected channels: direct capital formation, domestic capital recycling and market deepening. These benefits can arise within the existing framework; further liberalisation could increase their scale.

Fresh equity for Saudi corporate growth

Where foreign investors subscribe for newly issued shares in an IPO, follow-on offering or rights issue, the link is direct. The company receives fresh equity that can fund expansion, capital expenditure, acquisitions or working capital without increasing leverage. Equity proceeds can also be used to repay debt and strengthen the balance sheet.

This distinction matters when discussing the economic contribution of an offering. An IPO may involve new shares, existing shares sold by shareholders, or a combination of both. The company receives the proceeds attributable to the new shares it issues, rather than the proceeds of shares sold by existing shareholders.

Broader international demand can therefore expand the pool of capital available to Saudi businesses, while the offering structure determines who receives that capital.

Domestic capital recycling when existing shares change hands

When a foreign investor buys existing shares, the purchase price goes to the selling shareholder, not the issuer. That does not mean the transaction has no wider economic benefit.

A Saudi shareholder who sells gains liquidity that may be reinvested in another listed company, an IPO, an investment fund, sukuk, a private business or a new project. The proceeds may also be deposited with a Saudi financial institution or spent elsewhere in the domestic economy.

Where proceeds are redeployed in the Kingdom, foreign demand can help mobilise Saudi capital for other economic uses. This is a capital-recycling channel, distinct from the direct funding a company receives when it issues new shares.

The qualification is important: domestic reinvestment is not automatic. A selling shareholder may retain the proceeds or invest them abroad. The economic effect depends on what happens after the shares are sold.

Deeper liquidity and better price discovery

A broader investor base can bring different investment mandates, time horizons, valuation views and sector expertise to the market. That diversity can increase the range of potential buyers and sellers and help investors transact meaningful positions without excessive price impact.

Institutional research and analysis can also help prices respond more closely to company-specific information. The potential gain is a market with greater depth and more informative pricing, rather than simply a higher volume of foreign trading.

A credible secondary market also supports future primary capital raising. It can provide valuation benchmarks, more credible exits for existing shareholders and greater confidence in the prospects for subsequent IPOs, follow-on offerings and rights issues. It may also make listed shares more useful as acquisition currency.

More foreign participation can support these outcomes, but cannot guarantee them.

A potentially lower cost of equity

A wider pool of investors, deeper liquidity and greater competition among providers of capital may reduce part of the premium investors demand for holding shares that are difficult to trade. Over time, this could lower the cost of equity and make future capital raisings more viable.

The effect is conditional. Earnings, cash flow, growth quality, governance, valuation, free float and market conditions remain central to the investment case. International demand can improve pricing efficiency, but it cannot compensate indefinitely for weak fundamentals or poor post-listing delivery.

For Saudi issuers, attracting foreign capital is therefore connected to the quality of the business and its public-market proposition, not merely the availability of ownership capacity.

Stronger governance, disclosure and global integration

Long-term institutional ownership can influence more than the shareholder register. Engaged investors can reinforce expectations around board oversight, related-party transactions, minority-shareholder protection, capital allocation and management accountability.

International scrutiny can also raise expectations for accessible English-language information, meaningful operating indicators, risk transparency and consistent reporting. These expectations make disclosure quality and investor communication important components of the relationship between a listed company and its shareholders.

Broader international ownership can support analyst attention, comparison with regional and global peers, and greater relevance within global portfolios. The strategic opportunity is for Saudi equities to become a durable allocation for international institutions rather than an episodic trade.

The objective is durable participation, not maximum inflows

Foreign portfolio investment also brings risks. Flows can reverse, global risk-off episodes can affect local markets, and herd behaviour can amplify price movements. An investor base concentrated in a narrow segment, or dominated by short-term or highly leveraged capital, may be less resilient than headline inflow figures suggest.

The objective should therefore be a broad, diversified and durable institutional investor base. Assessing success requires attention to the quality and composition of participation, alongside its scale.

For Saudi companies preparing to raise equity, the practical implication is to consider how offering structure, governance, disclosure and investor engagement can help attract and retain that investor base. For the market as a whole, the opportunity is to connect international demand with productive investment and more effective capital allocation.

Foreign ownership is not the objective. Better capital allocation, deeper markets and greater funding capacity for Saudi companies are.

To discuss how your company can position itself to attract and retain international capital, or how these considerations could shape its IPO or other equity capital markets plans, please contact:

Robert Vydra
Partner | Head of Equity Capital Markets
STAT Law Firm
E: rvydra@statlawksa.com
M: +966 55 001 5326

Increasing or removing the foreign ownership cap would be an important further step in the development of Saudi capital markets. However, a higher ceiling would not, by itself, make Saudi equities more investable for international institutions.

In this analysis, Robert Vydra considers what could come next, building on the work of the Capital Market Authority and Saudi Exchange in opening access, strengthening bilingual disclosure and establishing market-making, securities-lending and covered short-selling frameworks.

Six areas that could strengthen international participation

Robert identifies six areas in which further progress could help translate wider foreign-investor access into deeper and more sustained participation in Saudi equities. These span the regulatory framework, market infrastructure and transaction practice, rather than falling within the responsibility of any single institution.

Further foreign ownership liberalisation. Further relaxation of the general foreign ownership ceiling could expand the capacity for international investment, while preserving issuer- or sector-specific restrictions where broader policy considerations justify them. The relevant question is how much additional investable capacity a change would create, rather than the headline percentage alone.

Simpler operational access. More predictable and efficient account opening, custody, beneficial ownership documentation, settlement and securities transfers would make legal access more practical. For an international institution, the time, cost and certainty involved in establishing and managing a Saudi investment position are important aspects of market accessibility.

Current information when investors commit capital. Predictable IPO timetables and the freshest practicable financial information would help investors assess an offering on a more current basis. The objective is to minimise the gap between prospectus disclosure and the information needed when investors decide whether, and at what valuation, to commit capital.

Deeper liquidity, not merely eligibility. Meaningful free float, broader institutional allocations, wider market-making coverage, deeper securities lending and efficient block liquidity could strengthen the institutional aftermarket. The practical test is whether investors can build, manage and exit meaningful positions efficiently, not simply whether they are permitted to hold the shares.

Market data that global institutions can use readily. More accessible, consistently structured and machine-readable financial information, historical disclosures, operating metrics and free-float data could make Saudi issuers easier to analyse and compare. The opportunity lies in helping international institutions integrate Saudi market information directly into their research and investment processes.

Measures of participation, not only permission. A broader assessment of market development would look beyond legal eligibility to foreign ownership as a percentage of free float, international institutional participation in IPO books, trading depth, breadth of ownership across issuers and post-listing retention. Together, these measures would provide a fuller picture of whether wider access is translating into durable international investment.

A high ownership ceiling has limited practical value if an institution cannot efficiently build or exit a meaningful position. Similarly, legal access cannot achieve its full potential where investors face operational friction or an information gap when pricing an offering.

This is a next-stage agenda, not an argument that the market has stood still. The opportunity is to build on the Kingdom’s reforms and secure a larger, more durable place for Saudi equities in global portfolios.
Access was the first phase. Investability is the next.

For companies preparing for a Main Market IPO, the practical implication is to consider international-investor expectations early, when the offering structure, disclosure and aftermarket strategy are being developed.

To discuss how these considerations could shape your company’s public-markets plans, please contact:

Robert Vydra
Partner | Head of Equity Capital Markets
E: rvydra@statlawksa.com
M: +966 55 001 5326

• View the full carousel (PDF)

STAT Partner and Head of Equity Capital Markets Robert Vydra identifies six practical tests for Saudi issuers seeking to attract and retain international institutional capital.

STAT is pleased to share the latest Saudi equity capital markets analysis by Robert Vydra, Partner and Head of Equity Capital Markets, examining what makes a Saudi issuer genuinely investable for foreign institutions.

Legal access is only the starting point. International investors compare Saudi issuers with regional and global alternatives and assess not only whether they are permitted to invest, but whether the expected return justifies allocating capital to a particular company, at a particular valuation and at that point in time.

The analysis identifies six practical tests for issuer investability: a clear international equity story; sufficient free float, liquidity and trading depth; credible valuation and post-listing delivery; governance and minority-shareholder confidence; investor-grade disclosure and reporting; and sustained management access supported by professional investor relations.

The central conclusion is that foreign-investor readiness should not begin after listing. It should be designed into the IPO process.

For companies considering a Main Market IPO, the offering structure, disclosure process, governance framework and investor-engagement strategy should be developed with international investor expectations in mind from the outset.

• What Makes a Saudi Issuer Investable

Saudi Arabia’s new Enforcement Law marks a significant development in the Kingdom’s enforcement framework, introducing important changes for creditors, debtors and commercial parties.

From electronic registration requirements for promissory notes to new limitation periods and enhanced enforcement mechanisms, the new framework will have practical implications across a wide range of transactions.

In our latest Client Alert, we highlight the key changes and what businesses should consider ahead of the Law coming into force on 28 October 2026.

Full details below,

• STAT – Saudi Enforcement Law 2026

The debate around foreign ownership in Saudi listed companies is understandably focused on whether the general 49% foreign ownership cap may eventually be increased or removed. That remains important, particularly for larger issuers where foreign ownership restrictions can affect index treatment, passive flows and international market positioning.

However, an analysis of Saudi Exchange data last updated on 31 August 2026 points to a separate and more immediate issue. The analysis covers 376 listed companies, comprising 253 Main Market companies and 123 Nomu companies, of which 372 are subject to the general 49% foreign ownership limit. Median actual foreign ownership across all 376 companies is only 2.83%. Approximately 66.0% of listed companies are below 5% actual foreign ownership and 89.4% are below 10%.

The difference between the two markets is particularly notable. Median actual foreign ownership is 4.88% on the Main Market, compared with only 0.37% on Nomu, where 81.3% of issuers have actual foreign ownership below 1%.

Saudi Exchange’s “actual foreign ownership” figure excludes foreign strategic investors and includes swap interests. The analysis is point-in-time and issuer-weighted rather than market-cap weighted.

Further liberalisation could still have significant implications for Saudi capital markets, including foreign inclusion factors, index weights, passive investment flows and the Kingdom’s international market positioning. But for most individual issuers, the data suggests that the immediate challenge is not simply the legal ownership ceiling. There is already substantial unused foreign ownership headroom.
The more difficult question is how to convert legal access into sustained international investor demand. That turns the focus to investability, including free float and liquidity, the strength of the equity story, valuation, governance, management access, research coverage, disclosure quality and consistent post-listing delivery.

For companies preparing for a Main Market IPO, a Nomu IPO or a future transfer from Nomu to the Main Market, foreign-investor readiness should therefore be designed into the transaction rather than addressed only after listing.

49% defines the legal headroom. The 2.83% median shows how much remains unused.

The board-level question is consequently not only whether foreign investors are permitted to own the shares, but why they should want to own them.

Legal access creates capacity. Investability converts that capacity into ownership.

• Saudi Foreign Ownership Carousel (1 September 2026)

On 30 August 2026, the shares of Armah Sports Company commenced trading on the Main Market of Saudi Exchange under symbol 6022, marking an important new stage in the company’s public-markets journey.
STAT’s Equity Capital Markets team had the privilege of advising Armah on its original IPO and listing on Nomu – Parallel Market in 2023. We are proud to have continued advising the company on its transfer from Nomu to the Main Market in 2026.

There is something particularly rewarding about working with a client from the beginning of its public-markets journey and remaining alongside it as the business develops, its ambitions grow and one capital-markets milestone leads to the next.

An IPO is not the end of the story. The strongest adviser-client relationships are built over time, through the IPO process, life as a listed company and the strategic decisions that shape the issuer’s next stage of growth.

Armah’s progression also reflects an important part of STAT’s Saudi equity capital markets practice. We advise on Main Market IPOs, while also having substantial experience in significant Nomu IPOs where a subsequent transfer to the Main Market may form part of the issuer’s longer-term capital-markets strategy.

From Armah’s Nomu IPO in 2023 to its first day of trading on the Main Market on 30 August 2026, it has been a genuine pleasure to make this journey alongside the Armah team.

We congratulate Armah Sports Company, its board, management, shareholders and everyone involved in achieving this important milestone. We look forward to seeing the company’s next chapter unfold.

Considering a Nomu IPO or a Future Transfer to the Main Market?

If your company is considering a Nomu IPO, a future transfer from Nomu to the Main Market or a Main Market IPO, and you would like to discuss how to prepare the company to take advantage of the next Saudi ECM window, please contact:

Robert Vydra
Partner | Head of Equity Capital Markets
E: rvydra@statlawksa.com
M: +966 55 001 5326

STAT is pleased to share its latest client alert on the draft amendments to the Saudi Competition Law, covering the key changes proposed by the General Authority for Competition and what they mean for businesses operating in the Kingdom.

Our team continues to advise clients on competition compliance, merger control, and engagement with GAC.

Full analysis below,

• STAT – Competition Law Amendments 2026

STAT is pleased to announce that it acted as legal counsel to Al Yamamah Company for Reinforcing Steel Bars on the development of its new integrated steel production facility in Yanbu, Saudi Arabia.

With a planned production capacity of one million tonnes of steel billets per annum, the project, with an approximate value of SAR 270 million, represents a significant investment in Saudi Arabia’s industrial and manufacturing sector and will strengthen the Kingdom’s domestic steel-production capabilities. The Project brings together a leading Saudi steel manufacturer and a leading Italian engineering group, reflecting the increasingly international nature of major industrial developments in the Kingdom.

STAT advised on the drafting, review, negotiation and execution of the cross-border transaction documentation. The mandate included advising on contractual arrangements with Danieli, one of the world’s leading engineering groups for the metals industry, as well as on contractual risk allocation, commercial terms and the legal framework governing the implementation of the Project.

STAT team was led by Counsel Ruba Alharthi, supported by Associate Rilwan Shittu and Trainee Associate Ibrahim Alshinifi.

Ruba Alharthi commented: “This project reflects the continued ambition and growth of Saudi Arabia’s industrial and manufacturing sector in line with the objectives of Saudi Vision 2030. Advising on cross-border industrial projects of this nature requires not only an understanding of the local legal framework but also the ability to navigate complex international contractual arrangements. We were pleased to advise Al Yamamah Company for Reinforcing Steel Bars on this landmark cross-border transaction and to support a project that will strengthen the Kingdom’s domestic steel production capabilities.”

This mandate builds on STAT’s track record of advising leading industrial, infrastructure and manufacturing clients on complex domestic and cross-border transactions.

We are proud to announce that STAT has been recognised as Equity Capital Markets Legal Adviser of the Year at the GBM Awards Saudi Arabia 2026.

The award reflects our longstanding commitment to excellence in Saudi Arabia’s equity capital markets and the privilege of advising issuers, shareholders and financial institutions on many of the Kingdom’s most significant transactions.

Robert Vydra, Head of Equity Capital Markets at STAT, commented: “This recognition is first and foremost a reflection of the trust our clients place in us and the outstanding commitment of our ECM Team. We are deeply grateful to our clients for their confidence, to the investment banks for their recommendations and collaboration, and to the Capital Market Authority, Saudi Exchange and the wider regulatory community for their leadership and support in advancing the Kingdom’s capital markets. We are privileged to work alongside issuers, shareholders and investment banks on many of Saudi Arabia’s most significant equity capital markets transactions, and we remain committed to delivering the highest standard of legal advice as the Kingdom’s capital markets continue to evolve.”

We thank GBM Awards Saudi Arabia for this recognition and congratulate all fellow award recipients.

STAT remains focused on providing technically rigorous, commercially informed and execution-driven advice, and on supporting the next generation of landmark transactions in Saudi Arabia’s equity capital markets.

STAT acted as Saudi legal counsel to ISDA on the ISDA Notices Hub legal opinion for Saudi Arabia, addressing the delivery of critical notices under certain master agreements through the ISDA Notices Hub under Saudi law.

The ISDA Notices Hub, powered by S&P Global Market Intelligence, lets market participants deliver and receive termination-related notices under certain master agreements with speed, certainty and security. Saudi Arabia joins the growing list of jurisdictions covered by opinions on the ISDA Notices Hub.

This builds on STAT’s work authoring ISDA’s Saudi close-out netting opinions under the SAMA and CMA frameworks and advising the CMA on its Close-out Netting and Related Collateral Arrangements Regulation.

The mandate was led by Partner Zeyad Y. AlSalloum, with Senior Counsel Richard Blackburn.

“We are proud to have supported ISDA in bringing this piece of global market infrastructure to Saudi Arabia, giving market participants the legal certainty they need.”  – Zeyad Y. AlSalloum

STAT is pleased to announce that it acted as legal counsel to the substantial shareholders of United Mining Industries Company (UMI) in connection with the sale of their entire shareholding to Knauf International GmbH.

The transaction involved the sale of ordinary shares representing 63.2% of UMI’s issued share capital, for an aggregate consideration of approximately SAR 504 million.

STAT advised the selling shareholders across all aspects of the transaction, including deal structuring, negotiation, transaction documentation, regulatory compliance, and completion mechanics.

The STAT team was led by Mishari Al Abbad, Managing Partner, supported by Associates Momina Iftikhar, Tara Alsaad, and Wafa Alenezi.

Mishari Al Abbad commented: “Saudi Arabia is increasingly attracting serious, long-term international capital, and this transaction is a good example of that. We were pleased to advise our clients on a smooth and well-executed exit, and look forward to continuing to support transactions that reflect the Kingdom’s position as one of the most dynamic economies in the world today.”