Fund regulation in Saudi Arabia has a number of features that are crucial to consider before starting a business in this jurisdiction. In our blog post, we will provide a brief overview of the main regulatory aspects of investment market regulation in Saudi Arabia. You can get more detailed information during an individual consultation with our expert.
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Saudi Arabia is the richest country in the Persian Gulf and the largest stock market in the Arab world.
Amid the pandemic and the fall in oil prices, FDI flows to Saudi Arabia in 2020 decreased significantly. Meanwhile, the country's government is making efforts to reverse this trend. Attracting foreign investment is one of the main goals of the Vision 2030 strategy, which is overseen by the Crown Prince of Saudi Arabia, Mohammad bin Salman Al Saud.
PEF establishment in Saudi Arabia
For entrepreneurs wishing to start a business in the Kingdom of Saudi Arabia, it is important to know that the local financial regulator CMA oversees asset management in the country and is responsible for auditing fund managers. The audit is carried out both on a regular basis and spontaneously when the regulator considers it appropriate. Therefore, we advise fund managers in this jurisdiction never to lose their vigilance and be always ready for an unexpected check.
Before the establishment of a PEF in Saudi Arabia, the manager must seek approval of the regulator. The manager must obtain a financial license in Saudi Arabia, just like any third party consultants appointed by the fund.
If you plan to establish a PEF in Saudi Arabia, it should be noted that the fund manager must be licensed as an authorized person to participate in the management. There’s also a list of employees who need authorization on the stage of the fund set up:
- senior executives;
- financial manager;
- corporate finance professionals
- compliance officer;
- AML employee.
The manager, directors or controllers are not required to register as an investment advisor in Saudi Arabia.
It is also worth noting that local banks and financial companies are required to maintain certain levels of liquidity.
If you intend to establish a PEF in this jurisdiction, it is advisable to first consult a lawyer on financial regulation in Saudi Arabia in order to better understand the legal requirements. To sign up for an individual consultation with our experts, please fill out the form below or contact us in any other convenient way.