The Saudi Companies Law M&A Impact: 5 Disruptive Ways It Rewrites Deal Structures

The new Companies Law in Saudi Arabia was enacted through Royal Decree No. (M/132) and has been implemented in phases since January 2023. It replaced the 2015 Companies Law and has now reached a major operational stage, with April 2026 implementing regulations in force. For M&A teams, this means a different baseline for compliance, approvals, and paperwork in live transactions.

One clear structural shift is the wider menu of company forms and how they affect acquisitions and joint ventures. The law recognises five principal entity forms, and it introduced the Simplified Joint Stock Company (SJSC). Compared with a traditional Joint Stock Company (JSC), an SJSC can be designed with fewer regulatory complexities and more customised governance through its Articles of Association.

To show how capital rules can push deal structuring choices, here are the minimum capital figures stated in the sources: LLC minimum capital was SAR 500,000 for foreign-invested companies under the prior rule, but the 2022 law eliminated that mandatory minimum. JSCs have a minimum capital requirement of SAR 500,000, reduced from the previous SAR 2 million threshold.

Five Ways The New Law Changes Deal Structures

1) Capital-light entry and add-on acquisitions. With no mandatory minimum capital requirement for LLCs under the 2022 law, some deals may shift toward staged acquisitions or smaller initial entries, especially for foreign investors who previously faced a SAR 500,000 foreign-invested LLC minimum. By contrast, JSC structuring still carries stated minimum capital figures.

2) The SJSC as a flexible acquisition vehicle. Sources describe the SJSC as having no minimum capital requirement and allowing governance to be customised. The AHYSP source adds that a JSC board must have at least three members and must conclude at least 4 meetings per year, while an SJSC does not require a formal board and may be managed in different ways as set out in its Articles of Association. This can reshape how buyers plan control, governance, and post-deal management.

3) More procedural friction in LLC share transfers. The Legal 500 guide explains that because an LLC’s ownership structure is set out in its articles or bylaws, any share transfer must be documented through an amendment to those documents. In most cases, the amendment application must first be approved through the Saudi Business Center (SBC) portal. Although the Companies Law permits amendments with 75% shareholder approval, in practice all shareholders, including the transferor and transferee, must sign the amended articles before the SBC official.

4) Tighter scrutiny and transparency levers. The Global Law Experts source states that the April 2026 regulations introduce mandatory beneficial-ownership disclosure, a unified national commercial register, and tightened approval thresholds for related-party and material transactions. In deal terms, this can change diligence checklists, closing conditions, and internal approval timelines.

5) Foreign investor structuring is more open, but still licensed and sector-aware. Global Law Experts states that the Ministry of Investment (MISA) now permits 100% foreign ownership across most sectors, but a MISA investment licence remains a prerequisite for a foreign entity establishing a commercial presence, including through an acquisition. It also notes that sector-specific restrictions persist, including defence, certain upstream hydrocarbons, security services, and specific real-estate activities.