How Can Foreign Companies List on the Saudi Stock Exchange?
In 2019, the Capital Market Authority (CMA) of Saudi Arabia introduced new regulations allowing foreign companies to pursue direct secondary listings on the Saudi Exchange. By 2022, this framework was further enhanced to deepen the Saudi capital market, diversify the range of listed companies available to investors, and boost market liquidity.
In this article, Salamah Law Firm outlines the legal and regulatory requirements that foreign companies must meet to list on the Saudi Stock Exchange.
What Is a Primary Listing?
There are two types of primary listings:
Primary Listing with Offering:
This involves a foreign company that is not listed on any stock exchange offering its shares publicly for the first time in the Saudi capital market.
Primary Technical Listing (Direct):
This refers to the listing of a foreign company’s shares that are not already listed on any other exchange, without a public offering in the Saudi market.
Requirements for Foreign Companies to List on the Main Market
According to Saudi Tadawul Group, the following requirements must be met by foreign companies seeking to list:
Company Structure:
The entity must be a joint stock company or an equivalent structure under foreign law.
Minimum Market Capitalization:
The foreign company must have a market capitalization of no less than SAR 4 billion for at least six months prior to the application date.
Director and Executive Liability Insurance:
The company must have adequate insurance coverage with a local insurer for all board members and senior executives. The coverage must be proportionate to the company’s size and risk exposure, providing protection for shareholders and third parties in the event of violations of CMA regulations.
Country of Incorporation:
The company must be listed, or intend to be simultaneously listed, in its home jurisdiction, and that jurisdiction must be under the supervision of a regulatory body that is a signatory to the IOSCO Multilateral Memorandum of Understanding (MMoU).
Disclosure Obligations:
The company must make the following disclosures:
- All disclosures must be made in the company’s home currency, with an equivalent in Saudi Riyals.
- Details of any existing listings, including type and number of shares listed.
- Mechanism for the transfer of shares between the home market and the Saudi market.
- Disclosure policies in both jurisdictions, especially where trading hours differ.
- Ongoing obligations applicable to the foreign issuer.
- Tax implications for investors.
- Information about the company’s external auditor.
Financial Statements:
Financial statements must be prepared and audited in accordance with International Financial Reporting Standards (IFRS), disclosed in both Arabic and the language of the home country, and presented in Saudi Riyals in addition to the home currency.
he Saudi Stock Exchange—whether through an IPO or a dual listing—is far more than a financial transaction. It is a complex legal and regulatory process involving multiple frameworks, regulatory bodies, and detailed compliance procedures.
This is where Salamah Law Firm plays a vital strategic role. We offer tailored legal consultations aligned with the requirements of the Capital Market Authority (CMA) and the Saudi Exchange (Tadawul), advise on the optimal legal structure for the offering, and ensure the protection of both existing and prospective shareholders.
Our legal team also drafts and reviews offering documents with utmost precision, ensuring full regulatory compliance and minimizing exposure to potential liabilities.
