Succession & Cross-Border Investment: Opportunities in the Kingdom of Saudi Arabia

As Vision 2030 enters its execution phase, international advisors gather in Riyadh to discuss family business governance and the Kingdom's evolving investment landscape.

The Kingdom of Saudi Arabia stands at a pivotal moment. As Vision 2030 transitions from planning to execution, family businesses and international investors are navigating an increasingly sophisticated landscape where succession planning, governance, and cross-border opportunities intersect. A recent panel discussion at the Riyadh Private Wealth event brought together leading advisors from across the legal, consulting, trust, and insurance sectors to explore these critical themes and provide practical guidance for families and investors as they position themselves for the Kingdom's next chapter.

From Marathon to Sprint: The Vision 2030 Shift

"Up until now, it's been like running a marathon," explained Jiggy Rawal of Jellyfish Consulting. "Vision 2030 has been paced; it's been about endurance. However, as we approach the end of the 2030 movement, it's more like a sprint. It's a sprint to the finish, but the sprint is about execution and transaction."

This shift from building to transacting is palpable across the Kingdom's business landscape. Families are transitioning from preparation to action, seeking partnerships with international counterparts and aiming to realize the value of years of infrastructure development. Rawal emphasized that success now hinges on "governance, operational readiness, and keeping capabilities" aligned with execution demands.

Hassan Zawawi of Alzawawi Law Firm, who operates his legal practice from Jeddah, highlighted the surge in activity: "We see a huge drive from family businesses and private capital in specific sectors such as hospitals, healthcare, hospitality, and hotels." He noted that cybersecurity represents a particularly dynamic new sector, with multiple international companies expanding their operations in Saudi operations to capitalize on the growing demand for cloud computing, software development, and personal data protection services.

The inquiry pipeline reflects this momentum. "In the last five years, inquiries from multinational companies wanting to come to Saudi Arabia have increased on multiple fronts," Zawawi observed, with particular interest from North America and the UK alongside traditional European investors.

A Transformed Regulatory Environment

The regulatory environment has undergone significant evolution to support this growth. Manal Salman of The Law Firm of Majed Mohammed Garoub emphasized that "the regulation now is more international, more eco-friendly with everybody. We have commercial law, corporate law, civil law—this is giving a lot of security to investors and encouraging them to start a company, to do business from zero to one." What once took weeks now takes "just a couple of hours or a couple of days" to establish a business presence and obtain necessary licenses.

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Salman celebrated the emergence of highly educated local entrepreneurs actively inviting international investors to participate in their ventures, creating natural partnerships that blend local knowledge with global capital and expertise. This collaboration between locals and foreign investors, she noted, drives the country's current dynamism across sectors from film production to agricultural technology.

The Governance Imperative

Yet opportunity without preparation leads to missed potential. For family businesses, which control 63% of Saudi companies, according to Salman, governance has become paramount rather than merely aspirational. "Before, it was just like a national anthem. Everybody wanted to do governance, but the actual meaning of it, nobody knows," she explained. "Now people start to understand: if you don't govern your company, your work, your mainstream, whatever, you cannot be sure if you are on the right path."

James Ramsden of Trident Trust stressed that stakeholder engagement forms the foundation of effective succession planning: "It's no good having a really lengthy document that only the patriarch or one or two people subscribe to, because it will not stand up when it's challenged."

The panel emphasized that successful family constitutions must capture family values, clearly address succession planning, and establish transparent mechanisms for dispute resolution. "The only people that win out of family disputes are lawyers," Ramsden noted candidly. "It just ruins family relationships, so build a framework where families can try and deal with disputes in a way that provides an opportunity for them to continue collectively as a family unit."

Ramsden also highlighted a broader stakeholder consideration often overlooked: "Family businesses generally employ a lot of people, and those people rely on the family for their employment, for their livelihoods. In some respects, it's incumbent upon the family to engage and look forward. There are examples when family businesses fail not because they're poor businesses—they fail because the shareholders have failed."

Alternative Dispute Resolution Takes Center Stage

Saudi Arabia has recognized the challenge of family disputes, establishing the Saudi Family Businesses Centre, which currently manages 180 active family business disputes through confidential processes. The focus on alternative dispute resolution reflects cultural realities. "In a family, you cannot take your father to court, or you cannot put your brother to jail," Salman explained. "There should be another way, which is the alternative solution through mediation."

She emphasized the importance of finding the right role for each family member: "Everybody wants to be a CEO, everybody wants to be involved, everybody wants to be the general manager. However, there are only one, two, or three of these positions. So why don't you just go with the flow, find your place—the right person in the right position."

Zawawi emphasized that transparency remains crucial: "What is the vision for the family business and why you, as current shareholders and future shareholders, should be part of it. Leaving people out and keeping them in the dark is what ultimately creates these disputes. Once it's too late, you can start to try and recover those relationships, but never mind the actual business."

Structuring for Success Across Generations

The panel addressed how international structures can complement local business practices while respecting Sharia principles. Angela Calnan of Collas Crill described a nuanced approach developed through years of working in the region: "If a family is local and they're very happy with how Sharia applies to their business, we'll leave that alone. What we would do offshore would be to maybe equalize with some of the newer assets through trusts or structures to balance things out holistically and avoid disputes."

The critical insight, shared by multiple panelists, involves separating ownership from management. "The separation between ownership and management is absolutely critical," Calnan emphasized, addressing concerns about nepotism and ensuring that business leadership aligns with competence. "We see a very significant credibility issue for that person that comes into the family business in these amazing big roles when their business experience and their seniority within the family institution are not aligned."

Jorge Carstensen of Sophós Advisors highlighted captive insurance as an underutilized tool, noting that while over 80% of multinational companies employ captives, "they're still quite underutilized in Saudi Arabia and the broader region as a tool to protect assets and have more control within the risk management framework." When adequately structured within the family governance framework, captives can provide enhanced control while generating profits aligned with long-term succession objectives, all within "a regulated, very robust governance structure of a licensed insurance entity."

The Next Generation Challenge

No topic generated more discussion than preparing the next generation for leadership. Rawal observed that younger family members "are dealing much more on an international platform. That comes with greater scrutiny and greater exposure. They now have to think about how they can best understand a deal from start to finish—not just about going to an advisor, but actually understanding the workings behind that to see it through right to the end."

Salman celebrated this evolution: "The new generation is not following their father's or the family's path. They are pursuing their passions—whether it is in high tech, AI, agriculture, fashion design, or singing. They are doing what they believe they should be doing."

Tax and Real Estate: Emerging Considerations

While tax considerations have evolved from being a primary structuring driver to one element among many, compliance remains a crucial aspect. Calnan noted the shift: "If you asked me 15 years ago, tax would have been one of the primary drivers for setting up any offshore structure. Now it's very, very low on the agenda. What people are most concerned with is succession—making sure that shares pass to the people we want them to and that the business continues."

Zawawi highlighted that families are establishing internal tax teams to navigate transfer pricing, value-added tax, and withholding tax in an increasingly complex regulatory landscape. Carstensen emphasized that modern tax efficiency "isn't just about minimizing tax in isolation. It's really about building transparent, well-structured ownership that will stand scrutiny wherever that may be," given global reporting standards like BEPS and CRS.

Real estate emerged as an increasingly strategic asset class. Zawawi explained that property, traditionally held purely for preservation, now serves active income generation purposes: "As we move from generation to generation, you have more mouths to feed, so you have to make sure that all of your assets are generating income." He noted strong interest from multinational developers partnering with local developers on major commercial and residential projects, driven by the expanding housing market and hospitality sector.

Risk Management and Substance

Carstensen urged families to "hire the right people to help them first understand the risks that are really affecting their businesses throughout generations. Many of those risks are internal—that's where the problems are." He emphasized building real substance behind structures: "Whatever planning we're doing has to be very well-governed, very well-structured to withstand scrutiny, with substance and real governance. We document the decision-making for it to really withstand that scrutiny."

Conclusion: Execution Over Deliberation

The panel's consensus was clear: the groundwork has been laid, and now is the time for action. Calnan offered practical advice for those feeling overwhelmed: "It's a journey, so just make a start. That start can be something very minor, but once you've got a project you've started, it's then a project to be finished off."

As Rawal concluded: "Planning is done, strategy is done, building is done. Focus on execution. Capital has been deployed—now is the time to build so that in a few years, your execution is ready to realize the returns." For family businesses and international investors alike, the Kingdom's transformation presents unprecedented opportunities—but only for those prepared to govern effectively, structure their operations wisely, and execute decisions decisively.