With operations spanning six countries and eight key offices, and a legacy of over four decades handling complex business and investment legal mandates across Saudi Arabia and the GCC, Abdulrahman Hammad, Partner at Hammad & Al Mehdar Law Firm, offers expert insights shaped by deep involvement in regional investment structuring and evolving regulatory frameworks.
Saudi Arabia’s investment momentum is reshaping capital flows across the region yet many investors still treat structuring as a technical step rather than a strategic foundation despite recurring governance failures and misalignment impacting private equity private credit and cross border investments.
A region moving faster than its structures
From our work across GCC countries including Saudi Arabia, one pattern is consistent. Capital is moving faster than the structures designed to support it. This gap rarely disrupts deals at entry. It shows up later, when timing, control, and alignment start to matter.
Most structuring failures are invisible at formation. They surface at exit, when they are most expensive to fix.
Across the GCC, this is becoming a defining issue. As deal volume increases and investor profiles become more complex, the cost of weak structuring is no longer theoretical. It is measurable in delays, reduced valuations, and missed opportunities.
Structuring is still being misunderstood
Across GCC markets, structuring is still frequently treated as a documentation exercise. In practice, it determines how an investment behaves under pressure.
Image supplied by Hammad & Al Mehdar Law Firm
This becomes clear when fund managers enter Saudi Arabia or other GCC jurisdictions using global templates with minimal local adaptation. While these structures may satisfy initial regulatory requirements, they often fail to reflect jurisdiction-specific realities, particularly around governance expectations, tax considerations, and investor behaviour.
A structure that appears efficient on paper can become restrictive in practice, limiting flexibility at precisely the moment when responsiveness is required.
Where structuring failures actually emerge
Structuring issues rarely appear early. They emerge at critical inflection points, where decisions must be taken quickly and alignment is tested.
Globally, private equity holding periods have extended to 5-7 years, often driven not just by market conditions but by execution challenges, including governance friction at exit. In cross-border transactions, regulatory processes can add 20-30% to timelines, a factor that becomes particularly relevant in GCC investments spanning multiple jurisdictions.
From our experience across Saudi Arabia and the wider GCC, three recurring scenarios stand out:
Exit friction driven by governance gaps In Saudi Arabia, unclear reserved matters or impractical approval thresholds can delay exit processes. In competitive transactions, even short delays can shift negotiation leverage and reduce final valuations.
Investor misalignment after capital deployment
Alignment between general partners and limited partners is often assumed at the outset. In reality, it is tested only after capital is deployed. Where governance frameworks lack precision, disagreements over follow-on investments, portfolio strategy, or exit timing become difficult to resolve without affecting performance.
Cross-border structural breakdowns
Funds operating across GCC jurisdictions frequently encounter regulatory inconsistencies. A structure that functions efficiently in the UAE may face delays or constraints in Saudi Arabia due to differing approval processes and investor requirements.
These are not isolated issues. They reflect a broader pattern, structuring decisions made early without sufficient attention to execution realities.
Governance is the real control layer
epresentational Image | Source: EM’s FP | Cropped by Team GBN
In GCC countries including Saudi Arabia, governance is not simply a legal framework. It is the system through which decisions are made under real conditions.
Reserved matters, voting rights, and control provisions determine how quickly and effectively a fund can respond to opportunities and risks. Yet, in practice, governance is often pushed to extremes.
Overly restrictive frameworks, often driven by institutional or government-linked investors, can limit agility
Overly permissive frameworks can expose investors to decisions without adequate oversight, and ones that may pressure the initial alignment between GPs and LPs to a break
Effective governance requires balance. From our experience, well-structured frameworks share common characteristics:
Clearly articulated strategies covering investing, holding, and exiting
Clearly defined decision thresholds aligned with material risks
Approval processes that are realistic in timing and execution
Alignment between control rights and economic exposure
Built-in flexibility to adapt to evolving market conditions
In Saudi Arabia, where investor bases often include a mix of institutional, private, and government-linked entities, achieving this balance is particularly critical.
Private credit is raising the stakes
The growth of private credit across the GCC is adding a new layer of complexity to fund structuring.
Unlike private equity, private credit structures must hold up not only commercially but also legally, particularly in enforcement scenarios. This introduces additional considerations:
Security enforceability under local law
Creditor rights and recovery processes
Practical timelines for dispute resolution
In Saudi Arabia, we have seen situations where credit structures that appear robust commercially encounter challenges during enforcement due to misalignment with local legal procedures. Similar issues arise across other GCC jurisdictions, where differences in legal systems impact execution, not just documentation.
Private credit is not just an extension of private equity. It requires a fundamentally different approach to structuring.
GCC markets are not structurally uniform
Representational Image | Source: EM’s FP | Cropped by Team GBN
A common misconception is that GCC markets operate under broadly similar structural conditions. In reality, they differ significantly.
Saudi Arabia offers scale and rapid regulatory evolution, but requires careful alignment with local frameworks and approval processes.
UAE provides relatively mature fund structures, yet operates under distinct regulatory expectations that influence structuring choices, especially where security is involved given its network of freezonesand regulatory spheres.
Other GCC markets, including Bahrain and Qatar, often introduce additional considerations around market size, regulatory interpretation, and investor concentration.
These differences matter. A structure designed for one jurisdiction does not automatically translate into another. At the same time, it is common for a fund manager, a borrower, or a target to hold assets across the jurisdictions.
In cross-border GCC investments, even small misalignments, such as differences in approval timelines or regulatory interpretation, can create friction that affects execution and performance.
What investors continue to underestimate
Across GCC countries including Saudi Arabia, three consistent gaps remain.
Regulatory evolution
Frameworks are evolving quickly. Structures that lack flexibility can become restrictive within a short period.
Execution reality
Understanding how regulations are applied in practice is as important as understanding the rules themselves. Local investor expectations and regulatory behaviour play a critical role.
Governance impact
Governance is often treated as secondary to economics. In reality, it determines how investments perform when conditions change.
These are not theoretical considerations. They are recurring issues observed across transactions.
Institutional depth behind the insights
These perspectives are shaped within a firm with over four decades of experience in the region. Founded in 1983 by Dr. Adli Hammad, Hammad & Al Mehdar Law Firm has played a role in complex transactions, regulatory advisory, and dispute resolution across Saudi Arabia and the GCC.
Dr. Adli Hammad, a former legal advisor to Saudi ARAMCO and current President of the OPEC Court of Appeal, continues to shape the firm’s strategic direction, reinforcing its depth in navigating regional legal complexities.
Final perspective
Representational Image | Source: EM’s FP | Cropped by Team GBN
GCC markets, including Saudi Arabia, present significant opportunities for private capital. However, these opportunities come with structural demands that cannot be overlooked.
From our experience, the difference between successful and underperforming investments is rarely the strategy alone. It is the structure behind it.
In this region, speed of capital is increasing, but speed without structure creates risk.
Investors and fund managers who treat structuring as a strategic discipline, rather than a legal formality, are the ones most likely to navigate complexity effectively and deliver consistent outcomes.
About Abdulrahman Hammad: Building on nearly seven years of experience at Saudi Aramco as a Financial Analyst and Legal Counsel, and prior experience at New York-based White & Case LLP, Abdulrahman Hammad joined Hammad & Al Mehdar Law Firm in 2015 and progressed into the firm’s leadership as a Partner.
With over a decade of experience, he advises regional and international clients on investment transactions, including fund establishment, private equity, private credit, venture capital, and financial regulations. His work focuses on fund origination, investment structuring, and advisory for fund managers, institutional investors, and government-linked investment arms across Saudi Arabia and the wider MENA region, combining legal rigor with a commercially driven investment perspective shaped by his background in international finance and cross-border transactions.
