What Is the Saudi Stock Exchange (Tadawul)?

The Saudi Exchange, commonly known as Tadawul, is the sole stock exchange in the Kingdom of Saudi Arabia and the largest capital market in the Middle East and North Africa. With a total market capitalisation exceeding SAR 10 trillion (approximately USD 2.7 trillion) and more than 390 companies listed across its Main Market and parallel Nomu market, Tadawul ranks among the ten largest stock exchanges in the world by market value.

Tadawul traces its origins to informal share trading in the 1930s, but the modern electronic exchange was formally established in 2007 as a joint-stock company under the oversight of the Capital Market Authority (CMA). The exchange is headquartered in Riyadh and operates the primary marketplace for equities, sukuk (Islamic bonds), exchange-traded funds (ETFs), real estate investment trusts (REITs), and derivatives.

For foreign investors, the Saudi stock market has undergone a transformational shift. As of February 1, 2026, the CMA abolished the Qualified Foreign Investor (QFI) framework entirely, opening direct market access to all categories of international investors without the qualification thresholds that had restricted participation since 2015.

This guide explains how the market works, how foreigners can open brokerage accounts and begin investing in Saudi Arabia, and what opportunities and risks to consider.

Key Market Indices: TASI and Nomu

The Tadawul All Share Index (TASI)

The TASI is the benchmark index for the Saudi stock market, tracking the performance of all companies listed on the Main Market. Established in 1985 with a base value of 1,000 points, the index has grown substantially over four decades. As of mid-March 2026, the TASI trades around the 10,900-point level.

The index is weighted by free-float market capitalisation, meaning that the largest companies by publicly tradeable shares exert the greatest influence on daily movements. Saudi Aramco, Al Rajhi Bank, and Saudi National Bank together account for a significant portion of the index weight.

Beyond the TASI, investors can track sector-specific sub-indices across 22 sectors, including Banks, Energy, Materials, Telecommunications, Utilities, Real Estate, and Healthcare. The MSCI Tadawul 30 (MT30) index tracks the 30 largest and most liquid stocks and serves as the basis for the exchange’s derivatives market.

The Nomu Parallel Market

Launched in February 2017, Nomu is Tadawul’s alternative equity market designed primarily for small and medium-sized enterprises (SMEs). Nomu has lighter listing requirements than the Main Market, making it easier for growing companies to raise capital. As of early 2026, approximately 80 companies trade on Nomu.

Key differences between Nomu and the Main Market include lower minimum capital requirements, reduced free-float thresholds, and simplified ongoing disclosure obligations. However, trading on Nomu is currently limited to qualified investors, including institutional investors and high-net-worth individuals. Foreign retail investors should note that Nomu access may carry additional eligibility requirements beyond standard Main Market access.

The 2026 QFI Removal: A Watershed Moment for Foreign Investors

On January 6, 2026, the CMA announced the abolition of the Qualified Foreign Investor (QFI) framework, effective February 1, 2026. This represents the most significant liberalisation of Saudi capital markets since the exchange was opened to foreign institutional investors in 2015.

What Changed

Under the previous QFI regime, foreign investors had to meet stringent eligibility criteria to trade directly on Tadawul. Institutional investors needed assets under management of at least SAR 1.875 billion (approximately USD 500 million), along with regulatory oversight requirements, operational track-record criteria, and ongoing compliance obligations. Individual foreign investors were effectively locked out of direct participation.

From February 2026, these barriers no longer exist. All categories of foreign investors, both institutional and individual, can invest directly in shares listed on the Main Market. The process now mirrors opening a brokerage account in most developed markets: complete know-your-customer (KYC) checks, open an account with an authorised Saudi broker, and begin trading.

Remaining Ownership Limits

While the QFI framework has been eliminated, certain foreign ownership caps remain in place. Individual non-resident foreign investors are limited to owning no more than 10% of any single listed company. The aggregate cap for all foreign investors in any single company stands at 49%. Some companies may impose lower strategic limits. These caps are designed to maintain Saudi control of strategically important entities while still welcoming international capital.

The CMA has also eliminated the framework for equity swap arrangements, which had historically been used by foreign investors to gain synthetic exposure to Saudi equities without direct ownership.

How to Open a Brokerage Account as a Foreign Investor

With the QFI removal, the process for international investors to access Tadawul has been significantly streamlined. Here is a step-by-step guide.

Step 1: Choose a Broker

Foreign investors must open an account with a brokerage firm licensed by the CMA and authorised as a Saudi Exchange member. The major Saudi brokerages include:

• SNB Capital (Saudi National Bank’s investment arm)
• Al Rajhi Capital
• SAB Invest (Saudi Awwal Bank, formerly HSBC Saudi Arabia)
• Riyad Capital
• Alinma Investment
• Aljazira Capital

For investors who prefer a global platform, Interactive Brokers (IBKR) launched direct access to Tadawul through a partnership with SNB Capital in late 2024. This allows IBKR clients worldwide to trade Saudi equities, REITs, and ETFs from the same unified account they use for other global markets.

Step 2: Complete KYC Documentation

You will need to provide standard identification documents, including a valid passport, proof of address, and in some cases proof of income or a bank reference letter. The documentation requirements are broadly consistent with international standards. Some brokers may require notarisation or apostille certification for documents originating outside the Kingdom.

Step 3: Open an Investor Account (NIN)

Once your brokerage application is approved, the broker will register you for a National Investor Number (NIN) with the Securities Depository Centre (Edaa). This unique identifier is required for all trading activity on the Saudi Exchange and serves as your central registry for share ownership.

Step 4: Fund Your Account

Transfer funds to your brokerage account. Trading on Tadawul is conducted in Saudi Riyals (SAR), which is pegged to the US dollar at a fixed rate of approximately SAR 3.75 per USD. This peg, maintained since 1986, eliminates currency risk for USD-based investors and significantly reduces it for others, making the Saudi market unusual among emerging markets for its currency stability.

Step 5: Begin Trading

Once your account is funded, you can place orders through your broker’s online trading platform or mobile application. Orders can be placed during regular trading hours or during the pre-open auction session.

Trading Hours, Settlement, and Fees

Trading Hours

Tadawul operates Sunday through Thursday, reflecting the Saudi working week. The market is closed on Fridays and Saturdays.

• Pre-open auction: 9:30 AM u2013 10:00 AM (Arabia Standard Time, GMT+3)
• Continuous trading: 10:00 AM u2013 3:00 PM AST
• Post-close auction: conducted after the regular session ends

The exchange is closed on Saudi national holidays, including Saudi National Day (September 23) and the Eid al-Fitr and Eid al-Adha religious holidays, which follow the Islamic lunar calendar.

Settlement Cycle

Tadawul operates on a T+2 settlement cycle for equities, meaning trades are settled two business days after execution. This is consistent with most major global exchanges, including the NYSE, LSE, and Euronext. Cash settlement and share delivery are handled by the Securities Depository Centre (Edaa), a subsidiary of the Saudi Tadawul Group.

Fees and Commissions

Trading costs on Tadawul include:

• Brokerage commission: Typically 0.105% to 0.155% of the transaction value, varying by broker and account size. Negotiated rates are available for high-volume traders.
• Tadawul trading fee: 0.00005 of the transaction value
• CMA fee: A small regulatory levy included in the total fee structure
• Edaa (depository) fees: Charged for custody and settlement services

Total all-in trading costs generally range from 0.12% to 0.18% per transaction, which is competitive with other major emerging market exchanges.

What Can You Invest In? Asset Classes on Tadawul

Equities

The Main Market hosts over 310 listed companies spanning 22 sectors. The market is dominated by a handful of large-cap names. Saudi Aramco, with a market capitalisation typically exceeding SAR 6.5 trillion (roughly USD 1.73 trillion), is by far the largest listing and one of the most valuable publicly traded companies globally. Other major constituents include Al Rajhi Bank, Saudi National Bank (SNB), SABIC (Saudi Basic Industries Corporation), Saudi Telecom Company (STC), and ACWA Power.

The key sectors by market weight include:

• Energy: Dominated by Saudi Aramco, the world’s largest oil producer
• Banks and Financial Services: Al Rajhi Bank, SNB, Riyad Bank, Banque Saudi Fransi, and Alinma Bank form a well-capitalised banking sector
• Materials and Petrochemicals: SABIC and its subsidiaries drive this sector, closely tied to the Kingdom’s hydrocarbon resources
• Telecommunications: STC Group leads this space, with Mobily and Zain as competitors
• Utilities and Renewables: ACWA Power has emerged as a major player in the global energy transition and a beneficiary of Saudi Arabia’s economic diversification

Exchange-Traded Funds (ETFs)

Tadawul lists a range of locally traded ETFs, including Shariah-compliant funds tracking the MSCI Tadawul 30 index and broader market benchmarks. For international investors who prefer to gain Saudi exposure through familiar platforms, two US-listed ETFs provide convenient access:

• iShares MSCI Saudi Arabia ETF (KSA): The largest and most liquid Saudi-focused ETF, with an expense ratio of 0.75%. As of mid-March 2026, KSA trades around USD 38 per share, with a dividend yield of approximately 2.8%. It tracks the MSCI Saudi Arabia IMI 25/50 Index.
• Franklin FTSE Saudi Arabia ETF (FLSA): A lower-cost alternative with an expense ratio of 0.39%, tracking the FTSE Saudi Arabia RIC Capped Index. FLSA is smaller in terms of assets under management but offers a cost-effective option for long-term investors.

These ETFs are particularly useful for investors who may not wish to open a Saudi brokerage account or who want to add Saudi exposure within an existing international portfolio.

Real Estate Investment Trusts (REITs)

Saudi Arabia introduced its REIT framework in 2016, and as of 2026 there are 17 listed REITs on Tadawul. These trusts invest in income-generating commercial real estate across the Kingdom, including office towers, retail malls, hospitality assets, and logistics warehouses.

Saudi REITs are required to distribute at least 90% of their net income to unitholders annually, making them attractive for income-focused investors. Notable listed REITs include Jadwa REIT Saudi Fund, MEFIC REIT, Riyad REIT, and Al Rajhi REIT.

The sector has seen growing institutional interest, with major acquisition activity in early 2026. MEFIC REIT, for example, signed agreements in March 2026 to acquire properties in Jeddah and Makkah valued at SAR 815 million.

Sukuk (Islamic Bonds)

Tadawul hosts a significant sukuk market, offering Shariah-compliant fixed-income instruments. Saudi Aramco, the Saudi government, and major corporates regularly issue sukuk, providing investors with income-generating alternatives to equities. The sukuk market has deepened considerably as part of the Financial Sector Development Program under Vision 2030.

The IPO Pipeline: What Is Coming to Market

Saudi Arabia’s IPO pipeline for 2026 is among the most active globally. The CMA had approximately 40 IPO applications under review at the end of 2025, spanning sectors including energy, healthcare, financial services, real estate, mining, and technology.

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, is expected to be particularly active, with as many as eight portfolio companies earmarked for potential listings. Companies reportedly in the pipeline include Saudi Information Technology Company (Site), a PIF-backed cybersecurity and cloud subsidiary; Saudi Global Ports; Alkhorayef Petroleum; events management company Sela; and online grocery platform Ninja, which reached unicorn status with a USD 1.5 billion valuation in 2025.

The elimination of QFI requirements is expected to boost IPO demand by broadening the investor base and increasing international participation in book-building processes. Analysts project 20 to 30 IPO executions on Tadawul in 2026.

Key Risks and Considerations

Oil Price Sensitivity

Despite significant diversification efforts under Vision 2030, Saudi Arabia’s economy and fiscal position remain closely linked to global oil prices. Saudi Aramco alone accounts for a dominant share of the TASI index weight. A sustained decline in crude prices would likely weigh on government revenues, corporate earnings, and broader market sentiment.

Geopolitical Risk

The wider Middle East region carries inherent geopolitical risk. The ongoing conflict involving Iran and regional tensions can create periods of elevated volatility. Investors should factor in the potential for supply disruptions, shifts in energy policy, or regional security events affecting market performance.

Liquidity Considerations

While TASI’s largest constituents are highly liquid, many mid-cap and small-cap stocks trade with lower daily volumes. Nomu-listed companies, in particular, can be thinly traded. Investors should exercise caution with position sizing in less liquid names and consider using limit orders rather than market orders.

Corporate Governance and Transparency

Saudi Arabia has made substantial progress in corporate governance standards, particularly since the CMA was established in 2003. However, some companies, especially family-controlled conglomerates, may have governance practices that differ from Western norms. Investors should review ownership structures, related-party transaction disclosures, and board independence before committing capital.

Currency Risk (Minimal)

The Saudi riyal’s peg to the US dollar at SAR 3.75 per USD largely eliminates currency risk for dollar-based investors. For investors denominated in euros, pounds, or other currencies, the primary currency risk is exposure to the USD rather than to the riyal specifically.

Tax Environment

Saudi Arabia does not impose personal income tax on investment gains or dividends for individual investors. There is no capital gains tax on listed securities for either Saudi or foreign investors. However, a 5% withholding tax may apply to dividends paid to non-resident foreign investors in certain structures. Corporate investors may be subject to different tax treatment. Investors should consult tax advisers in their home jurisdiction regarding reporting obligations.

Practical Tips for Foreign Investors

Start With Liquid Blue Chips

New entrants to the Saudi market should consider beginning with the largest, most liquid names on the TASI. Saudi Aramco, Al Rajhi Bank, SNB, STC, and SABIC offer deep liquidity, extensive analyst coverage, and well-established investor relations programmes. These companies report in both Arabic and English and follow international financial reporting standards (IFRS).

Use ETFs for Diversified Exposure

For investors who want broad Saudi exposure without selecting individual stocks, the iShares MSCI Saudi Arabia ETF (KSA) or the Franklin FTSE Saudi Arabia ETF (FLSA) offer single-trade access to a diversified basket of Saudi equities through US-listed instruments.

Mind the Calendar

Tadawul trades Sunday to Thursday. This means the Saudi market is open on days when Western markets are closed (Sunday) and closed when they are open (Friday and Saturday). Additionally, Islamic holiday closures for Eid al-Fitr and Eid al-Adha can result in extended market closures of a week or more.

Monitor the MSCI and FTSE Index Rebalancing

Saudi Arabia is included in the MSCI Emerging Markets Index and the FTSE Russell Emerging Markets Index. Periodic rebalancing of these indices can drive significant passive fund flows into or out of Saudi equities, creating short-term price dislocations that active investors may wish to monitor or exploit.

Understand Shariah Compliance

A large proportion of Saudi-listed companies are considered Shariah-compliant, and several locally listed ETFs follow Islamic investment principles. For investors seeking Shariah-compliant exposure, Saudi Arabia offers one of the deepest pools of compliant equities globally. The CMA and individual fund managers publish regular Shariah compliance screening results.

How Tadawul Fits Into a Global Portfolio

Saudi Arabia occupies a unique position in the emerging markets landscape. It is a top-ten global stock exchange by capitalisation, yet until February 2026, it was one of the most restricted major markets for foreign retail investors. The QFI removal has changed this equation fundamentally.

For portfolio construction purposes, Saudi equities offer several distinctive attributes: low correlation with developed market indices during certain market regimes, direct exposure to global energy markets through Saudi Aramco, currency stability via the dollar peg, and growing exposure to Vision 2030 diversification themes including tourism, entertainment, technology, and renewable energy.

With the CMA projecting that foreign ownership of Saudi equities will continue rising from its current levels, and with the exchange actively pursuing higher weightings in MSCI and FTSE indices, Tadawul is positioning itself as an unavoidable allocation for global emerging market investors.

Investors looking to establish a physical presence in the Kingdom should review our company formation guide for the step-by-step process of setting up a Saudi entity.

For context on the forces driving Tadawul’s growth, see our Vision 2030 analysis. Investors should also review the Saudi tax guide to understand Zakat, withholding tax, and CIT implications for equity returns.

The combination of a robust IPO pipeline, deepening liquidity, regulatory modernisation, and full foreign access makes 2026 a pivotal year for the Saudi stock market and for international investors looking to participate in the Kingdom’s economic transformation.