Islamic Finance Advisory in Riyadh | Sharia-Compliant by Design

Islamic financing structures need to satisfy Sharia compliance requirements from the outset of a transaction's design, not as a check applied afterward to an already-negotiated conventional structure, since retrofitting compliance onto a completed deal is far harder than building it in from the start.

The problems we're usually called in to fix

What we typically hear

Sharia compliance is being applied as a check after the structure is already negotiated
Retrofitting compliance onto a completed deal is proving far harder than expected
The transaction's design didn't account for Sharia requirements from the outset
No one considered compliance until deep into the negotiation

How we approach it

Sharia compliance built into the transaction's design from the outset
Structures that satisfy requirements from day one, not retrofitted later
Compliance treated as part of the deal's architecture, not a final check
A structure that avoids the far harder work of fixing a completed deal

Islamic Finance Advisory

A transaction structured on conventional terms first and adjusted for Sharia compliance later, whether negotiated in Olaya or KAFD, is always harder to fix than one designed for compliance from the outset.

This connects directly to bank financing work, since many Saudi banks offer Islamic structures as the default or preferred option for corporate facilities rather than a conventional facility with an Islamic label simply attached to it.

Why retrofitting compliance doesn't actually work

A murabaha, ijara, or other Islamic structure changes the actual mechanics of a transaction, asset ownership, payment timing, risk allocation, not just its label. A deal negotiated on conventional commercial terms and then dressed up as Islamic afterward often fails Sharia board scrutiny or creates commercial terms nobody actually intended when the underlying structure gets corrected.

The common structures and when each genuinely fits

Murabaha, a cost-plus sale structure, suits straightforward asset or working capital financing. Ijara, a lease-based structure, suits equipment or real estate financing where a genuine identifiable asset exists. Istisna suits construction or manufacturing financing where the asset being financed doesn't exist yet. Matching the structure to the actual underlying transaction matters far more than defaulting to whichever structure happens to be most familiar.

A common Saudi scenario

An Riyadh industrial company financing new equipment often finds an ijara structure fits naturally, given the equipment is a genuine, identifiable asset. A Riyadh trading company financing inventory purchases more often fits naturally into a murabaha structure instead, given the nature of what's actually being financed.

What we deliver

Structuring support that builds Sharia compliance into the transaction design from the start rather than as an afterthought, coordinated with the financing bank's own Sharia board requirements, connecting to sukuk advisory for larger capital markets transactions and debt advisory for overall debt structure decisions.

Working with the bank's Sharia board from the outset

Rather than presenting a fully negotiated deal to the bank's Sharia board for approval at the end, we recommend involving that review earlier in the structuring process, since a board's specific concerns are far easier to address while terms are still flexible than after commercial agreement has already been reached.

Local context

Riyadh industrial financing tends to fit naturally into asset-based structures like ijara given the genuine physical assets involved, while Riyadh trading finance more often fits murabaha structures given the underlying transactions are typically goods purchases rather than long-term asset use.

Islamic Finance Advisory, answered

Is Islamic financing more expensive than conventional financing?

Not inherently, though pricing depends on the specific structure and lender, and the two approaches are increasingly comparable in cost for standard transaction types at most Saudi banks.

Do all Saudi banks require Islamic structures?

No, most offer both conventional and Islamic options, and the choice often comes down to the client's own preference or the specific structure that best fits the underlying transaction being financed.

How is Sharia compliance actually verified?

Through the financing bank's own Sharia supervisory board, which reviews and approves the specific structure and documentation before the transaction proceeds, rather than a general compliance certification applied after the fact.

Islamic Finance Advisory in Riyadh | Sharia-Compliant by Design

At a glance

The problems we're usually called in to fix

What we typically hear

How we approach it