Sovereign Wealth Funds (SWFs) in the Middle East play a key role in economic diversification, reducing oil dependency, and ensuring long-term financial stability. These state-owned entities operate under legal frameworks that govern their investment strategies, risk management, and ownership structure, often aligning with national economic goals. Internationally, they follow the Santiago Principles for transparency and governance.
Middle Eastern SWFs, including those from Abu Dhabi, Qatar, Saudi Arabia, Kuwait, and Oman, are among the world's largest, heavily reliant on oil revenues. Legal challenges include balancing state control with transparency, complying with global financial regulations, and managing foreign investment restrictions. Reforms are enhancing governance and compliance, with a growing focus on sectors like renewable energy, technology, and infrastructure.
Looking ahead, SWFs are focusing on environmental, social, and governance (ESG) compliance, with governments promoting sustainable investments. Legal reforms are also addressing the rise of digital assets, fintech, and cryptocurrencies, while ensuring protections against sanctions and securing investments through bilateral treaties.
