Saudi Arabia Now Allows Foreign Investment In Listed Real Estate Companies In Makkah And Madinah

Saudi Arabia now allows foreigners to invest in listed companies that own real estate in Makkah and Madinah.
The Saudi Capital Market Authority (CMA) has announced that foreigners are allowed to invest in Saudi listed companies in the Saudi capital market that own real estate within the boundaries of the cities of Makkah and Madinah, starting from Monday, January 27.
This follows the approval of the Controls for the Exclusion of Companies Listed in the Saudi Stock Exchange (Tadawul) from the Meaning of the Phrase (Non-Saudi) in accordance with the Law of Real Estate Ownership and Investment by Non-Saudis.
Saudi real estate investment rules for foreigners
Through this announcement, the Capital Market Authority aims to stimulate investment, enhance the attractiveness and efficiency of the capital market, and strengthen its regional and international competitiveness while supporting the local economy.
This includes attracting foreign capital and providing the necessary liquidity for current and future projects in Makkah and Madinah through the investment products available in the Saudi market, positioning it as a key funding source for these distinctive developmental projects.
According to the approved controls, foreign investment in companies owning real estate within the boundaries of Makkah and Madinah will be limited to shares of these Saudi companies listed on the Saudi capital market, convertible debt instruments, or both.
However, the ownership of natural and legal persons jointly who do not hold Saudi nationality shall not exceed 49 per cent of the company’s shares.
An exception applies to strategic foreign investors, who are not permitted to own shares or convertible debt instruments in these companies.
The approved Controls allow non-Saudi investors to benefit from the economic advantages of existing and future projects without violating the relevant laws, regulations, and instructions, particularly the Law of Real Estate Ownership and Investment by Non-Saudis, whether during the companies’ operations or liquidation.
At the same time, according to the Controls, CMA grants Saudi listed companies the right to acquire ownership, easement, or usufruct rights over properties allocated for their headquarters or branch offices within Makkah and Madinah.
This is contingent upon the property being fully utilised for this purpose and in accordance with the Exclusion Controls exemption regulations under the Law of Real Estate Ownership and Investment by Non-Saudis.
The Capital Market Authority has undertaken, and continues to implement, numerous efforts and measures to enhance the attractiveness of the Saudi capital market and facilitate the entry of foreign investors, both directly and indirectly.

These efforts include:
- Allowing foreign residents to directly invest in the Saudi stock market
- Enabling foreign investors to access the market through swap agreements
- Permitting qualified foreign capital institutions to invest in listed securities
- Allowing foreign strategic investors to acquire strategic stakes in listed companies
- Enabling foreign investors to directly invest in debt instruments
These initiatives reflect the completeness and diversity of the capital market’s funding options available for projects in Makkah and Madinah.
In 2021, the Capital Market Authority (CMA) allowed non-Saudis to subscribe to real estate funds investing within the boundaries of Makkah and Madinah.
This move contributed to the reliance on the capital market as a diverse financing channel and supported the objectives of Saudi Vision 2030, which aims to make the Saudi capital market attractive to both local and foreign investments.
The approval of the Controls came after the CMA published on November 15, 2023, the “Regulations of Foreign Investors’ Ownership of Shares in Saudi Listed Companies that have Investment Properties in Makkah and Madinah” on the Unified Electronic Platform for Consulting the Public and Government Entities (Public Consultation Platform “Istitlaa”), affiliated with the National Competitiveness Canter (NCC), and the CMA’s website for public consultation for the purpose of approving the final text.
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