Saudi Arabia announced today that foreigners are now 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 today.
In a statement, the Saudi Capital Market Authority (CMA) said: “This announcement follows the approval of the Controls for the Exclusion of Companies Listed in the Saudi Stock Exchange from the Meaning of the Phrase (Non-Saudi) in accordance with the Law of Real Estate Ownership and Investment by Non-Saudis.”
Ownership to not exceed 49 percent of the company’s shares
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 percent 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.
Through this announcement, Saudi Arabia’s 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 Saudi Arabia’s market, positioning it as a key funding source for these distinctive developmental projects.
#Announcement | To Stimulate Investment and Support the National Economy, the Capital Market Authority Announces:
Allowing Foreign Investment in Real Estate Listed Companies Operating in Makkah and Madinahhttps://t.co/urf8chippA pic.twitter.com/pP4kNkmfr9— Capital Market Authority (@SaudiCMA_En) January 27, 2025
CMA grants right to acquire ownership of headquarters, branch offices
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 utilized for this purpose and in accordance with the Exclusion Controls exemption regulations under the Law of Real Estate Ownership and Investment by Non-Saudis,” added CMA.
Read: UAE inks $6 billion investment deal to establish development projects in Georgia
CMA facilitates entry of foreign investors
Saudi Arabia’s National Investment Strategy is targeting FDI of $100 billion by 2030, or almost 6 percent of Saudi Arabia’s GDP. For its part, the CMA has undertaken and continues to implement, several 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, and permitting qualified foreign capital institutions to invest in listed securities.
The CMA also allows foreign strategic investors to acquire strategic stakes in listed companies and enables 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 CMA also 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.
