Acknowledging the need to attract foreign capital for upcoming real estate developments in Makkah and Madinah, the Saudi Capital Market Authority (CMA) announced the immediate lifting of selected foreign investment limits for these two cities from the 27th January 2025.
“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 … without violating the relevant laws, regulations and instructions.
“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.”
The CMA said such foreign investment will be limited to shares of these Saudi companies listed on the local capital market, convertible debt instruments or both – positioning it as a key funding source by attracting foreign capital and providing the necessary liquidity for current and future projects.
Ownership by non-Saudi nationals shall not exceed 49% of the company’s shares. But foreign investors are not permitted to own convertible debt instruments in these companies.
The CMA further granted 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 liberalization comes after foreign residents were allowed 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 and enabling foreign investors to directly invest in debt instruments.
In 2021, the CMA allowed non-Saudis to subscribe to real estate funds investing within the boundaries of Makkah and Madinah.
