Saudi Arabia opens Makkah and Medina property investments to foreigners

The Saudi Arabia market regulator announced on Monday that foreign investors are now allowed to invest in listed Saudi companies that own properties in the cities of Makkah and Medina. This comes after the approval of the Controls that exclude companies listed on the Saudi Stock Exchange (Tadawul) from being classified as ‘non-Saudi’ under the law of Real Estate Ownership and Investment by non-Saudis. This move aims to boost global investment and improve liquidity for projects in these significant religious cities.

The Capital Market Authority (CMA) specified that foreign investment will be limited to shares, convertible debt instruments or both. However, non-Saudis will be restricted from owning more than 49% of the shares in such companies.

The approved controls enable non-Saudi investors to take advantage of the economic benefits from current and future projects while ensuring compliance with relevant laws, regulations and guidelines, particularly the law of real estate ownership and investment by non-Saudis, both during the companies’ operations and in the event of liquidation.

The CMA allows Saudi-listed companies the right to acquire ownership, easement or usufruct rights over properties designated for their headquarters or branch offices in Makkah and Madinah, provided the property is fully used for this purpose and in line with the Exclusion Controls exemption regulations under the Law of Real Estate Ownership and Investment by non-Saudis.

Makkah and Madinah welcome millions of Muslims from all over the world to perform Hajj and Umrah, with these religious events contributing as a major revenue source for the kingdom.

Back in 2021, the CMA opened the doors for non-Saudis to invest in real estate funds focused on Makkah and Madinah. This decision strengthened the capital market as a versatile financing option and aligned with the goals of Saudi Vision 2030, which seeks to make the Saudi capital market a magnet for both domestic and international investments.