Saudi Arabia Opens Doors to Foreign Investment in Makkah and Madinah Real Estate
Saudi Arabia has announced a significant policy change allowing foreign investors to engage in the real estate market within Makkah and Madinah.
This initiative, effective immediately, permits foreign investment in Saudi-listed companies that own real estate in these holy cities.
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The Saudi Capital Market Authority (CMA) stated that this move follows the approval of regulations that clarify the meaning of “Non-Saudi” companies under the Law of Real Estate Ownership and Investment by Non-Saudis.
Ownership Limitations
Under the new regulations, foreign ownership in these companies is capped at 49 percent of the total shares.
However, strategic foreign investors are excluded from holding shares or convertible debt instruments in these companies.
This framework aims to ensure that non-Saudi investors can reap the economic benefits of existing and future projects while adhering to local laws.
Enhancing Investment Appeal
The CMA’s decision seeks to invigorate the capital market, making it more attractive and competitive on a regional and international scale.
By facilitating foreign capital influx, the initiative aims to provide essential liquidity for ongoing and upcoming projects in Makkah and Madinah, establishing the capital market as a vital source of funding for these unique developmental endeavors.
Acquisition Rights for Listed Companies
Additionally, the CMA has granted Saudi-listed companies the authority to acquire ownership, easement, or usufruct rights over properties designated for their headquarters or branch offices in Makkah and Madinah.
This is contingent upon the properties being fully utilized for these purposes and aligns with existing regulations.
Supporting Economic Growth
Saudi Arabia’s National Investment Strategy aims to attract $100 billion in foreign direct investment (FDI) by 2030, equating to approximately 6 percent of the country’s GDP.
The CMA is actively implementing measures to bolster the capital market’s appeal to foreign investors, including enabling foreign residents to invest directly in the stock market and allowing qualified foreign institutions to participate in listed securities.
In 2021, the CMA also permitted non-Saudis to subscribe to real estate funds focused on investments within Makkah and Madinah.
These efforts align with the broader objectives of Saudi Vision 2030, which seeks to enhance the attractiveness of the Saudi capital market for both local and international investments.
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