The Kingdom of Saudi Arabia’s real estate sector has been undergoing significant transformation as part of its wider Vision 2030 strategy and a vital aspect of this is to deliver world-class real estate opportunities to foreign investors.
The Kingdom's real estate market is heavily influenced by the country’s economic strategy, Sharia law, and its push for modernisation. The Real Estate laws in Saudi are governed by the Saudi Civil Code and various regulations set by the regulatory authorities to regulate property ownership, leasing and land use. The Kingdom's legal landscape seeks to integrate Islamic principles into modern legal concepts, aiming to streamline transactions and promote economic growth. The developing land registry system is primarily governed by the Real Estate General Authority (REGA) and the Real Estate Registry (RER) under the Ministry of Justice. Other key authorities include the Ministry of Housing, municipal authorities, and the Ministry of Investment. This is to ensure the secure, transparent and organised management of real estate ownership, transactions and development in line with other Gulf countries. We will discuss aspects of the regulatory framework in other articles.
Historically, foreign ownership of real estate in the Kingdom was subject to strict limitations, with access largely restricted to its nationals. Successive regulatory developments have opened new opportunities and flexibility for foreign investors and individuals, reflecting the government’s commitment to attracting international capital and diversifying the economy, the most recent of which was introduced in January 2025 and relates to Mecca and Medina.
Categories of Foreign Ownership
Foreign ownership in Saudi is broadly divided into two categories:
- GCC Nationals and Companies – meaning Gulf Cooperation Council (GCC) citizens or companies domiciled within a GCC country and wholly owned by GCC nationals; and
- Non-GCC Companies and Individuals – this includes non-GCC foreign nationals, companies domiciled outside the GCC, and entities owned by non-GCC nationals.
GCC Nationals and companies
GCC entities are permitted to own and lease real estate in Saudi on the same terms as Saudi nationals, subject to the following conditions:
- If the property is land, the land must be developed or utilised within four years from the date of registration of ownership, but this may be extended; and
- The land cannot be disposed of within this period unless it has been fully developed or utilised.
GCC nationals and businesses benefit from more favourable real estate ownership rights in the Kingdom compared to other foreign nationals, investors and companies.
Foreign Nationals and companies
Previously, foreign nationals and companies faced restrictions when seeking to acquire property in Saudi. The law now allows foreign individuals and companies to own property (outside of Mecca and Medina), subject to regulatory approval and investment conditions.
Foreign companies and individuals operating in the Kingdom can now:
- own the real estate necessary for their commercial operations (subject to obtaining all other relevant company licencing requirements and regulatory approvals), including office spaces, employee housing, and operational facilities (this is not intended therefore to permit the commercial trading of real estate); and,
- (provided the relevant licence permits the same), own real estate for property development and investment, in which case the total investment must not be less than thirty million Saudi Riyals and any development must be completed within five years from the date of property acquisition.
In addition, foreign individuals with a residency permit can own property for their own residence, after obtaining a licence from the Ministry of Interior and holders of a premium residency visa may own real estate for residential, commercial and industrial purposes (excluding Mecca, Medina) and obtain usufruct of real estate in Mecca and Medina for up to 99 years.
Regulatory approvals and criteria
Foreign ownership remains subject to regulatory oversight and foreign individuals and companies seeking to acquire property in the Kingdom must ensure they keep the following in mind:
- Foreign individuals must hold a valid residence permit;
- Foreign companies must hold the relevant business license(s).
- Depending on the property’s location, approvals from the Ministry of Interior or other relevant authorities may be required;
- Commercial investors must demonstrate financial capacity to meet minimum investment requirements; and
- Comprehensive documentation detailing the property and its surroundings must be submitted.
Foreign Ownership and Investment: Mecca and Medina
Property ownership in Mecca and Medina is in the main restricted to Saudi nationals. The new Controls for the Exclusion of Companies Listed in Saudi Stock Exchange introduced by Saudi's Capital Market Authority (CMA) in January 2025 relax some prior restrictions, effectively allowing a degree of foreign investment.
Saudi companies listed in the Saudi Stock Exchange (Tadawul) are permitted to own real estate in Mecca and Medina:
- where such properties are allocated for and used only as their headquarters or branches (more or less as previously permitted), or
- where such properties are used for other purposes, provided that in such cases, any foreign shareholding in such listed company does not exceed 49% of the shares or convertible debt instruments in the company in aggregate.
Conclusion: A new era for international investors in Saudi Arabia
The ongoing reforms to the Kingdom's real estate ownership framework offer opportunities for foreign investors while maintaining regulatory oversight aligned with national economic objectives.
The liberalisation and continuing modernisation of the Kingdom's foreign ownership laws represent significant milestones in the country’s economic transformation. These changes not only enhance the attractiveness of the Kingdom's real estate market but also create new pathways for international investors to participate in local development and infrastructure projects.
While these reforms signal greater openness, navigating the regulatory framework remains complex as it requires deep knowledge of both the country's legal framework and its cultural nuances. Foreign investors and companies looking to acquire or invest in property in the Kingdom should ensure compliance with the applicable legal and procedural requirements and an understanding of the regulatory landscape. As that landscape continues to evolve, staying informed and seeking expert guidance will be key to successfully capitalising on the opportunities within this dynamic market. For further insights or legal advice on foreign real estate ownership in the Kingdom, please contact our International Real Estate Team at Trowers & Hamlins.
