Adoption of regulations governing corporate ownership of real estate in Saudi Arabia, Mecca, and Medina
In a strategic move aimed at deepening the Saudi financial market and enhancing its investment appeal, the Capital Market Authority (CMA) has adopted new regulations governing real estate ownership within the Kingdom of Saudi Arabia by companies listed on the Saudi Stock Exchange (Tadawul), investment funds, and special purpose vehicles (SPVs). This landmark decision includes allowing ownership in the holy cities of Mecca and Medina, and will take effect concurrently with the implementation of the regulations governing non-Saudi ownership of real estate, issued by Royal Decree No. (M/14) dated 19/1/1447 AH.
A fundamental shift in the real estate investment environment
These new regulations replace previous regulations that exempted listed companies from the definition of "non-Saudi," in accordance with the Capital Market Authority's Board resolutions issued in January 2025. This regulatory update is part of a series of broad legislative reforms underway in the Kingdom. The approved project aims to establish a clear legal framework for real estate ownership by financial entities established under the Companies Law, ensuring the acquisition of real estate rights in various regions of the Kingdom, including the Holy Sites.
The economic context and the importance of the decision
This step is of exceptional importance given the Kingdom's overall economic context and Vision 2030, as Saudi Arabia seeks to diversify its sources of income and reduce its dependence on oil by stimulating non-oil sectors, particularly real estate and finance. Allowing listed companies and investment funds to own real estate in Mecca and Medina opens up vast opportunities for injecting substantial liquidity into the real estate market and enhances the development of high-quality projects that serve visitors to the Grand Mosque and the Prophet's Mosque, which will positively impact the gross domestic product.
Enhancing market efficiency and international competitiveness
According to the Authority, these regulations will directly contribute to enhancing the efficiency of the financial market and raising its competitiveness regionally and internationally. By clarifying ownership mechanisms, the Saudi market becomes more attractive to international investors seeking a transparent and stable regulatory environment. The Authority also emphasized that these regulations do not affect the commitment of foreign investors and listed companies to relevant laws and regulations, thus maintaining regulatory consistency and enhancing the clarity of the legal framework.
Keeping pace with rapid growth
These regulations coincide with the issuance of the new real estate ownership law for non-Saudis, which will come into effect in January 2026. The Capital Market Authority (CMA) expects these provisions to stimulate institutional investment and improve foreign capital inflows into the Saudi financial market, thereby supporting the accelerated growth of the real estate sector and achieving the objectives of the Financial Sector Development Program, one of the programs under Saudi Vision 2030.
