Saudi tightens foreign property access

Saudi Arabia has set fresh procedural rules for non-resident foreign companies seeking to own real estate in the Kingdom, adding a clearer registration path as Riyadh widens access to its property market while keeping tighter oversight of who buys, where they buy and under what legal status.

The updated requirements, reflected in the Investor Guide 2026 and the broader non-Saudi real estate ownership framework, apply to foreign companies that have no physical presence in the Kingdom and do not conduct commercial activity there, but still wish to acquire property. Such entities must first register through the Ministry of Investment’s Invest Saudi platform and obtain a Unified Number 700 before proceeding with ownership applications through the Saudi Properties digital portal.

The measure marks another step in Saudi Arabia’s attempt to balance foreign capital inflows with regulatory control over a sector central to Vision 2030. Real estate has become a critical pillar of the Kingdom’s economic diversification drive, with large-scale residential, tourism, commercial, industrial and urban redevelopment projects requiring international developers, institutional investors, funds and corporate occupiers.

The framework separates property ownership from active business operations, allowing foreign companies to pursue real estate acquisition without automatically treating that ownership as commercial activity in the local market. At the same time, registration before acquisition gives authorities a clearer view of beneficial ownership, legal identity and compliance status before any transaction is completed.

The Real Estate General Authority remains the central regulator for the ownership system, while the Ministry of Investment, Ministry of Justice, Capital Market Authority and other agencies have roles in registration, licensing, capital-market-linked vehicles and property registry procedures. Ownership becomes legally valid only after registration with the Real Estate Registry under the applicable rules.

Saudi Arabia’s updated law, which came into force in January 2026, covers non-Saudi individuals, companies, non-profit entities and other legal persons approved by the Council of Ministers. It permits ownership or acquisition of real rights within designated geographical zones determined by the Council of Ministers on proposals from the Real Estate General Authority and approval from the Council of Economic and Development Affairs.

The rules are not a blanket opening of the market. Geographical scope, ownership percentages, categories of property rights, usufruct periods and other controls are determined through official zone documents and implementing regulations. Riyadh, Jeddah, Makkah and Madinah are treated under specific regulatory controls, with additional sensitivity around ownership in the two holy cities.

Foreign ownership in Makkah and Madinah remains subject to stricter treatment. Ownership rights there are limited under the law, with provisions distinguishing between Muslim individuals, Saudi-incorporated companies with foreign participation, listed companies, licensed funds and other regulated structures. These limits reflect the religious and social character of the two cities as well as the state’s wider policy control over strategic urban areas.

Companies incorporated under Saudi Companies Law but partly owned by non-Saudi shareholders may own property within designated zones, including Makkah and Madinah, subject to the law and implementing rules. Such companies may also own property needed for their activities or employee housing, including outside designated zones where the regulations permit. Listed companies, licensed investment funds and special purpose entities are governed through Capital Market Authority rules in coordination with the real estate regulator.

The law also introduces stronger enforcement provisions. Violations may lead to warnings or fines of up to 5 per cent of the value of the relevant real right, capped at SAR10 million. Deliberately submitting false or misleading information can trigger similar financial penalties and may result in compulsory sale of the property right linked to the violation.

A separate fee may be imposed on the disposal of real estate rights by non-Saudis, with a ceiling of 5 per cent of the value of the transaction, in addition to any taxes or fees prescribed under other laws. Implementing regulations are expected to determine fee levels based on the type and purpose of the right, the asset category and the geographical area.

The changes come as Saudi Arabia seeks to deepen market transparency ahead of a heavy project pipeline tied to tourism, logistics, housing and global events. Riyadh is expanding as a regional corporate hub, Jeddah is drawing hospitality and waterfront investment, and giga-projects linked to the Public Investment Fund continue to shape demand for development expertise and long-term capital.

Foreign investors are likely to welcome a formal route that reduces uncertainty over eligibility and procedure. The requirement to register before ownership, however, also signals that the Kingdom is prioritising traceability and policy control over a freehold model resembling more liberal Gulf property markets.