Saudi Arabia permits foreigners to invest in listed property companies in holy cities 

Saudi Arabia has said that it will allow foreigners to invest in publicly-traded companies owning real estate in the holy cities of Makkah and Madinah, in a move design to attract additional overseas investment.  

Foreigners will be able to invest in shares and convertible debt instruments in companies listed on the Saudi capital market that own real estate within the boundaries of the two holy cities, the Saudi Capital Market Authority (CMA) said in a statement.

However, the ownership of non-Saudi nationals cannot not exceed 49% of the company’s shares. An exception applies to strategic foreign investors, who are not permitted to own shares or convertible debt instruments in these companies. 

The directive goes into effect from today. 

The financial regulatory authority said that it aims to stimulate investment and provide liquidity for current and future projects in Makkah and Madinah. In 2021, the regulator permitted non-Saudis to subscribe to real estate funds investing in assets located within the boundaries of the two holy cities.

Saudi Arabia is loosening investment laws as well as as carrying out several real estate projects in the two holy cities as it aims to welcome 30 million pilgrims by 2030. It welcome 27.4 million international tourists in 2023, 42% of whom visited for religious purposes, according to data from the Saudi tourism ministry. 

The Saudi bourse, also known as Tadawul, which has a market capitalization of 10.3 trillion Saudi riyals, opened up to foreign investors back in 2015. 

Saudi Arabia is looking to ramp up investment in the kingdom as it races towards its diversification programme, to shift away from oil.

Foreign direct investment (FDI) inflows in the kingdom were valued at 16 billion Saudi riyals in Q3 2024, plummeting 24% year-on year, while growing 37% on a quarterly basis, according to Saudi Arabia's General Authority for Statistics.