Saudi Arabia Opens Its Real Estate Market to Foreign Ownership

What You Need to Know

The Kingdom of Saudi Arabia has taken a landmark step in its Vision 2030 journey. The Council of Ministers has approved the Implementing Regulation for the Law on Non-Saudi Real Estate Ownership – a detailed set of rules that finally puts flesh on the bones of the Royal Decree issued earlier this year. For foreign individuals, multinational companies, and non-profit organisations looking at the Kingdom’s real estate market, this is the document that tells you exactly how to proceed.

Why This Matters

Saudi Arabia’s real estate sector is one of the largest and fastest growing in the region. With Riyadh cementing its position as a regional business hub, Jeddah attracting tourism and hospitality investment, and the giga-projects reshaping the country’s landscape, there has never been more interest from foreign capital in owning a slice of the Kingdom. The new Regulation provides the legal infrastructure to make that possible; with clear rules, a digital-first process, and a structured oversight framework.

Who Does This Apply To?

The Regulation Covers Three Categories Of Non-Saudi Persons:

• Non-resident foreign individuals – natural persons who are not Saudi nationals and do not reside in the Kingdom.
• Non-Saudi companies – foreign corporates seeking to own real estate or acquire real property rights.
• Non-Saudi non-profit entities – international foundations, associations, and similar organisations.

It also applies to Saudi companies whose share capital is partially owned by non-Saudis, a category that captures many joint ventures and foreign-invested businesses already operating in the Kingdom.

The Prerequisites: Getting Your House in Order Before You Buy

For Foreign Individuals

Before a non-resident foreign individual can acquire property in Saudi Arabia, they must complete three steps:

• Obtain a Digital Identity issued and authenticated by the Ministry of Interior.
• Open a bank account in the Kingdom of Saudi Arabia in their own name.
• Register a Saudi mobile number linked to their Digital Identity.

These requirements are not merely bureaucratic formalities. They are designed to create a verifiable digital footprint for each foreign buyer – tying the individual’s identity, banking, and communications to a single digital record before any transaction is initiated.

For Foreign Companies

Foreign companies face a more structured set of obligations. Before acquiring real estate, they must:

• Register with the Ministry of Investment, disclosing both direct and indirect owners at the time of registration.
• Ensure their legal representative holds a valid identity document issued under Saudi law.
• Open a corporate bank account inside the Kingdom.

The obligations do not end at acquisition. Registered foreign companies must notify the Ministry of Investment within 15 days whenever any of the following occur:

• A transfer of 5% or more of the company’s ownership (whether in a single transaction or over a series of transactions).
• Internal arrangements or structural regulations in the country of incorporation that effectively restrict the company’s independence or give a third party material influence over its decisions.
• Any other circumstances designated by the General Authority for Real Estate (“REGA”).

These are significant compliance burdens. Companies with active M&A pipelines or complex group structures will need to build real estate notification obligations into their ownership-change workflows.

Everything Goes Through a Digital Portal

REGA is mandated to build and operate a dedicated electronic portal for all non-Saudi real estate transactions, integrated with the real estate registry. Every application – whether to acquire property, register an in-rem right, or transfer an interest – must be submitted through this portal. All associated financial transactions must be conducted through electronic payment methods regulated by SAMA, the Saudi Central Bank. Cash and offline transfers are not an option.

Where Can Foreign Owners Buy?

Geography matters under this framework. Under Article 8 of the Regulation, a Saudi company that is not listed on the Saudi financial market, and in whose share capital one or more non-Saudi persons hold an ownership interest, may own real estate outside the Geographical Scope – except in the cities of Makkah and Madinah – provided that the property is required for carrying out its business activities or providing housing for its employees, and subject to obtaining the prior approval of the Ministry of Investment. The same company may, however, own real estate within the Geographical Scope, including in Makkah and Madinah, without requiring Ministry of Investment approval.

The Regulation also addresses family ownership: a non-Saudi owner’s non-Saudi spouse and children are treated as dependants for the purpose of acquiring residential real estate. No dependant may independently own residential property in the Kingdom unless the marriage has ended or the child has reached the age of 25.

The Cost of Transacting: A 2% Fee – With Exemptions

The Regulation introduces a transaction fee of 2% on the value of any in-rem right disposal by a non-Saudi in the cities of Riyadh, Makkah, Madinah, and Jeddah, across all property types and uses.

Importantly, the Regulation provides a broad list of zero-rated exemptions, including:

• Disposals outside the four designated cities;
• Transfers of property in estate distributions;
• Court-ordered disposals;
• Compulsory acquisition for public benefit;
• Rescissions within 180 days of an original transfer (where the property and consideration remain unchanged);
• Transfers from a natural person to a wholly-owned company or investment fund established in the Kingdom; and
• Disposals of developed units by a non-Saudi developer, provided development was completed within the licence period and sales are concluded within one year of licence expiry.

These exemptions are commercially significant. Developers, investment funds, and institutional investors will want to structure transactions carefully to take advantage of them.

Non-Compliance Carries Serious Consequences

REGA’s appointed inspectors have authority to detect and record violations of the Law and the Regulation. The penalties are graduated and can be severe:

• Submitting false or misleading information to obtain property: a fine of 5% of the in-rem right value (up to SAR 10 million), plus compulsory sale of the property.
• Providing false information to obtain Ministry of Investment approval: escalating fines from 0.5%–1% on a first offence (capped at SAR 1 million) up to 2%–3% on a third offence (capped at SAR 4 million).
• Obstructing inspectors: fines starting at 0.1%–0.5% on a first offence (capped at SAR 500,000) up to 2%–3% on a third offence (capped at SAR 4 million).
• Failure to notify of ownership or structural changes: a warning on a first offence, escalating to fines of up to SAR 2 million on subsequent offences.

The Bottom Line

The Implementing Regulation transforms the Law from a statement of intent into an actionable framework. It reflects a genuine commitment to opening the Kingdom’s real estate market to foreign participation – but on clearly defined terms that prioritise transparency, digital infrastructure, and regulatory oversight.

For foreign investors and businesses, the key takeaways are:

• Start the registration process early – it is a hard prerequisite, not a formality.
• Plan for full ownership transparency – beneficial ownership disclosure is required from day one.
• Build ongoing compliance into your operations – 15-day notification windows leave little room for delay.
• Model the 2% fee – and assess whether any exemption applies to your specific transaction structure.
• Go digital – all transactions flow through REGA’s portal with SAMA-regulated payment methods.

Saudi Arabia’s real estate sector is open for foreign investment in a way it has never been before. The framework is now in place. The question is whether investors are ready to move.