The Law of Real Estate Ownership by Non-Saudis issued by Royal Decree No. M/14 dated 19/01/1447 (corresponding to July 25, 2025) (the “New Law”), together with the implementing regulations approved by the Council of Ministers pursuant to Decision No. 43 dated 08/01/1448 AH (corresponding to July 3, 2026) (the “Implementing Regulations”), sets out the conditions and procedures for non-Saudi individuals and entities seeking to acquire real property in the Kingdom.
These developments should be considered alongside the registration requirements administered by the Ministry of Investment of Saudi Arabia (MISA), which govern foreign investment (including in real estate) more broadly.
Background and policy context
Non-Saudi ownership of real estate in the Kingdom has long been governed by a dedicated regulatory framework, most notably the Law of Real Estate Ownership and Investment by Non-Saudis issued by Royal Decree No. M/15 dated 17/04/1421H (corresponding to July 19, 2000). With effect from January 2026, the New Law consolidates and modernizes this framework, superseding and repealing the previous legislation and any conflicting provisions.
The New Law will operate alongside the Regulation on Ownership of Real Estate by Nationals of Gulf Cooperation Council Countries issued by Royal Decree No. M/22 dated 3/4/1432 AH (corresponding to March 7, 2011) (the “GCC Regulation”), as discussed in further detail below. We understand that the GCC Regulation is intended to be amended to align with the New Law’s position on ownership of real estate in Makkah and Madinah.
The New Law forms part of the Kingdom’s broader effort to enhance foreign investment, improve competitiveness, and streamline real estate procedures through legislative modernization aligned with Vision 2030.
Scope of foreign ownership
The New Law permits the ownership of real estate in the Kingdom by the following categories:
- Natural persons who do not hold Saudi nationality (whether residing in the Kingdom or not)
- Non-Saudi companies (i.e. companies not established under the Saudi Companies Law and headquartered outside the Kingdom, including those with a branch or representative office in the Kingdom)
- Non-Saudi non-profit entities
- Other non-Saudi juridical persons determined by a Council of Ministers resolution
- International missions and organizations (based on reciprocity and with the approval of the Ministry of Foreign Affairs)
- Saudi companies with non-Saudi shareholders
- Licensed special purpose entities (SPEs), licensed investment funds, or Saudi companies listed on the Saudi Stock Exchange
The New Law defines “Non-Saudi” as persons or entities falling within categories 1, 2, 3, and 4 listed above.
Forms of ownership and rights available
Under the new framework, non-Saudi entities and natural persons may acquire full ownership of property (equivalent to freehold or absolute ownership in other jurisdictions) or other rights in rem over property such as usufruct right (the right to use and benefit from a property for a specified period, broadly akin to a lease in other jurisdictions). These rights may be acquired for personal use or for investment purposes, subject to the conditions set out in the Implementing Regulations.
Geographical zones for foreign ownership
Geographical zones are the areas officially designated in which non-Saudis are allowed to own or acquire real estate rights, including but not limited to specified areas within Riyadh, Jeddah, Makkah, and Madinah (the “Geographical Zones”). These Geographical Zones are set out in an official document displayed via the Real Estate General Authority (REGA) portal here, which includes maps of specific locations, permitted ownership limits, types of real estate rights granted, allowed durations, and regulatory controls applicable to non-Saudi ownership for each Geographical Zone.
Registration requirements for ownership
Before acquiring property, non-Saudis must ensure title to the property is registered in the Real Estate Registry and complete certain pre-ownership steps under the Implementing Regulations, which vary by category of buyer.
In each case, the core requirements are obtaining a Kingdom-issued digital identity and opening a Saudi bank account. Non-Saudi individuals (non-resident) must also obtain a Saudi contact number, whilst non-Saudi companies must register with MISA (disclosing direct and indirect owners) and appoint a legal representative.
Once a property is registered with MISA in the name of a company, the company must notify MISA within 15 days of any 5%+ ownership change (whether through one transaction or a series of transactions) or any arrangement that materially affects its independence or decision-making. Similar registration and disclosure obligations apply to any other non-Saudi juridical person designated by a Council of Ministers decision.
Saudi established companies with non-Saudi shareholders
A company that is not listed on the Saudi Stock Exchange and that is established under the Saudi Companies Law, in which one or more non-Saudi persons hold shares, may acquire full ownership of property:
- inside the Geographical Zones and
- with MISA approval, outside of the Geographical Zones with the exception of the cities of Makkah and Madinah, only for the purposes of:
(a) conducting its activities or
(b) housing its employees.
The term “conducting its activities” is not defined in the Implementing Regulations. However, we understand that this is intended to cover operational business premises rather than investment in real estate as an activity in its own right. There are additional special rules for real estate in Makkah and Madinah, see below.
Listed companies, investment funds and SPES
The New Law clarifies that Saudi companies listed on the Saudi Stock Exchange and investment funds and SPEs licensed in the Kingdom can invest in real estate in accordance with the Capital Market Law and its implementing regulations, including controls issued by the Capital Market Authority (the CMA). The Capital Market Authority Decision No. 1 8 2026/1447, corresponding to January 21, 2026, issued such controls (the “CMA Controls”), which provide that the aforementioned entities can own real estate and acquire other rights in rem over real estate in the Kingdom (not limited to the Geographical Zones), subject to and in accordance with the Capital Market Law.
Capital Market Institutions (i.e., a person authorized by the CMA to carry out securities business) may accept subscriptions from natural and legal non-Saudi persons in investment funds investing wholly or partly in Saudi real estate but it should be borne in mind that at redemption the foreign ownership rules implemented under the New Law must be complied with.
There are additional special rules for real estate in Makkah and Madinah, see below.
Special rules for Makkah and Madinah
The New Law grants the right to own real estate within the Geographical Zones in the cities of Makkah and Madinah to:
- Muslim natural persons who do not hold Saudi nationality and
- private Saudi companies with non-Saudi shareholders.
We are yet to see the intended amendments to the GCC Regulation in respect of ownership in the cities of Makkah and Madinah.
The CMA Controls grant the following rights in relation to ownership of real estate in the cities of Makkah and Madinah to:
- licensed investment funds and SPEs may own and invest in real estate within the borders of the cities of Makkah and Madinah and
- 2. Saudi companies listed on the Saudi Stock Exchange may own real estate located within the borders of the cities of Makkah and Madinah, provided such real estate must be allocated to their (or their branches’) headquarters, and the property must be fully used for such purpose. The CMA Controls provide an exception where Saudi listed companies may own real estate within the cities of Makkah and Madinah for other purposes, which requires the following conditions to be met:
(a) Foreign strategic investors do not own the shares or the convertible debt instruments of the listed company at any time.
(b) The ownership of natural and legal non-Saudi persons does not exceed 49% of the shares or the convertible debt instruments of the company at any time.
Fees on real estate transactions
On a property dealing by a non-Saudi, the New Law imposes an additional fee payable to REGA of up to 5%. The Implementing Regulations set the REGA fee at 2% within the Geographical Zones of Riyadh, Jeddah, Madinah and Makkah, applying to all types of real property rights and all types of usage.
A fee rate of 0% applies in a number of specified cases, including dispositions outside the above-listed Geographical Zones, dispositions pursuant to inheritance, court judgments, or expropriation for public benefit, gratuitous transfers to a waqf or public body, re-transfers to the original non-Saudi owner within 180 days (provided the property and consideration remain unchanged), partitions among co-owners (where no co-owner’s share increases), dispositions by diplomatic missions and international organizations, transfers by a natural person to a wholly-owned company or fund, and sales of developed real estate units (subject to conditions on completion and timing).
We note that this foreign ownership fee is in addition to the general 5% real estate transaction tax (RETT) that applies to real estate transactions generally in the Kingdom.
Penalties for violations
The New Law and Implementing Regulations establish a penalties regime enforced by specialized committees within REGA. Penalties are graduated according to the severity of the violation and escalate for repeat offenses. In each case the relevant committee shall consider the provision of a rectification period of between 10 and 180 days. A summary of the key penalties is set out below.
