Can foreigners now own property in Saudi Arabia?

Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack

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Saudi Arabia has dramatically transformed its property market, opening doors to foreign ownership like never before.

As of mid-2025, the Kingdom's new Investment Law and revolutionary regulations have created unprecedented opportunities for international investors. The changes mark a historic shift from decades of strict restrictions, allowing foreigners to own various property types across most of the Kingdom, with even indirect investment now possible in the holy cities of Mecca and Medina.

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A team specialized in real estate investing in Middle Eastern countries (Saudi Arabia, UAE, Qatar, Bahrain, etc.).

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Could foreigners buy property in Saudi Arabia before the recent changes?

Yes, but under extremely limited conditions that made it practically impossible for most foreigners.

Since 2000, the Law of Real Estate Ownership and Investment by Non-Saudis technically allowed foreign property ownership, but the restrictions were so stringent that few could actually benefit. Foreign companies could own property necessary for their business operations, while individuals with legal residency (Iqama) could own a single residential property for personal use.

The approval process required navigating multiple ministries, making it lengthy and complex. All purchases needed government approval through various departments, creating significant bureaucratic hurdles. The reality was that despite the law existing on paper, most foreigners couldn't practically own property in Saudi Arabia.

These limitations effectively kept the Saudi property market closed to international investors for over two decades. The system was designed more to control than to facilitate foreign ownership.

It's something we develop in our Saudi Arabia property pack.

What restrictions prevented foreigners from buying property previously?

The previous system imposed numerous barriers that made foreign property ownership nearly impossible.

The restrictions created a complex web of requirements that few could navigate successfully. These barriers effectively protected the Saudi property market from foreign investment while limiting economic diversification.

When did Saudi Arabia change its foreign ownership laws?

The transformation began in 2024 and accelerated dramatically in early 2025, marking a historic shift in Saudi property policy.

The new Investment Law, effective February 2025, replaced the 2000 Foreign Investment Law and fundamentally changed how foreigners can own property. This legislation introduced streamlined approval processes, reduced bureaucracy, and expanded the types of properties available to foreign investors.

In January 2025, the Capital Market Authority introduced groundbreaking regulations allowing foreign investment in companies owning property in Mecca and Medina. This move shocked many observers as it opened the holy cities to indirect foreign investment for the first time in history. The announcement caused property-focused stocks to jump 10% immediately.

These changes represent the most significant liberalization of Saudi Arabia's property market in history. The reforms align with Vision 2030's ambitious goals to diversify the economy and attract foreign investment.

The speed of implementation has been remarkable, with new regulations coming into force within weeks of announcement rather than the typical months or years of previous reforms.

What exactly can foreigners own now that they couldn't before?

The new regulations permit unprecedented access to Saudi Arabia's property market across multiple asset classes.

Foreigners can now directly own residential properties in major cities like Riyadh, Jeddah, and Dammam for investment purposes, not just personal residence. Commercial real estate ownership has expanded beyond business operations to include pure investment plays. Land ownership for development is now possible, opening opportunities in the Kingdom's massive construction pipeline.

Special economic zones like NEOM and King Abdullah Economic City offer enhanced ownership rights with potential 100% foreign ownership. Agricultural land can be owned under specific conditions, supporting the Kingdom's food security initiatives. Properties in tourist destinations including the Red Sea Project and Al-Ula are now accessible to foreign investors.

The most revolutionary change allows up to 49% foreign ownership in listed companies with properties in Mecca and Medina through the stock market. This indirect investment option opens the holy cities' real estate market to international capital for the first time. Real Estate Investment Trusts (REITs) including those with holy city assets are now investable by foreigners.

The crucial shift is that foreigners can now own property for pure investment purposes, transforming Saudi Arabia from a closed market to one of the region's most accessible.

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Do foreigners need residency to buy property in Saudi Arabia?

The residency requirements vary significantly depending on the type of property and investment structure.

For residential properties intended for personal use, a valid Iqama (residency permit) remains mandatory. However, commercial and investment properties can be purchased without residency if done through a properly licensed company. The Premium Residency Program offers enhanced rights, allowing SAR 4 million property investment to qualify for residency or SAR 800,000 for permanent residency with broader property rights.

What types of properties can foreigners purchase?

As of June 2025, foreigners can own virtually all property types in Saudi Arabia with proper approvals.

Residential properties include villas and apartments in designated areas, luxury compounds, gated communities, and properties in new urban developments. The residential market has opened significantly, with most major cities now accessible to foreign buyers. Investment in student housing and senior living facilities has become particularly attractive given demographic trends.

Commercial real estate options span office buildings, retail spaces, hotels, hospitality properties, warehouses, and industrial facilities. The commercial sector offers higher returns but requires larger investment minimums. Mixed-use developments combining retail, office, and residential components are increasingly popular among foreign investors.

Development land represents a major opportunity, with plots available for residential development, commercial projects, and mixed-use developments. The Kingdom's massive construction pipeline creates significant opportunities for land banking and development. Agricultural land can be acquired for farms and agri-business projects, supporting food security initiatives.

Special economic zones offer the most liberal ownership structures, with some areas permitting 100% foreign ownership of all property types.

Are there still geographic restrictions for foreign buyers?

Yes, but the restrictions are now clearly defined and much less extensive than before.

Mecca and Medina remain completely restricted for direct foreign ownership due to their religious significance. However, the revolutionary change allows up to 49% indirect ownership through listed companies, opening these markets to foreign capital. Military zones, border areas, and critical infrastructure locations including government facilities, airports, and ports remain off-limits to foreign buyers.

Major cities including Riyadh, Jeddah, Dammam, and Khobar are now fully open to foreign investment. Economic cities like NEOM, King Abdullah Economic City, and Jazan Economic City offer enhanced ownership rights. Tourist destinations including Red Sea Project areas, Al-Ula, and planned resort zones welcome foreign investment. The 36 MODON-managed industrial cities are accessible for commercial and industrial property investment.

Special economic zones may offer 100% foreign ownership under specific regulations, particularly in Vision 2030 mega-projects. These zones represent the most liberal property ownership environment in the Kingdom.

It's something we develop in our Saudi Arabia property pack.

Are the rules different for individual buyers versus companies?

Yes, significant distinctions exist between individual and corporate foreign buyers.

Individual foreign buyers face more restrictions but simpler processes. They require legal residency (Iqama) for residential property purchases and are limited to personal use properties or investment properties with specific approval. The application process goes through the General Real Estate Authority, and they're subject to a 5% property transfer tax. Individuals benefit from clearer regulations and faster approval times compared to the old system.

Foreign companies have broader access but higher requirements. They must be licensed by the Ministry of Investment and meet a SAR 30 million minimum for development projects. Companies can access a wider range of property types including commercial and industrial real estate. Development timelines require completion within 5 years, but potential tax exemptions exist in special economic zones. Corporate structures offer more flexibility for large-scale investments.

Listed company investment provides the most accessible option for non-residents. No residency is required, and investors can access Mecca and Medina properties indirectly with up to 49% ownership. The process involves direct stock market investment with maximum flexibility. This route has become increasingly popular since the January 2025 regulatory changes.

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What are the financial requirements and taxes for foreign buyers?

The financial structure has been simplified and made more attractive for foreign investors.

Investment thresholds vary by property type and investment structure. Commercial development requires a SAR 30 million minimum with a 5-year development commitment. The residency by investment program requires SAR 4 million in property investment with retention requirements. Listed company investment has no minimum but limits foreign ownership to 49%. Residential properties with valid Iqama have no minimum investment but require personal use declaration.

Can foreigners rent out or resell their Saudi properties?

Yes, foreigners have substantial rights to generate income from and dispose of their Saudi properties.

Rental rights are quite liberal for foreign owners. Residential properties can be rented out freely without special permissions. Commercial properties can be rented according to the approved business plan. Foreign entities face a 20% corporate tax on rental income, but the growing rental market offers attractive yields of 5-8% in major cities. Property management companies can handle day-to-day operations for absentee foreign owners.

Resale rights have also been liberalized significantly. There's no minimum holding period for most properties, allowing quick exits if needed. Commercial developments must complete construction before resale to prevent speculation. Capital gains are subject to applicable taxes based on ownership structure. Properties can only be sold to eligible buyers, maintaining market integrity.

Important considerations include potential forced sale if residency is lost for personal properties. Development commitments must be fulfilled before resale of commercial projects. Properties in special zones may have specific resale conditions. All transactions must go through official channels to ensure legal compliance.

The flexibility in rental and resale rights makes Saudi property investment more attractive for international portfolios.

Who still cannot buy property under the new rules?

Despite liberalization, certain categories remain restricted from Saudi property ownership.

Non-residents without business presence cannot buy residential property directly and must invest through companies or listed entities. This ensures some connection to the Kingdom while still allowing investment opportunities. Strategic foreign investors, including sovereign funds and government entities, are excluded from Mecca and Medina listed company investments to maintain local control of holy sites.

Certain nationalities face restrictions based on diplomatic relations and security considerations. Countries without diplomatic relations with Saudi Arabia see their citizens barred from property ownership. Security-restricted nationalities determined by government assessment also face limitations. These restrictions can change based on evolving international relations.

Individuals and entities failing to meet requirements cannot access the market. Those unable to meet investment thresholds for their chosen property type are excluded. Entities not properly licensed in Saudi Arabia cannot participate in property transactions. Individuals without valid residency cannot purchase residential properties for personal use. Direct ownership in Mecca and Medina remains prohibited for all foreigners, with only indirect investment through listed companies allowed up to 49%.

These restrictions maintain market stability while opening opportunities for qualified investors.

What's driving these changes and what does it mean for future investment?

Vision 2030 is the primary driver, aiming to transform Saudi Arabia's economy and society.

The property market liberalization directly supports Vision 2030's ambitious goals of economic diversification and reduced oil dependence. The Kingdom targets attracting $100 billion in FDI annually, with real estate playing a crucial role. Supporting 100 million visitors by 2030 requires massive hospitality and residential development. Building new cities and transforming existing ones needs international expertise and capital. Increasing private sector contribution to 65% of GDP requires opening markets to foreign investment.

The market has responded enthusiastically to these reforms. Property-focused stocks jumped 10% following the January 2025 announcement about Mecca and Medina investments. Foreign investment inquiries increased 300% in Q1 2025 as investors rushed to understand opportunities. Major international developers announced Saudi projects worth $50 billion in the first quarter alone. Residential prices in Riyadh and Jeddah increased 15-20% year-over-year, indicating strong demand.

It's something we develop in our Saudi Arabia property pack.

Long-term implications suggest Saudi Arabia is positioning itself as the Gulf's premier investment destination, offering access to an $800 billion real estate market with significant growth potential.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Vision to Reality - foreign ownership laws in Saudi Arabia
2. Foreign Ownership of Real Estate in Saudi Arabia: The Freehold Boom
3. Saudi Arabia allows foreigners to invest in firms with property in Mecca, Medina
4. Can Foreigners Buy Property in Saudi Arabia? A Comprehensive 2025 Guide
5. Foreign Ownership of Real Estate in Saudi Arabia – Legal Developments
6. Foreign Property Ownership in Saudi Arabia
7. Saudi Arabia opens up holy cities to foreign property investors
8. Foreign Property Ownership in Saudi Arabia | Skyline Holdings