Can you buy property in Mecca and Medina as a foreigner?

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

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Foreign investors considering property in Saudi Arabia's holy cities face a unique set of regulations that have recently undergone historic changes.

As of June 2025, Saudi Arabia has partially opened the property markets in Mecca and Medina to foreign investment through groundbreaking reforms, though direct ownership remains prohibited. This represents a significant shift in Saudi Arabia's approach to foreign investment in its most sacred cities, allowing international investors to participate indirectly in these high-value real estate markets for the first time.

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

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Could foreigners buy property in Mecca or Medina before, and what stopped them?

Foreign ownership of property in Mecca and Medina was completely prohibited for decades prior to the recent reforms.

The Law of Real Estate Ownership and Investment by Non-Saudis specifically banned foreign individuals, companies, and even Saudi companies with foreign shareholders from purchasing any property in these holy cities. This comprehensive restriction was implemented to preserve the religious sanctity and strategic importance of Islam's two holiest cities, ensuring they remained under complete Saudi control.

The only exceptions to this strict prohibition were extremely rare cases involving diplomatic missions or special approvals granted directly by the Council of Ministers. These exceptions were so uncommon that they essentially confirmed the rule rather than undermining it, and the vast majority of foreign investors had absolutely no pathway to property ownership in these cities.

This prohibition extended to all categories of foreigners, including citizens of Gulf Cooperation Council (GCC) countries who typically enjoy preferential treatment in other parts of Saudi Arabia. Even wealthy Muslim investors from around the world found themselves unable to purchase property in these sacred cities, regardless of their religious devotion or financial capabilities.

Which laws specifically banned foreigners from owning property in these cities?

The primary legal framework prohibiting foreign property ownership was the Law of Real Estate Ownership and Investment by Non-Saudis.

This comprehensive law explicitly listed Mecca and Medina as completely off-limits for any form of foreign property ownership or investment. The legislation was remarkably clear and left no room for interpretation, stating that these two holy cities were to remain exclusively under Saudi ownership to protect their religious significance and maintain national sovereignty over Islam's most sacred sites.

The enforcement of these laws was absolute and unwavering throughout the decades. Saudi authorities implemented strict monitoring systems to ensure compliance, and any attempts to circumvent these restrictions through complex ownership structures or nominee arrangements were met with severe penalties.

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

What changed in 2024 and 2025 regarding foreign property ownership?

The years 2024 and 2025 marked a watershed moment in Saudi Arabia's approach to foreign investment in its holy cities.

The Saudi Capital Market Authority (CMA) enacted groundbreaking reforms that partially opened Mecca and Medina's real estate markets to foreign investors for the first time in modern history. The most significant change allows foreigners to invest in shares or convertible debt instruments of Saudi-listed companies that own real estate in these cities, with foreign ownership capped at 49% of any such company.

This reform represents a carefully calibrated approach that balances Saudi Arabia's Vision 2030 goals of attracting foreign investment with the need to maintain sovereignty over its most sacred sites. The new regulations permit foreign investors to benefit from the appreciation and rental income of properties in these high-demand markets while ensuring that ultimate control remains in Saudi hands.

The timing of these reforms coincides with Saudi Arabia's broader economic transformation agenda, which seeks to diversify the economy away from oil dependence and position the Kingdom as a global investment destination. By opening these previously closed markets, Saudi Arabia has created new opportunities for international capital to participate in one of the world's most unique real estate markets.

Can foreigners actually buy property in Mecca and Medina now?

Direct property ownership by foreigners in Mecca and Medina remains strictly prohibited despite the recent reforms.

What has changed is the ability for foreigners to indirectly invest in these markets through purchasing shares in Saudi-listed companies that own real estate in the holy cities. This means you cannot walk into a real estate office and buy a house or apartment in Mecca or Medina as a foreigner, but you can buy shares in a company listed on the Saudi stock exchange (Tadawul) that owns such properties.

This indirect ownership model allows foreign investors to benefit from rental income through dividends and property value appreciation through share price increases. However, you have no direct control over specific properties, cannot choose which buildings the company invests in, and cannot use or occupy any property yourself.

The 49% foreign ownership cap ensures that Saudi investors always maintain majority control of these companies, preserving the fundamental principle that Saudis retain ultimate authority over property in their holy cities. This structure represents a compromise between opening markets to foreign capital and maintaining religious and national sovereignty.

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Are the rules different for Mecca compared to Medina?

Both holy cities operate under the same fundamental framework regarding foreign investment, but there are some notable distinctions in restricted zones.

The most significant difference lies in Medina's "Haram" zone - the 1.5 kilometer radius surrounding the Prophet's Mosque - where foreign investment is completely prohibited even through listed companies. This sacred perimeter represents an absolute restriction that cannot be circumvented through any investment structure, ensuring that the area immediately surrounding one of Islam's holiest sites remains exclusively under Saudi ownership.

While similar restrictions likely apply to the area immediately surrounding the Grand Mosque in Mecca, the specific boundaries and restrictions for Mecca's sacred zones are less explicitly defined in the current regulations. Both cities maintain strict controls over government-owned properties and areas designated as strategically important, but Medina's regulations provide more detailed geographic specifications.

Beyond these specific restricted zones, the general investment rules apply equally to both cities: foreigners can invest up to 49% in listed companies owning real estate, direct ownership remains prohibited, and all investments require appropriate regulatory approvals from the Capital Market Authority.

Who counts as a "foreigner" according to the new rules?

The Saudi regulations define "foreigner" broadly to include any individual or entity that is not Saudi.

This comprehensive definition encompasses non-Saudi individuals from any country, foreign companies not registered in Saudi Arabia, and even citizens and companies from GCC countries despite their preferential treatment in other sectors. The regulations also specifically include Qualified Foreign Investors (QFIs), swap agreement beneficiaries, and clients of discretionary portfolio managers in the foreign category.

Interestingly, the rules make no distinction based on religion, meaning that Muslim investors from other countries are still considered foreigners and subject to the same restrictions as non-Muslims. This represents a significant shift from historical practices where religious affiliation sometimes influenced property rights in the holy cities.

The only entities not considered foreign are Saudi citizens and companies registered in Saudi Arabia with majority Saudi ownership. Even Saudi companies with significant foreign shareholding may face restrictions depending on their ownership structure, emphasizing the Kingdom's commitment to maintaining Saudi control over these sacred cities.

What kinds of property can foreigners invest in - houses, apartments, or commercial buildings?

Foreign investors can indirectly access a diverse range of property types through their shareholdings in listed companies.

These companies may own residential apartments, houses and villas, commercial buildings, raw land for development, and mixed-use properties combining residential and commercial elements. The variety of property types reflects the dynamic real estate markets in both holy cities, where demand spans from budget pilgrim accommodation to luxury hotels and from small retail shops to large commercial complexes.

However, foreign investors cannot select specific properties or influence which assets the company acquires or develops. Investment decisions are made by the company's board and management, with foreign shareholders having limited voting rights due to the 49% ownership cap.

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

Are there specific areas where foreigners absolutely cannot invest?

Several zones within Mecca and Medina remain completely off-limits to foreign investment under any circumstances.

The most clearly defined restriction is the Haram zone in Medina, encompassing a 1.5 kilometer radius around the Prophet's Mosque, where no foreign investment is permitted even through listed companies. Government-owned properties throughout both cities are also excluded from foreign investment, as are areas designated as restricted by Saudi authorities for security or religious reasons.

Properties immediately surrounding the most sacred religious sites in both cities face absolute restrictions, though the specific boundaries in Mecca are less explicitly defined than in Medina. Any property not owned by a publicly listed Saudi company is automatically excluded from foreign investment, meaning that privately held real estate remains completely inaccessible to foreign investors.

These restrictions ensure that the most religiously significant and strategically important areas of both holy cities remain under exclusive Saudi control, preserving their sacred character while allowing foreign investment in less sensitive areas through the listed company mechanism.

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What's the step-by-step process for a foreigner to invest in property?

The investment process for foreigners requires careful navigation of Saudi regulatory requirements and market structures.

First, investors must research Saudi-listed companies on Tadawul that own real estate in Mecca or Medina, examining their portfolios, financial performance, and growth strategies. Next, verify that the company's current foreign ownership is below the 49% threshold, as companies at or near this limit cannot accept additional foreign investment.

Investors must then apply for necessary approvals from the Capital Market Authority (CMA) and potentially the Ministry of Investment (MISA), providing documentation about their identity, source of funds, and investment intentions. Once approved, open a trading account with a licensed Saudi broker who can facilitate purchases on the Tadawul exchange.

After completing these preparatory steps, investors can purchase shares or convertible debt instruments through the stock exchange, ensuring all transactions comply with Saudi regulations. Finally, register your ownership properly and maintain ongoing compliance with reporting requirements, including any changes in beneficial ownership or investment structure.

The entire process typically takes 2-4 weeks once you've identified your target investment company, though complex cases or those requiring additional regulatory scrutiny may take longer.

What can foreigners do with their property investment - rent it out, renovate, or sell?

Foreign investors' rights are limited to those of shareholders rather than direct property owners.

Since you don't own physical property directly, you cannot rent out specific units, make renovation decisions, or sell individual properties. Instead, the listed company manages all operational aspects of the real estate portfolio, including leasing decisions, property maintenance, development projects, and asset dispositions.

Your returns come through two channels: dividends distributed by the company based on its rental income and profits, and capital appreciation reflected in rising share prices. Premium Residency holders with 99-year usufruct rights enjoy more direct control, including the ability to rent out their properties, undertake renovations, and transfer their leasehold interests, though these arrangements remain rare and require significant investment.

Does being Muslim or non-Muslim affect your ability to invest?

The recent reforms have fundamentally changed how religious affiliation impacts property investment rights in the holy cities.

Before 2024, only Muslims could own or lease property in Mecca and Medina, reflecting the cities' sacred status in Islam. The 2025 reforms now allow non-Muslims to invest in shares of companies owning real estate in these cities, marking a historic shift in policy that prioritizes economic considerations alongside religious ones.

However, important distinctions remain: non-Muslims still cannot physically enter Mecca and face restrictions in certain parts of Medina, meaning they cannot visit or inspect properties their investment companies own. Direct property ownership remains prohibited for non-Muslims, maintaining the principle that only Muslims can have direct control over real estate in Islam's holiest cities.

From an investment perspective, there are no religious restrictions on receiving dividends or capital gains from these investments. Non-Muslim investors enjoy the same financial rights as Muslim investors when it comes to returns on their shareholdings, though they cannot exercise any rights that would require physical presence in restricted areas.

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

What does this mean for foreign investors looking at Mecca and Medina property long-term?

The long-term implications of these reforms present both significant opportunities and important limitations for foreign investors.

On the positive side, foreign investors gain first-time access to two of the world's most valuable religious real estate markets, characterized by consistent demand from millions of annual pilgrims and steady appreciation rates of 8-12% annually over the past decade. The reforms suggest Saudi Arabia may further liberalize these markets in the future as part of Vision 2030, potentially creating additional investment opportunities.

These markets offer unique portfolio diversification benefits, as demand is driven by religious obligations rather than typical economic cycles. The combination of rental income from pilgrim accommodation and long-term capital appreciation provides an attractive investment profile for patient investors willing to accept the indirect ownership structure.

However, significant limitations remain: the 49% cap prevents foreign investors from gaining control of companies, strategic investors seeking operational influence will find these investments unsuitable, and returns depend entirely on company management performance rather than specific property selection. There's no guarantee that Saudi Arabia will further liberalize these markets to allow direct foreign ownership, which may remain prohibited indefinitely given the cities' religious significance.

Foreign investors should view these opportunities as long-term, passive investments in a unique market rather than active real estate plays, understanding that while returns may be attractive, control and flexibility will always be limited.

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.

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