Saudi Arabia’s New Law for Real Estate Ownership by Non-Saudis is In Effect—A Strategic Opening for Global Investors

Saudi Arabia has taken a major step in opening its property market to global capital with the implementation of the Law of Real Estate Ownership by Non-Saudis, a landmark reform that entered into force on January 22, 2026. This legislation marks a profound transformation in the Kingdom’s regulatory approach to foreign property ownership, signaling a new era for international investment aligned with Vision 2030’s economic diversification objectives.

Background: From restriction to opportunity

Historically, Saudi Arabia maintained stringent restrictions on foreign real estate ownership. Non-Saudi individuals and entities were broadly prohibited from owning property, with only limited exceptions under specific conditions, such as diplomatic use or indirect investment through listed companies and funds. This cautious stance was rooted in cultural, economic, and sovereignty considerations.

The new law, approved by Saudi Arabia’s Cabinet and published in the Official Gazette in July 2025, repeals previous restrictive frameworks and introduces a structured, regulated system enabling non-Saudi ownership across the Kingdom. After a 180-day transition period, the law is now fully in effect, creating a legal foundation for foreign investment in Saudi real estate.

Scope: Who can own and what they can buy

Under the reformed framework:

• Non-Saudi individuals, whether residents or non-residents, are eligible to acquire property in Saudi Arabia.
• Foreign companies and legal entities, including investment funds and international organizations, can own property for commercial, industrial, or residential use.
• Saudi companies with non-Saudi shareholders are also included under certain conditions.
• Diplomatic missions and nonprofits may be permitted to own real estate based on reciprocity and regulatory approval.

Ownership rights can take multiple forms beyond outright title, such as long-term leasehold interests, usufruct rights, easements, and other transferable rights, offering flexibility based on strategic and operational needs.

Designated zones and regulatory controls

A key pillar of the law is the designated-zone model. The Council of Ministers, in coordination with the Real Estate General Authority (REGA), will issue a “Geographic Scope Document” in Q1 2026 that outlines specific areas where foreign ownership is authorized. These are expected to include major urban and economic centers, such as Riyadh, Jeddah and other high-growth regions.

Sensitive and culturally significant cities – particularly Makkah and Madinah – remain subject to tighter controls. Ownership in these cities is restricted primarily to Muslim individuals and specific foreign-owned Saudi entities under strict conditions, reflecting the Kingdom’s cultural and religious priorities.

Procedures and digital platforms

To streamline implementation and enhance transparency, Saudi Arabia has launched the “Saudi Properties” digital platform. This centralized gateway allows:

• Residents with a Saudi residency permit to apply directly for property ownership registration online.
• Non-residents to initiate applications via Saudi embassies and consulates abroad to obtain digital identification before using the platform.
• Foreign companies to register with the Ministry of Investment before completing transactional requirements.

All real estate rights acquired by non-Saudis must be formally registered in the national Real Estate Registry to ensure legal validity and enforceability.

Fees, compliance, and penalties

The law introduces a transfer fee on real estate dispositions by non-Saudis – capped at 5 percent of the property’s value – in addition to standard transaction taxes.

Strict penalties are also in place to safeguard market integrity. Violations, such as failure to register or acquisition through false representation, can result in fines of up to SAR 10 million and may even lead to forced sales at public auction. A dedicated enforcement committee within REGA oversees compliance, with dispute resolution avenues available through administrative courts.

Strategic impact and investor opportunities

The enactment of this law has significant implications for both the Saudi economy and global real estate investors:

1. Attraction of foreign capital: By opening up ownership rights to a broader pool of investors, Saudi Arabia aims to deepen liquidity in its property markets and attract long-term foreign capital flows.
2. Expansion of the real estate sector: Opportunities now encompass residential, commercial, industrial, tourism, and mixed-use developments, supporting urban transformation and large-scale projects such as NEOM, Qiddiya, and the Red Sea initiative.
3. Alignment with Vision 2030: This regulatory shift aligns closely with Vision 2030’s strategic objectives – diversifying the economy away from oil dependence, enhancing non-oil GDP contributions, and building a globally competitive investment climate.
4. Enhanced urban development and job creation: Increased foreign participation is expected to elevate project quality, stimulate job creation across real estate-related sectors, and improve standards of urban infrastructure and housing supply.

Conclusion

Saudi Arabia’s new Law of Real Estate Ownership by Non-Saudis ushers in a paradigm shift – transforming a historically closed market into a structured, accessible hub for global investment. While the framework carefully balances openness with cultural and regulatory safeguards, it fundamentally strengthens the Kingdom’s position as a strategic real estate destination within the Middle East.

For international investors, corporations, and high-net-worth individuals, this change represents both an invitation and a new frontier of opportunity in one of the world’s fastest-evolving economies.

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