The Ministry of Investment in Saudi Arabia has announced that foreign investors are now permitted to own and sell real estate in the Kingdom, provided that specific conditions are met and this move aligns with Saudi Arabia’s ongoing efforts to attract foreign capital and stimulate economic growth under Vision 2030.

However, this permission comes with important restrictions so most notably, foreign investors are not allowed to own real estate within the boundaries of the holy cities of Makkah and Madinah and the Ministry emphasized that this measure is in place to preserve the sanctity and cultural significance of these religiously important cities.

Aimed at Investment, Not Speculation

According to the Ministry, the purpose behind allowing foreign real estate ownership is to support legitimate investment activities and not for speculative trading. Commercial speculation, often associated with buying and selling assets to profit from market fluctuations, is not permitted under this regulation.

The new guidelines aim to attract long-term investors committed to developing and using properties for genuine business purposes, including housing for employees, operational facilities, and other commercial needs—not merely for quick financial gain.

Approved Real Estate Purposes for Foreign Investors

Foreign companies seeking to own property in Saudi Arabia must receive prior approval from the Ministry of Investment and permitted uses of property ownership by foreign investors include:

• Personal residences for foreign executives or employees
• Headquarters for industrial facilities
• Administrative offices for company operations
• Residential accommodation for staff and workers
• Warehousing and storage facilities

Each of these purposes must be clearly stated during the application process, and approvals will be granted based on the company’s demonstrated need for the real estate.

Streamlined Application Process with No Financial Fees

To facilitate the process, the Ministry of Investment has ensured that there is no financial fee for this service. Applications are processed efficiently through the Ministry’s e-services portal and are typically completed within five business days.

The goal is to create a user-friendly and transparent system for foreign investors to navigate, thereby making it easier for international firms to expand their presence in the Kingdom.

Required Documentation for Real Estate Ownership

Applicants must provide specific documentation to obtain approval, including:

• A copy of the municipality’s building permit, or
• A letter of approval from the relevant municipal authority, or
• A land use statement issued by an official government authority, indicating the designated use of the land
• A copy of the deed for the property intended to be acquired

These documents are necessary to verify the legitimacy of the acquisition and ensure that the property will be used in accordance with regulatory requirements.

Requirements for Real Estate Development Establishments

For companies engaged in real estate development, additional requirements apply. Establishments wishing to implement or sell real estate projects must submit:

• A detailed report from an engineering office accredited by the Saudi Council of Engineers, outlining the total estimated cost of the project
• A copy of the deed for the land or property intended for development or sale

Crucially, the project cost must be no less than SAR 30 million, including both land value and construction. This financial threshold ensures that only serious and well-capitalized developers are involved in real estate development activities.

Furthermore, developers must commit to utilizing the acquired land within five years, promoting timely development and discouraging land hoarding or prolonged inactivity.

A Strategic Step Toward Economic Diversification

This new real estate ownership policy is seen as a strategic step in diversifying Saudi Arabia’s economy and making it a more attractive destination for international investors. By allowing foreign firms to own and develop property for business purposes, the Kingdom is signaling its openness to foreign participation in its economic transformation.

Moreover, this regulation is expected to encourage the growth of supporting sectors such as construction, engineering, and facility management, further boosting employment and economic activity across Saudi Arabia.

The Saudi Ministry of Investment’s announcement marks a significant milestone in the country’s investment landscape. With a clear framework and efficient procedures, foreign investors now have an opportunity to contribute to Saudi Arabia’s real estate sector in a meaningful way—outside the sacred cities of Makkah and Madinah. As long as their activities align with regulatory goals and long-term development strategies, international companies are welcome to take part in the Kingdom’s future growth.