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August 6, 2025
Overview: A Historic Real Estate Reform
When & How the Law Takes Effect
Where Foreigners Can Buy: Zones & City Restrictions
Who Can Own: Individuals vs Companies
Types of Property Rights Enabled
Restrictions & Special Cases (Mecca & Medina)
Fees, Registration & Penalties
Key Benefits for International Investors
Practical Implications & Strategic Business Use Cases
How SetupinSA Supports Foreign Real Estate Investors
Risks, Safeguards & Market Outlook
Conclusion: Why the Reform Matters
Frequently Asked Questions (FAQs)
Saudi Arabia’s Council of Ministers approved a groundbreaking Law of Real Estate Ownership and Investment by Non‑Saudis in July 2025. It replaces the outdated 2000 framework and signals a major policy shift: for the first time, foreign individuals and entities can legally own or acquire property rights in designated zones across the Kingdom—opening the real estate sector to international capital.
Publication: Official gazette announcement on July 25, 2025
Transition Period: 180 days to issue executive regulations via the Istitlaa public platform
Effective Date: Ownership permitted from January 2026 onward.
Regulatory Bodies: Real Estate General Authority, Ministry of Investment, and Ministry of Interior will define zones, procedures, and oversight measures
Foreign ownership is permitted only within designated geographic zones, which are expected to include key urban areas such as Riyadh and Jeddah.
Foreigners are generally prohibited from buying property in Mecca and Medina, except in limited scenarios involving Muslim individuals or corporate entities under strict conditions.
Foreign Individuals (resident or non‑resident), including expats, may own up to one residential property for personal use outside restricted zones.
Foreign Companies, including listed entities, investment funds, or special-purpose vehicles, may own real estate anywhere, including in holy cities—provided the property serves operational, employee housing, or development needs.
Non-Saudis may acquire full ownership, including:
Usufruct Rights (right to use & benefit)
Leaseholds & Easements
Other “Real Rights” recognized in Saudi Real Estate Registry
These rights come with structured limits such as ownership percentages and duration caps, to be defined in forthcoming regulations.
Property ownership in Makkah and Madinah remains extremely restricted.
Only Muslim foreign individuals under tight criteria or foreign companies for employee housing/development may own property there.
Ownership restrictions include caps (e.g. 49% for listed company shareholding) and must comply with the Islamic and cultural sensitivity of these holy cities.
| Requirement | Details |
|---|---|
| Registration | Mandatory entry in Real Estate Registry |
| Transfer Fee | Up to 5% on resale of foreign-owned property |
| Penalties | Fines up to SAR 10M; forced sale in severe cases |
| Governance | Dedicated enforcement committee; appeals permitted |
Attempted violations (e.g. false information, unofficial purchases) may result in sale by authorities and loss of rights.
For decades, foreign ownership of property in Saudi Arabia was off-limits, with exceptions only through partnerships or leasing. In 2025, Saudi Arabia officially opened its real estate market to foreign individuals and companies—a landmark shift signaling the Kingdom’s intent to become a global investment hub.
This is not just a policy tweak—it’s a strategic pivot to attract FDI, diversify the economy, and build futuristic cities. For global investors, this presents an untapped opportunity to enter a real estate market that’s still in early-stage liberalization.
The 2025 legislation offers a clear legal framework that allows:
Full property ownership rights for eligible foreigners
Residential and commercial property acquisition
Ownership within strategic zones approved by the Ministry of Investment (MISA)
Streamlined processes for property registration via the Saudi Real Estate Registry
Financing options via Shariah-compliant banking structures
Notably, ownership rights in Mecca and Medina remain reserved for Saudi nationals.
Saudi Arabia has defined eligibility to ensure strategic investment inflows:
Foreign individuals holding Premium Residency (Green Card Equivalent)
Foreign companies with MISA operational licenses
Investors from GCC nations with relaxed conditions
Non-residents approved for specific development projects (on a case-by-case basis)
The law is designed to welcome long-term investors and businesses aligned with Vision 2030 objectives.
Foreign ownership is limited to strategic zones that align with Saudi’s urban and economic growth plans.
| City | Investment Zones Open for Foreigners |
|---|---|
| Riyadh | King Abdullah Financial District (KAFD), Diplomatic Quarter, North Riyadh |
| Jeddah | Jeddah Downtown, Corniche Waterfront, Obhur District |
| Dammam/Khobar | Seafront Developments, Industrial Zones |
| NEOM | All residential, commercial, and mixed-use zones |
| Red Sea Project | Tourism resorts, residential villas, and branded residences |
Buying property in Saudi Arabia is structured, transparent, and digitized. Here’s the process flow:
Verify Eligibility with MISA (Premium Residency, business license)
Select Property through licensed brokers or developers
Conduct Due Diligence (Legal checks, property inspection)
Apply for Islamic-Compliant Financing (if applicable)
Draft and Sign Sale & Purchase Agreement (SPA)
Register ownership via Saudi Real Estate E-Registry
Receive your official Title Deed (Sak) under foreign ownership status
The entire process takes 30–90 days, depending on paperwork and approvals.
Foreign property owners must adhere to:
Geographical restrictions: No ownership in Mecca & Medina
Usage restrictions: Properties must align with business activity licenses for corporate owners
Strategic Zone Regulations: No purchase near military, border, or sensitive infrastructure zones
Investment Minimums: Typically SAR 1 million+ property value for individuals
Non-compliance can result in license revocation and property acquisition freezes.
This law offers compelling benefits:
High Rental Yields (6–9%) in prime urban districts
Capital Appreciation Potential amid infrastructure booms
Zero property taxes for individual owners (2025 policy)
Legal security through digitized property registries
Strategic alignment with Saudi’s Vision 2030 Economic Transformation Plan
For investors, it’s an opportunity to enter an emerging market before saturation.
Foreign buyers can access Shariah-compliant financing products, such as:
Murabaha (Cost-plus financing): Bank purchases property and sells at a profit margin
Ijara (Lease-to-own model): Gradual equity build-up while leasing
Developer Payment Plans with installments over 5–10 years
Banks like Al Rajhi, SNB, and Riyad Bank offer competitive packages for Premium Residency holders.
Access to Saudi Real Estate Market: New investment and development opportunities in high-demand zones
Strategic Fit with Premium Residency: Foreign residents can own without local sponsorship or citizenship requirement
Boost for Real Estate Development: More supply, improved governance, and institutional investor entry expected to stabilize pricing
Alignment with Vision 2030: Economic diversification, urbanization growth, and tourism-related expansion are central to Saudi’s development plans
Foreign companies can now acquire land or office-commercial property for staff housing or R&D centers—opening a new category of corporate real estate.
Large-scale developers, either local or foreign, can participate in mixed-use, hospitality, or residential projects in Riyadh, Jeddah, or future smart zones like NEOM.
Premium Residency holders can purchase homes for personal or rental use—leveraging growing demand and increasing rental yields in urban areas.
SetupinSA offers comprehensive guidance and services for navigating this new framework:
Zone Allocation & Investment Mapping: Identifying eligible areas per upcoming regulations
Property Acquisition Advisory: From licensing to registration, structuring ownership vehicles
Premium Residency Integration: Aligning property investments with residency pathways
Regulatory Compliance & Governance Planning: Managing transfer fees, Saudization mandates and legal protections
Real Estate Market Intelligence: Feasibility reports on ROI, rental yield, and market risks
Regulatory Uncertainty as zones and rules are finalized within 180-day period
Makkah/Madinah Limits may stifle speculative use or hotel-linked investments in holy cities
Market Fluctuations, such as rising rents (7.6% in June 2025) may affect short-term affordability and foreign demand
Enforcement Risks: Violations invite heavy penalties and government-mandated sales
Macro Sensitivity to real estate project delays under Vision 2030 mega-programs
Strategic phased entry, legal structuring, and clear compliance protocols are vital for safeguarding investments.
Saudi Arabia’s new property ownership law represents a historic market opening—a strategic pivot in Vision 2030’s economic reform agenda. It enables global investors and high-net-worth individuals to participate directly in Saudi real estate, while aligning with the Kingdom’s broader urban development and diversification goals.
When combined with macro-projects like NEOM, Diriyah, and Red Sea developments, this law creates a structured path towards transparent, high-impact investments—supported by governance safeguards and long-term market infrastructure.
When does the new property law become effective?
January 2026, after a 180-day regulatory rollout period.
Can any foreigner buy property in Saudi?
Yes, individuals and companies can own properties in designated zones subject to registry and approval.
Are Makkah and Madinah off limits?
Generally yes—only limited exceptions apply, with strict conditions.
What fees or penalties exist?
Transfer fee up to 5%, fines up to SAR 10M, and ownership validity depends on registry.
Does residency matter for individuals?
Foreign residents may buy one residential property; Premium Residency makes the process smoother.
Foreign companies can now acquire or lease office properties for corporate offices, regional headquarters, or staff housing without requiring a Saudi co-sponsor. This simplifies entry for tech companies, consulting firms, regional logistics operations, and R&D centers.
Opening to international real estate investors allows co‑development of mixed-use projects, midsize hotel complexes, and serviced apartments—particularly near business districts like Riyadh’s King Abdullah Financial District, Jeddah’s waterfront, or future smart zones such as NEOM and Qiddiya.
Individuals holding Premium Residency or corporate investors can purchase single-use or multiple residential units in designated areas. Early market analysis suggests high rental income potential in urban zones and newly developed smart‑city communities.
Larger investors can acquire contiguous land parcels to develop master-planned communities, public amenities, or greenfield real estate projects—supporting Saudi’s urban expansion and increasing FDI-driven infrastructure coverage.
SetupinSA provides a comprehensive advisory experience specifically tailored for the new foreign ownership landscape:
We analyze future executive regulations and map eligible investment zones. You’ll receive detailed guidance on Riyadh, Jeddah, or developing smart zones where you’re permitted to own property.
SetupinSA designs the optimal corporate structure—whether through investment vehicles, local branches, or Premium Residency integration—with full handling of property acquisition, registry, and title deed processing.
Our legal team conducts full property due diligence, aligns with Saudization guidelines, and ensures compliance with real estate ownership limits, transfer penalties, and registry protocols.
We provide custom feasibility reports, rental-yield forecasts, and comparative analysis against similar GCC markets, helping you assess value, pricing trends, and demand dynamics.
If eligible for Premium Residency, SetupinSA helps integrate your residency status with the property purchase process—streamlining residency-permit handling and post-acquisition compliance.
Law details—such as maximum ownership percentage per investor, permitted uses per zone, and formal transfer clearance procedures—will be defined over a 180-day regulatory window. SetupinSA monitors these closely and provides real-time updates for investors.
Property prices and rent indices in hubs like Riyadh have seen up to a 7.6% rise due to inflation and tourism growth. While upstream demand is growing, careful timing and phased investment entry is essential.
Ownership in holy cities remains heavily restricted. Even investments in hospitality or staff housing require separate approvals and adherence to religious norms—SetupinSA ensures strict regulatory compliance when operating near these areas.
Ownership via unofficial channels or lack of registry can lead to severe sanctions: fines up to SAR 10 million and forced sale. We provide oversight to ensure governance thresholds and registry protocol are met.
Saudi Arabia is targeting $100 billion FDI in real estate by 2030, positioning real estate as a stimulus for GDP diversification and urban growth. Ownership reforms align with mega-projects like NEOM, Red Sea, and Qiddiya development zones.
From securing an audited company profile, handling all document attestations, and obtaining approvals from MISAto issuing your Commercial Registration, we handle the entire business setup — quickly, efficiently, and without hassle.
1. We Understand the Process, So You Don’t Have To
Navigating the regulations in Saudi Arabia can be complex. That’s why our experts handle all the paperwork, approvals, and formalities on your behalf.
2. Tailored Solutions for Every Business
Whether you’re a startup or an international corporation, our services are customized to fit your unique needs.
3. Your Success Is Our Priority
From the moment you contact us, your goals become our mission. We pride ourselves on fast results and exceptional service.
