Foreign ownership of property in Saudi Arabia is now legally permissible following a legislative shift.
The Kingdom of Saudi Arabia is set to strengthen its investment landscape and support the diversification of its non-oil sector with the implementation of the Law of Real Estate Ownership by Non-Saudis, issued by Royal Decree No. M/14 in July 2025. This law is scheduled to come into effect in January 2026.
This significant shift in ownership policy marks a bold commitment to inclusivity and diversification, particularly in areas that were previously restricted. The law allows foreign persons to own property in Saudi Arabia for commercial, residential, or operational purposes within designated geographic zones.
The new law brings Saudi Arabia's property ownership framework closer to that of other countries in the Gulf Cooperation Council (GCC) region. It is a key pillar of Saudi Arabia's national transformation programme, Vision 2030, aimed at diversifying the economy beyond oil.
Philip Corfield-Smith, a property expert with Pinsent Masons in the Middle East, stated that the framework law is an excellent initial step toward encouraging foreign ownership and participation in Saudi Arabia's real estate market. Saleh bin Abadi, another real estate expert at Pinsent Masons, added that the new law reflects a bold commitment to inclusivity and diversification.
The law aligns with the broader objectives of Vision 2030, particularly in terms of expanding access for foreign entities in the real estate market. It is part of Saudi Arabia's efforts to diversify its economy and attract foreign investment. The real estate sector is a major emphasis in Vision 2030, with the goal of attracting foreign investment to support the country's 'giga projects' and redevelopment initiatives in cities such as Jeddah and Riyadh.
The new law opens up opportunities in real estate ownership for foreign entities in designated zones across the Kingdom. It recommends non-Saudis to purchase real estate primarily in economic cities and free zones across the Kingdom starting January 2026. The law is set to transform Saudi Arabia's real estate market from early 2026, unlocking new opportunities for foreign residents and international investors.
In limited cases, foreign residents may also be allowed to own one residential property outside of these designated geographic zones. The law also allows non-Saudi Muslims to own property within the holy cities of Makkah and Madina, subject to specific conditions.
The law is designed to prevent speculative investment in areas outside the designated geographic zones, ensuring that national housing objectives remain a priority alongside international investment. The country is looking to diversify beyond oil and increase development and investment into the Kingdom.
The Law of Real Estate Ownership by Non-Saudis replaces the previous 2000 law and is expected to play a crucial role in attracting foreign investment and supporting the development of the Kingdom's real estate sector. The law is a significant step forward in Saudi Arabia's ongoing efforts to modernise its economy and create a more inviting environment for foreign investors.
