Saudi Arabia Opens Real Estate to Foreign Ownership: A Structuring Guide for Investors

Key Takeaways: Saudi Arabia's updated Non-Saudi Real Estate Ownership Law entered into force in 2026, with the Real Estate General Authority (REGA) now accepting applications through the national real estate portal following Cabinet approval of the Executive Regulations and designated geographic zones. The regime opens residential, commercial, industrial and tourism assets to foreign investors, subject to beneficial-ownership disclosure, a transaction fee of up to 5%, and special rules for Makkah and Madinah. Structuring decisions made before signing will determine both eligibility and returns.

Who May Own: The Three Eligibility Tracks

The Law distinguishes between resident individuals (one residential property outside designated zones), non-resident individuals (who must first obtain a verified digital ID from the Ministry of Interior, open a Saudi bank account and register a Saudi mobile number), and companies with non-Saudi shareholders, which may acquire real property and rights in rem within the designated zones, including Makkah and Madinah under dedicated rules. A frequently overlooked point: corporate ownership outside the designated zones is limited to actual operational need and requires prior Ministry of Investment approval, together with disclosure of all direct and indirect owners and controllers at registration. Multi-layer holding structures should be reviewed before, not after, filing.

The Transaction Fee and Your Return Model

The Law imposes a fee, collected by REGA, on a non-Saudi's disposal of rights in rem, capped at 5% of transaction value, with the Executive Regulations specifying zero-rated cases. For funds and developers pursuing short-hold exit strategies, the cumulative fee impact should be built into underwriting from day one, as it can materially move IRR.

Five Diligence Items Before Signing

First, confirm the asset sits within the Cabinet-approved geographic zone maps; subsequent zone amendments do not impair acquired rights, and the more favorable treatment applies. Second, examine the standalone restrictions applicable to Makkah and Madinah. Third, verify the entity's Ministry of Investment registration and legal-representative requirements are complete. Fourth, ensure absolute accuracy of every submission: the Regulations impose severe sanctions, up to annulment of the transaction, for misleading information used to obtain ownership rights. Fifth, structure financing consistent with local bank account requirements and AML rules.

How We Can Help

Mahmoud Adel Althomali Law Firm, with offices in Riyadh, Jeddah and Taif and an international reach through TerraLex membership, advises international investors on the full acquisition cycle: legal due diligence, ownership structuring, purchase and development agreements, and representation before REGA and the Ministry of Investment.

For a confidential consultation, use the contact form below or reach us directly: +966 53 009 9485 | info@althomalilawyer.com | althomalilawyer.com